Nasdaq Inc.’s push for greater diversity in corporate boards cleared a key hurdle, as regulators approved the exchange operator’s proposal to include gender and race in its listing rules.
In an order released Friday afternoon, staffers at the Securities and Exchange Commission agreed to Nasdaq’s proposed rule 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.
“These rules will allow investors to gain a better understanding of Nasdaq-listed companies’ approach to board diversity, while ensuring that those companies have the flexibility to make decisions that best serve their shareholders,” SEC Chairman Gary Gensler said in a statement.
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.
