US appeals court rejects Nasdaq's diversity rules for company boards

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Business,Robert Garcia

An appeals court in Louisiana has ruled that Nasdaq can’t require diversity on the boards of companies that list on the exchange.

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Some conservative groups and Republican lawmakers have strenuously opposed the proposal, arguing the requirements were arbitrary and burdensome. “It is not unethical for a company to decline to disclose information about the racial, gender, and LGTBQ+ characteristics of its directors,” the ruling stated. “We are not aware of any established rule or custom of the securities trade that saddles companies with an obligation to explain why their boards of directors do not have as much racial, gender, or sexual orientation diversity as Nasdaq would prefer.

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