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Photo: Kelly Sullivan/Getty Images
New diversity and inclusion rules are on the table for some of America's most powerful corporations, courtesy of one of its most powerful stock exchanges.
What's new: Nasdaq is threatening to delist companies that won't move toward having at least one woman and at least one underrepresented minority or LGBTQ person on their corporate boards.
Why it matters: More than 3/4 of the companies listed on the Nasdaq fall short of the proposed requirements, according to its own review.
- "Around 80% or 90% of companies had at least one female director, but only about a quarter had a second board member that would meet the diversity requirements," a source told The Wall Street Journal.
- The rules aren't immediate: If the SEC approves them, companies have a year to disclose their board breakdowns. Those that don't meet the requirements need to explain why.
- The proposal would give companies several years to meet the requirements, the Journal notes.
Between the lines: Nasdaq believes that forcing disclosure will cause companies to comply, thus preempting delisting decisions.
The big picture: Other countries, especially in Europe, made mandatory quotas a legal issue.
- Germany is now requiring at least one woman on any board that has three members, the Financial Times reports.
- "Norway introduced gender quotas in 2003, while Iceland, Spain and France require that women fill 40% of supervisory board seats," NPR reports.
The bottom line: California's boardroom law has shown that this can broaden the pool of people who get added to corporate boards.
- Of the 138 women who joined all-male California boards last year, 62% are serving on their first company board, Axios' Courtenay Brown reported earlier this year.
Go deeper: Axios Re:Cap today features Nasdaq's senior VP of corporate services to discuss the proposed policy rules. Listen here.