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SEC Approves Nasdaq’s Revised Board Diversity Disclosure Deadlines

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On December 14, 2022, the Securities and Exchange Commission (SEC) approved a proposed rule change with regard to upcoming disclosure deadlines in Nasdaq Listing Rules 5605 and 5606. The rule change aligns the disclosure deadlines in the rules with calendar yearend, finding the prior deadlines to be confusing and unnecessarily complicated.

The new December 31 deadline applies to the disclosure of various elements of the diversity objectives of Rule 5605(f) and the Board Diversity Matrix in Rule 5606. The annual disclosure of board diversity statistics in tabular format (the matrix) must be made by December 31 of each year beginning in 2023. By December 31, 2023, companies listed on the Nasdaq Global Select Market or Nasdaq Global Market must have, or explain why they do not have, one diverse director (female, LGBTQ+, or an underrepresented minority, as defined in Nasdaq Rule 5605(f)(1)).

By December 31, 2025, a company listed on Nasdaq (other than foreign issuers, smaller reporting companies, companies with boards of five or fewer directors, and companies meeting specified other exceptions) must have, or explain why it does not have, at least two directors who are diverse, including (i) at least one diverse director who self-identifies as female; and (ii) at least one diverse director who self-identifies as an underrepresented minority or LGBTQ+.

For a smaller reporting company, the requirement to have, or explain why it does not have, at least two directors who are diverse will be met if the board includes at least one diverse director who self-identifies as female and a second diverse director who self-identifies as one or more of the following: female, LGBTQ+, or an underrepresented minority.