A federal appeals court overturns the diversity mandates established by Nasdaq for its board of directors.
A higher court in the United States on a close vote recently decided that Nasdaq can't enforce regulations requiring companies listed on the platform to have females and minority representatives on their boards or justify why they don't.
The 5th U.S. Circuit Court of Appeals, based in New Orleans, made this decision by a narrow margin of 9 to 8, supporting two conservative advocacy groups that argued against the regulations.
These regulations were objected to by the National Center for Public Policy Research, a conservative research organization, and Alliance for Fair Board Recruitment, a group initiated by Edward Blum, an opponent of affirmative action.
Initially, a panel of three judges from the 5th Circuit, all appointed by Democratic presidents, supported Nasdaq's regulations in 2023, asserting that the SEC acted within its jurisdiction when it approved the rules.
However, the majority conservative court decided to reconsider this matter. All nine judges in the majority were appointed by Republican presidents, including the author of the ruling, U.S. Circuit Judge Andrew Oldham, who was appointed by President-elect Donald Trump during his first term.
The decision by the 5th U.S. Circuit Court of Appeals could potentially impact various businesses listed on Nasdaq, as they no longer need to comply with regulations regarding gender and minority representation on their boards. The National Center for Public Policy Research, a business-related organization, advocated against these regulations, aligning with the court's conservative viewpoint.
