Nasdaq diversity push a plus for companies and exchange

By James Langton | August 11, 2021 | Last updated on August 11, 2021
1 min read
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Nasdaq’s recent move to enhance board diversity disclosures by its listed companies is a positive for both issuers and the exchange, says Moody’s Investors Service in a new report.

Last week, the U.S. Securities and Exchange Commission (SEC) approved a proposal from Nasdaq to change its listing rules to boost companies’ disclosure about the composition of their boards of directors — with the ultimate goal of enhancing diversity in corporate boardrooms.

The new rules will require most listed companies to have at least two “diverse” directors — including one female and one person who identifies as either an ethnic minority or LGBTQ+ — or to explain why they don’t.

Moody’s said that the move is a positive for both Nasdaq and its listed firms, given “the rules will improve transparency and disclosure, as well as encourage board-level diversity and inclusive representation.”

According to Moody’s, and as of June, Nasdaq had about 3,800 listed companies with a combined market cap of US$25.8 trillion (including exchange traded products and special purpose acquisition companies or SPACs, which are exempt from the proposed rule) — that group represents approximately 48% of total U.S. market cap.

Moody’s said that the exchange will benefit by improving the data available in this area because “more detailed and consistent disclosure of board diversity data has the potential to be a valuable addition to Nasdaq’s suite of index products.”

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James Langton

James is a senior reporter for and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.