Board Diversity Rule
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Frequently Asked Questions
  What happens if one of our company's two diverse directors unexpectedly leaves the board?
Identification Number 1783
A company that met the diversity objectives of Rule 5605(f)(2) but no longer meets the diversity objectives due to a vacancy on its board of directors (for example if a diverse director falls ill or resigns), has a grace period to regain compliance until the later of: (i) one year from the date of vacancy; or (ii) the date the company files its proxy statement or its information statement (or, if the company does not file a proxy, in its Form 10-K or 20-F) in the calendar year following the year of the date of vacancy, to satisfy Rule 5605(f)(2) or (3).  In lieu of providing the explanation required by Rule 5605(f)(3), a company relying on the grace period may publicly disclose that it is relying on the grace period provided by Rule 5605(f)(6)(B). For example, a company relying on the grace period may disclose as follows:  “The Company is relying on the grace period provided by Nasdaq Rule 5605(f)(6)(B) related to diverse board representation.” Such disclosure must be provided: (a) in any proxy statement or any information statement (or, if the company does not file a proxy, in its Form 10-K or 20-F); or (b) on the company’s website. If the company provides such disclosure on its website, then the company must submit such disclosure concurrently with the filing made pursuant to (a) and submit a URL link to the disclosure through the Nasdaq Listing Center, within one business day after such posting. This is intended to notify stakeholders of the company’s change in board composition without imposing an additional, unexpected disclosure burden on the company.  

Publication Date*: 8/6/2021 Mailto Link Identification Number: 1783
material_search_footer*The Publication Date reflects the date of first inclusion in the Reference Library, which was launched on July 31, 2012, or a subsequent update to the material. Material may have been previously available on a different Nasdaq web site.
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