The exchange announced this morning that it had filed a proposal with the U.S. Securities and Exchange Commission that would allow it to require all businesses it lists have to have a minimum of one person who self-identifies as female and one person who self-identifies as an underrepresented minority or LGBTQ as board directors.
Companies would be required to “publicly disclose board-level diversity statistics” to prove that they’re thinking about diversity when they pick directors, Nasdaq says. And if they don’t have the two, the businesses need to explain why.
How quickly the companies would need to comply with the rule, if passed, depends on its listing tier, according to Nasdaq’s 271-page proposal. The timelines range from one to five years once the SEC approves the requirement. Those that fail to do so won’t automatically be delisted if they outline why that’s the case.