Nasdaq has filed a proposal with the US Securities and Exchange Commission (SEC) to adopt new listing rules that would require most companies listed to have, or explain why they do not have, at least two ‘diverse’ directors, including one who self-identifies as female and one who self-identifies as either an ‘underrepresented’ minority or LGBTQ+. Foreign companies and smaller reporting companies would have additional flexibility in satisfying this requirement with two female directors.

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.

Under the proposal, all Nasdaq-listed companies will also be required to publicly disclose board-level diversity statistics.

“Nasdaq’s purpose is to champion inclusive growth and prosperity to power stronger economies,” said Adena Friedman, president and CEO, Nasdaq. “Our goal with this proposal is to provide a transparent framework for Nasdaq-listed companies to present their board composition and diversity philosophy effectively to all stakeholders; we believe this listing rule is one step in a broader journey to achieve inclusive representation across corporate America.”

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