ARTICLE
29 August 2022

Discussing The NASDAQ Board Diversity Rule Challenge

M
Mintz

Contributor

Mintz is a general practice, full-service Am Law 100 law firm with more than 600 attorneys. We are headquartered in Boston and have additional US offices in Los Angeles, Miami, New York City, San Diego, San Francisco, and Washington, DC, as well as an office in Toronto, Canada.
Board diversity continues to be a concerted area of focus for companies, investors, regulators and other stakeholders. Progress continues and the importance of board diversity is underscored...
United States Corporate/Commercial Law

Board diversity continues to be a concerted area of focus for companies, investors, regulators and other stakeholders.  Progress continues and the importance of board diversity is underscored by compelling findings on the positive impacts on corporate performance, business value, ability to attract and retain talent, and stakeholder engagement.

There are various rule-based approaches to increasing diversity on corporate boards.  The NASDAQ rule takes a disclosure – rather than a mandate – approach in essentially requiring listed companies to disclose board diversity statistics and have, or disclose why they do not have, a minimum of two diverse board members.  Transparency and disclosure continue to be common threads in ESG and board diversity.

Somewhat typical of nascent rules and regulations, the NASDAQ board diversity rule has been judicially challenged.  I spoke with Andrew Ramonas of Bloomberg in anticipation of oral arguments in Alliance for Fair Board Recruitment v. SEC, scheduled for Monday before the Fifth Circuit.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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