Capping an extraordinary year defined, in part, by social strife and social justice protests, Nasdaq—moved by diversity requirements that proxy solicitation firms, banks and large asset managers have set in place—now seeks to promote its own brand of diversity mandate. Earlier this month, the exchange requested the Securities and Exchange Commission to consider a proposal requiring Nasdaq-listed companies to be more inclusive in terms of the makeup of their boards of directors.
As has been reported in Corporate Counsel, Nasdaq is asking the SEC to compel these companies to seat at least one self-identifying female and one self-identifying Black or African American, Hispanic or Latinx, Asian Native American or LGBTQX director on their corporate boards. Likewise, if adopted by the SEC, Nasdaq’s proposed rule would require issuers to report data on board diversity. The idea behind this push is that by bringing in business and financial experts with different backgrounds, listed companies will benefit from a greater diversity of ideas, avoid “group-think” and, ultimately, ensure better oversight.
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