On August 6 the SEC approved the Nasdaq Stock Market’s proposal to amend its listing rules to require operating companies listed on its U.S. exchanges to provide annual disclosures about the diversity of their board membership.

The new rules require listed companies, beginning in 2022, to disclose each year specified board-level diversity data in a uniform format in their annual proxy or information statement or on their website. In addition, after a more extended phase-in period, companies must either meet the exchange’s board diversity “objectives” as set forth in the rules or, if they do not, explain why. The rules define diversity in terms of gender identity, race and ethnicity, and LGBTQ+ identity, as self-identified by board members. Listed foreign issuers may elect to comply with alternative requirements modified to accommodate their different diversity considerations and restrictions under home country law.