Action on a Nasdaq proposal to have companies publicly disclose and increase the diversity of their boards will be delayed, the Securities and Exchange Commission said.
A notice posted Wednesday on the SEC website said that the delay is to allow for additional analysis and public input, and that it "does not indicate that the Commission has reached any conclusions with respect to any of the issues involved."
Nasdaq's original proposal called for giving companies one year to comply with the disclosure requirement and to have at least one diverse director within a year. Companies would have to either include two diverse directors or explain why not. All companies would be required to have a female director and one from an underrepresented minority within five years.
Following more than 200 public comments, Nasdaq made several changes, including giving smaller companies more flexibility by having one diverse director and offering a grace period in the case of a diverse director vacancy. The amended rule also clarifies the scope of exempt companies.
Many commenters supported the proposal, including Rhode Island Treasurer Seth Magaziner, whose comment letter said that "a growing body of research demonstrates that diversity in the board room correlates with stronger performance for shareholders."
Once the notice is published in the Federal Register, the SEC will have 90 days to decide, but could seek two more months, with a final decision by August.
Nasdaq welcomed the SEC taking additional time, "and we appreciate the opportunity to respond to further comments regarding the proposal," spokesman Will Briganti said in an emailed statement.
