In Latest DEI-Related Litigation Development, Fifth Circuit Declines to Review SEC’s Approval of Nasdaq’s Board Diversity Rule
On October 18, 2023, a three-judge panel for the U.S. Court of Appeals for the Fifth Circuit denied petitions to review the SEC’s approval of Nasdaq’s board diversity disclosure rule, which requires Nasdaq-listed companies to have female and minority or LGBTQ+ directors on their boards (or explain why they do not), and disclose diversity statistics of their directors. With this decision, the Nasdaq rule remains in effect, and Nasdaq-listed companies subject to the rule should be prepared to comply with the initial annual reporting deadline of December 31, 2023. In declining to review the SEC’s approval of the rule, the disclosure-based framework for the rule may help guide corporate approaches to other diversity, equity and inclusion (“DEI”) policies, programs and practices.