The U.S. Securities and Exchange Commission has approved Nasdaq's proposal to require every company listed on its U.S. exchange to have at least one director who self identifies as a female and one director who is either an underrepresented minority or LGBTQ+.
If a company cannot meet this diversity requirement, it must provide written explanation as to why. Given that over 3,500 companies are listed on this second-largest stock exchange, this new requirement is expected to shake up the operations of numerous entities in the U.S.
Other board diversity initiatives are also underway. Since 2018, California has required that publicly traded corporations based in the state have at least one woman on their boards of directors. Although that law is currently being challenged, other states are still considering enacting similar laws.