Companies listed on the tech-heavy Nasdaq stock exchange will have to comply with fresh gender and diversity rules implemented by the US’ financial markets watchdog.
The Securities and Exchange Commission agreed on Friday to introduce new measures that will force Nasdaq businesses to have at least two diverse directors.
If companies do not to comply with the new regime, they will have to explain why they have failed to meet the new targets.
Directors should include one person who identifies as female and another from an underrepresented background or LGBTQ+.
Firms will also need to provide a detailed breakdown of their board’s diversity credentials.
“The exchange also proposes to require each Nasdaq-listed company… to have, or explain why it does not have, at least two members of its board of directors who are diverse,” said the SEC in a approval order.
Gary Gensler, chair of the SEC, said: “These rules will allow investors to gain a better understanding of Nasdaq-listed companies’ approach to board diversity.”
“These rules reflect calls from investors for greater transparency about the people who lead public companies, and a broad cross-section of commenters supported the proposed board diversity disclosure rule,” he added.