December 21, 2022
Nasdaq Board Diversity Rule: New & Improved Compliance Dates
Last week, the SEC posted this notice for an immediately effective change to Nasdaq’s “disclose or comply” board diversity rule.
NASDAQ’s amendment relates to the compliance dates. Because it was one year after the original approval date of the rule, August 8, 2022 was set as the initial compliance deadline for board matrix disclosures under this rule, and all of the other compliance deadlines in the rule were keyed to that anniversary date. Nasdaq now wants to simplify the timeframe for disclosures made outside of the proxy statement. Here’s more detail:
– Rules 5605(f)(7)(A) and 5605(f)(3) – requirement for companies on The Nasdaq Global Select Market, The Nasdaq Global Market, and The Nasdaq Capital Market to have at least one “Diverse” director (or explain why you don’t) – moved from August 7, 2023 to December 31, 2023 (which is the deadline under the current rule for a company with a December 31st fiscal year-end to hold its annual shareholder meeting during the calendar year of the First Effective Date).
– Rules 5605(f)(7)(B) and 5605(f)(3) – requirement for companies listed on The Nasdaq Global Select Market or The Nasdaq Global Market to have at least two “Diverse” directors (or explain why you don’t) – moved from August 6, 2025 to December 31, 2025.
– Rules 5605(f)(7)(C) and 5605(f)(3) – requirement for companies on The Nasdaq Capital Market to have at least two Diverse directors (or explain why they don’t) – moved from August 6, 2026 to December 31, 2026.
– Rule 5605(f)(3) – in addition to the date changes above, the rule change will also permit companies to submit the URL link to disclosure that’s made outside of the proxy statement via email, to drivingdiversity@nasdaq.com (in addition to being able to submit it through the Nasdaq Listing Center).
– Rule 5606(e) – matrix disclosure after year 1 – the amendment clarifies that December 31st is the annual deadline for this required disclosure.
This rule change is immediately effective, although the Commission may temporarily suspend it if it determines that it’s necessary to do so. Interested persons are also invited to submit comments. These are welcome changes in my book – one less “gotcha” date to keep track of!
– Liz Dunshee