On August 6, 2021, the US Securities and Exchange Commission (SEC) approved Nasdaq’s board diversity rule. Nasdaq originally proposed its rule in December 2020 and subsequently amended the proposal to reflect feedback submitted by commenters.

The rule requires Nasdaq-listed companies to have, or explain why they do not have, at least two diverse directors, including (1) at least one director who self-identifies as female (regardless of gender designation at birth) and (2) at least one director who self-identifies as either an “Underrepresented Minority,” as defined in the Nasdaq rule, or as LGBTQ+. Nasdaq-listed companies are also required to annually disclose directors’ self-identified gender, race and ethnicity (i.e., African American or Black, Alaskan Native or Native American, Asian, Hispanic or Latinx, Native Hawaiian or Pacific Islander, White, or Two or More Races or Ethnicities) and LGBTQ+ status in a standardized board diversity matrix. Alternative requirements apply to, inter alia, foreign issuers and smaller companies.

Continue reading on MayerBrown.com for more detail on the board diversity rule and practical considerations, including the implications of increasing attention to board diversity for companies that are not listed on Nasdaq.