Nasdaq has proposed board diversity requirements as a condition to continued listing of corporations. The proposal adopts a ‘comply or disclose’ approach to encourage greater diversity on company boards requiring them to have at least one director who self-identifies as female and have one director who self-identifies as black or African American, Hispanic or Latinx, Asian, Native American or Alaskan Native, Native Hawaiian or Pacific Islander, or as LGBTQ+, or alternatively to explain why the company does not meet those diversity requirements.

Nasdaq proposes to implement the changes gradually with diversity information provided after one year, one director self-identifying as diverse within two years, and two such directors within four or five years. The proposed requirements would apply to foreign issuers who may satisfy the requirements by two directors who self-identify as female and with more flexibility as to the applicable diversity categories.

The proposed changes are subject to public comment and SEC approval.