Nasdaq seeks a rule requiring diversity on boards of directors of listed companies

The goal is to provide transparency and enhance investor confidence.

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Nasdaq's DE-I efforts

The rules would also require most Nasdaq-listed companies to either have—or explain why they don’t have—at least two diverse directors, including one who self-identifies as female and one who self-identifies either as LGBTQ+ or an underrepresented minority, defined as Black or African American, Hispanic or Latinx, Asian, Native American or Alaska Native, Native Hawaiian or Pacific Islander or two or more races or ethnicities.

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The goal of is to provide stakeholders with a better understanding of the company’s current board composition and enhance investor confidence that all listed companies are considering diversity in the context of selecting directors, either by including at least two diverse directors on their boards or by explaining their rationale for not meeting that objective. As part of rationale for the new requirements, Nasdaq’s proposal presents an analysis of over two dozen studies that found an association between diverse boards and better financial performance and corporate governance.

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