Pressure on corporations to increase and disclose their board’s diversity continues to intensify. The murder of George Floyd and other Black Americans in the spring of 2020 and the subsequent social unrest accelerated corporate efforts around diversity, equity, and inclusion as well as stakeholder and regulator demands for faster progress and greater transparency.

While there is a growing patchwork of regulations encouraging board diversity of gender, race and ethnicity, and sexual orientation and gender identity, the only board demographic information that all U.S. public companies are currently required to disclose is the age of each director. Nasdaq’s Board Diversity Rule is poised to have the most widespread impact to date, which will require most companies listed on its U.S. exchange to annually disclose board diversity statistics using a standardized template and to have at least two diverse directors or explain why they do not. This includes one director who self-identifies as female and one director who self-identifies as an “underrepresented minority” or as a member of the LGBTQ+ community. [1]

Nasdaq’s rule follows California SB 826 and AB 979, [2] which require public companies headquartered in California to have—depending on board size—one or more directors who self-identify as female as well as one or more directors who self-identify as coming from an “underrepresented community” (i.e., racially or ethnically diverse or LGBT). [3]

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