PJ Neal

Thoughts from a more-than-occasional writer

What Your Board Needs to Know About Nasdaq’s Rule Change on Diversity Disclosure [Russell Reynolds Associates]

On Friday, Nasdaq won Securities and Exchange Commission approval to implement rule changes for listed companies, requiring increased disclosure around board diversity. The likely result of this will be a growing competition for directors who are women, racial and ethnic minorities, or identify as LGBTQ+.

While it is possible that the rule implementation will be delayed pending legal challenges, there is clearly a growing emphasis around increasing diversity and disclosure in the boardroom – and a long way for boards to go to meet minimum standards: according to a Nasdaq analysis conduced in 2020, over 75 percent of boards would not have met the proposed new standards had they been implemented at that time. According to ISS data on 2,284 boards, over a third of Nasdaq listed companies lack a racially diverse director, and more than 10 percent lack female directors.

Read the full paper, co-authored with Rusty O’Kelley and Rich Fields.