A Judicial Victory

Two years ago, the SEC approved the Nasdaq’s proposed new rule on board diversity and disclosure that would require all Nasdaq-listed companies to provide data on board members’ gender, race, and self-identification as LGBTQ+. The rule would also require that boards include at least one female and at least one person who self-identifies as an underrepresented minority.

In November, a federal court upheld the rule by rejecting a lawsuit that had challenged the SEC’s decision to uphold Nasdaq’s board diversity rule.

The court also upheld the SEC’s decision to approve the rule, saying that disclosure is a fundamental purpose of the Securities Exchange Act of 1934 and that board information is material to investors’ investment and voting decisions.

While two conservative organizations immediately appealed the ruling, it is important to have
this decision on record, as it affirms the important role the SEC plays in corporate disclosure. This is particularly poignant given that its disclosure rules related to climate change and human capital management are expected to be released in the near future.

Scroll to Top