Nasdaq to End Diversity Rule for Company Boards

Critics of the rule argue that the diversity requirement violates the Constitution’s Fifth Amendment.

The Nasdaq digital billboard in Times Square, New York, on Dec. 10, 2020. Kena Betancur/AFP via Getty Images

The Nasdaq stock exchange is moving to formally withdraw its rule mandating diversity quotas at companies after a federal appeals court recently struck it down.

The Nasdaq rule had required companies listed on the exchange to have at least two “diverse” board members, including “at least one director who self-identifies as a female” and one who “self-identifies as Black or African American, Hispanic or Latinx, Asian, Native American or Alaska Native, Native Hawaiian or Pacific Islander, two or more races or ethnicities, or as LGBTQ+.”