Nasdaq Inc.’s push for greater diversity in corporate boards faces a key hurdle as regulators are poised to rule on the exchange operator’s proposal to include gender and race in its listing rules.
Staffers at the Securities and Exchange Commission are expected to release a decision Friday on whether to approve or reject Nasdaq’s proposed changes. Under the proposal, Nasdaq-listed companies would need to meet certain minimum targets for the gender and ethnic diversity of their boards or explain in writing why they aren’t doing so.
For most U.S. companies, the target would be to have at least one woman director, as well as a director who self-identifies as a racial minority or as lesbian, gay, bisexual, transgender or queer. Companies would also be required to disclose diversity statistics about their boards. Nasdaq found in a review conducted before submitting its plan late last year that more than three-quarters of its listed companies wouldn’t have met its proposed requirements.
Republicans on the Senate Banking Committee and some conservative groups have criticized the plan, saying Nasdaq is overreaching and pursuing a political agenda. Democrats on Capitol Hill and corporations such as Goldman Sachs Group Inc. and Microsoft Corp. have voiced support for the proposal.
The SEC must sign off on changes to stock exchanges’ listing rules. Nasdaq filed its proposal with the agency in December 2020, setting off a 240-day period for commission staffers to make a decision. That period expires Sunday. In such situations, the SEC typically releases its decision ahead of the weekend.
