Nasdaq seeks US approval to require board diversity

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The Nasdaq asked US securities regulators to approve a requirement that listed companies have at least two diverse board members

Citing sluggish progress in appointing non-white directors, the Nasdaq announced Tuesday it was seeking US regulatory approval to enact diversity requirements on listed companies.

The exchange filed a request with the Securities and Exchange Commission to require listed companies to have, or explain why they do not have, at least one female board member and one board member who identifies as either an underrepresented minority or LGBTQ.

The exchange, in a 271-page proposal to the SEC, cited academic research showing the benefits of board diversity to company performance.

The filing also noted that diversity in the US lags that of other countries and alludes to a World Economic Forum study that rated the US 53rd in board gender diversity. The exchange said Nasdaq-listed companies are already subject to European Union requirements on board diversity.

"We are taking the leadership here because there has been so little action on this front, and we do think it's an important thing for us to do, to create a more inclusive capitalist society," Nasdaq Chief Executive Adena Friedman said in an interview on CNBC.

Friedman told CNBC that she believes the "vast majority" of Nasdaq's companies already have at least one female director but that the boards are far less representative in terms of other diversity.

Friedman said she would "welcome" a decision by the rival New York Stock Exchange to enact equivalent requirements.

jmb/cs