An appeals court in Louisiana on Wednesday rejected Nasdaq’s proposed rules aimed at increasing diversity on company boards.
The Fifth U.S. Circuit Court of Appeals in New Orleans ruled that Nasdaq cannot implement its proposed diversity policies, which would require companies listed on the stock exchange to have or disclose why they do not have minority and female directors on their boards. The appeals court said in the ruling that the Securities and Exchange Commission (SEC) did not have the authority to approve the proposed rules.
“Nasdaq proposed rules that compel the companies listed on its exchange to disclose information about the racial, gender, and sexual characteristics of their directors, and to have (or explain why they do not have) at least two directors who meet Nasdaq’s definition of ‘diverse,’” the ruling stated. “SEC approved those rules. We hold,…
