International Capital Markets Newsletter – Winter 2021: New Nasdaq Board Diversity Listing Rules | Dechert LLP

 International Capital Markets Newsletter – Winter 2021: New Nasdaq Board Diversity Listing Rules | Dechert LLP

On 6 August 2021, the U.S. Securities and Exchange Commission (the “SEC”) approved The Nasdaq Stock Market LLC’s (“Nasdaq”) proposal to adopt listing rules 5605(f) and 5606 related to enhancing board diversity (the “Board Diversity Rules”). The Board Diversity Rules are aimed at improving corporate governance at Nasdaq-listed companies through a “comply or explain” disclosure-based framework and enhanced transparency of board diversity statistics.

Rule 5605(f) – Diverse Directors

Rule 5605(f) requires Nasdaq-listed companies to have (or explain why they do not have) at least two self-identified “diverse” directors, including: (i) at least one who self-identifies as female; and (ii) at least one who self-identifies as an underrepresented minority.

An underrepresented minority includes one or more of the following: Black or African American, Hispanic or Latinx, Asian, Native American or Alaska Native,…

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