Pressure from Nasdaq Inc. for greater diversity on boards of directors cleared a major hurdle, as regulators approved the exchange operator’s proposal to include gender and race in its rules. ‘registration.
In an order issued Friday afternoon, the Securities and Exchange Commission accepted the rule changes proposed by the Nasdaq. But a sign of political divisions on the proposal, the two Republican commissioners of the SEC have expressed their opposition, one voting against the decision and the other providing only partial support.
According to the proposal, companies listed on the Nasdaq should meet certain minimum gender and ethnic diversity targets on their boards or explain in writing why they do not.
For most American businesses, the goal would be to have at least one female director, as well as one director who identifies as a racial minority or as lesbian, gay, bisexual, transgender, or queer. Companies would also be required to disclose diversity statistics regarding their boards of directors. The Nasdaq found in a review before submitting its plan late last year that more than three-quarters of its listed companies failed to meet the proposed requirements.
“These rules will allow investors to better understand the approach of Nasdaq-listed companies to board diversity, while ensuring that these companies have the flexibility to make decisions that best serve their shareholders,” said SEC Chairman Gary Gensler in a statement.