Nasdaq Board Diversity Rules Face Test Before Full Fifth Circuit

The full US Court of Appeals for the Fifth Circuit is set to hear oral arguments Tuesday in a conservative challenge to the stock exchange’s rules, after a panel of three Democratic-appointed judges upheld them last year. The New Orleans-based court, where Republican-picked judges have the majority, agreed to review the decision at the challengers’ request.

The Nasdaq rules at issue require thousands of publicly listed companies to report on their boards’ diversity and to include diverse directors or explain why they don’t. They needed approval from the Securities and Exchange Commission to take effect. The agency signed off on them in 2021 and is now defending the rules alongside the stock exchange.

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