Governance Briefing — August 6, 2021
The U.S. SEC approved Nasdaq’s board diversity rule on August 6, 2021, locking in new disclosure tables and minimum diverse-director expectations for most U.S.-listed companies.
Executive briefing: On 6 August 2021 the U.S. Securities and Exchange Commission (SEC) approved Nasdaq’s proposed listing rule that compels most listed companies to publish board diversity matrices and either seat at least two diverse directors or explain their approach. The decision hardwires transparent diversity reporting into U.S. capital markets and gives investors a consistent baseline for evaluating board composition.
Key requirements
- Standardised disclosure. Issuers must annually publish a board diversity matrix covering gender identity and self-identified LGBTQ+ status, beginning the later of August 8 2022 or the company’s next proxy cycle.
- Comply or explain. Most Nasdaq Global Select and Global Market issuers must have at least two diverse directors, including one woman and one individual who is LGBTQ+ or an underrepresented minority, or publicly explain why they do not meet the objectives.
- Smaller issuer flexibility. Nasdaq Capital Market companies and foreign issuers face staggered compliance dates and can satisfy the objectives with two women directors.
Governance implications
- Investor stewardship. Asset managers gain consistent data to benchmark portfolio companies and escalate engagement when board refreshment stalls.
- Disclosure controls. Corporate secretariats must integrate demographic attestation, consent, and privacy safeguards into proxy preparation workflows.
- Nonprofit affiliates. Nasdaq-listed foundations and university endowments operating through listed vehicles should align trustee succession planning with the matrix to avoid compliance gaps.
Action checklist
- Run gap analyses against the phase-in timetable—one diverse director by 2023 for Global Select and Global Market issuers, two by 2025.
- Update board skills matrices and recruitment mandates to surface candidates across gender, racial, and LGBTQ+ dimensions.
- Prepare investor-relations FAQs explaining any deviation from the objectives and outlining succession roadmaps.
Sources
Zeph Tech’s governance desk integrates Nasdaq’s matrix with global diversity benchmarks to brief audit, nomination, and ESG committees.