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Nasdaq Updates Board Diversity Deadlines
December 23, 2022 Download PDF
Nasdaq has amended the deadlines for its board diversity requirements, changing to a uniform December 31st cut-off in the applicable year of compliance (instead of an August or later proxy filing date deadline). Because the rules require these disclosures by the time of a company’s annual meeting proxy statement filing (or Form 10-K or 20-F filing, as applicable), even if disclosed via website, these revised dates will not practically affect the compliance schedule for most Nasdaq companies. The amendments are effective immediately, and the revised compliance dates are as follows:
- each Nasdaq listed company must have at least one director who self-identifies as diverse, meaning female or an “Underrepresented Minority” (Black or African American, Hispanic or Latinx, Asian, Native American or Alaska Native, Native Hawaiian or Pacific Islander, two or more races or ethnicities, or LGBTQ+) or alternatively explain why the company does not meet these board diversity objectives by December 31, 2023 (instead of the later of August 7, 2023, or the date of the company’s proxy/information statement for its 2023 annual meeting); and
- each Nasdaq Global Select and Global Markets listed company must have at least two directors who self-identify as diverse, including at least one director who self-identifies as female and at least one director who self-identifies as an Underrepresented Minority, or alternatively explain why the company does not meet these board diversity objectives by December 31, 2025 (instead of the later of August 7, 2025, or the date of the company’s proxy/information statement for its 2025 annual meeting). Nasdaq Capital Markets listed companies have an additional year to meet these board diversity objectives (by December 31, 2026).
Nasdaq also clarified that the outside deadline for listed companies must provide statistical disclosures regarding the self-identified diversity characteristics of its board members in Nasdaq’s prescribed board diversity matrix format is December 31st of each year on a go-forward basis, though these disclosures too must be made by the time of a company’s annual meeting proxy statement filing (or Form 10-K or 20-F filing, as applicable).
As noted above, under existing rules, companies may make the required disclosures (i) in any proxy statement or any information statement (or, if the company does not file a proxy, in its Form 10-K or 20-F); or (ii) on the company’s website. However, companies disclosing via their website must submit the URL link to the disclosure concurrently with the proxy statement (or Form 10-K or 20-F filing, as applicable) to Nasdaq through the Nasdaq Listing Center via e-mail to email@example.com. Nasdaq has provided companies with robust guidance on compliance with these rules, including FAQs, an information sheet and examples of acceptable board diversity matrices.
The SEC’s approval of Nasdaq’s board diversity requirements is being challenged before the U.S. Court of Appeals for the Fifth Circuit.
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