States Challenge ‘Crude and Odious’ Nasdaq Diversity Rules

A coalition of seventeen Republican-led states has filed an amicus brief in support of a challenge against the Nasdaq for a set of diversity rules for corporate boards of directors that were approved by the Securities and Exchanges Commission last August. The amicus includes a litany of alleged abuses, including violations of the equal protection clause of the Constitution, infractions against traditional state jurisdictions, and an overreach of the Security and Exchange Commission’s authority. The challenge is led by the Alliance for Fair Board Recruitment (AFFBR), an organization dedicated to “promoting[ing] the recruitment of corporate board members without regard to race, ethnicity, sex and sexual identity.” The organization previously challenged similar laws passed by California in 2018 and 2020. The rules in dispute require all companies listed on the Nasdaq to report demographic data on the constitution of their boards of directors, including gender identity, racial background, and sexuality. The rules …

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