A new Nasdaq Board Diversity Rule encouraging minimum board diversity has been approved by the US Securities and Exchange Commission.
Board diversity is well-recognised as making good business sense and this Rule is another important example of efforts to foster an inclusive industry culture, and an opportunity for biotech to attract the best and brightest talent from diverse backgrounds.
Nasdaq’s disclosure requires all companies that are listed on Nasdaq’s US exchange to publicly disclose their Board of Directors’ diversity composition statistics through consistent and comparable reports.
The rules require Nasdaq-listed companies to have—or explain why they don’t have—at least two diverse directors, including one who self-identifies as female and one who self-identifies as either an underrepresented minority or LGBTQ+. Flexibility is offered to foreign issuers and smaller reporting companies.
Following the new Board Diversity Rule is thoroughly encouraged, however it is not mandated. Nasdaq will verify that each company has provided an explanation but will not assess the explanation’s merits. There is no right or wrong reason that a company may give for not having at least two directors.
To continue this important discussion and engage on how to ‘build your board as you grow’, register for the AusBiotech 2021 conference. A dedicated session will feature a panel of experienced directors and cover elements of building and operating as an effective board from an early stage to IPO and beyond.
AusBiotech has re-commissioned its biennial research into the shape and size of the life sciences industry, including tracking Australian biotech’s gender diversity landscape across the levels of leadership. This research will also be released at AusBiotech 2021.
The 2019 research found that women form 51 per cent of the workforce across the life sciences sector, however, women in the industry are still under-represented (32 per cent). This decreases as seniority increases, with executive-level women representing 25 per cent and female board members representing 15 per cent. The Sector Snapshot 2019 research can be read here.