The Nasdaq stock exchange has filed a request with the SEC to make a major change to listing requirements for the companies on its exchange.
It will also require most Nasdaq-listed companies to have at least two diverse directors, including one female board member and one who is an underrepresented racial minority or LGBTQ.
Boards must bring on the first director within two years, and the second within 2–3 years.
Failure to comply could result in the company being delisted from the Nasdaq exchange.
According to a Nasdaq spokesperson in a statement, an estimated 85% of companies listed on the Nasdaq already meet the first criteria of having one board member be a woman or from an underrepresented community.
Women and minority groups have been underrepresented in corporate boardrooms for a long time. The push for corporate diversity is growing.
California passed a similar law in October. It mandated all California based publicly trading companies have at least one board member from an underrepresented community.
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