Law360 Quotes Lewis on Nasdaq Board Diversity Rule Case
Law360 quoted Shook Houston Managing Partner and Chair of Firmwide Diversity & Inclusion Initiatives John Lewis, Jr. in an article about the U.S. Court of Appeals for the Fifth Circuit’s review of a new U.S. Securities and Exchange Commission (SEC) rule requiring Nasdaq-listed companies to disclose board diversity data.
The rule requires companies that are listed on the stock exchange to disclose certain board diversity data to investors and provide a written explanation when their boards do not have at least two diverse members. The Alliance for Fair Board Recruitment asked the Fifth Circuit to review SEC's 2021 approval of the rule. The court heard oral arguments in the case Aug. 29.
In the article, Lewis spoke to the value of diverse boards. He also said that the court may sidestep issues of materiality or the merits of the rule to consider whether SEC overreached in approving it.
“It may be that the circuit says, ‘This was not what was intended … to be the subject of rulemaking, and it represents an overreach of the administrative prerogative of Nasdaq and these agencies,’” he said.
The rule requires companies that are listed on the stock exchange to disclose certain board diversity data to investors and provide a written explanation when their boards do not have at least two diverse members. The Alliance for Fair Board Recruitment asked the Fifth Circuit to review SEC's 2021 approval of the rule. The court heard oral arguments in the case Aug. 29.
In the article, Lewis spoke to the value of diverse boards. He also said that the court may sidestep issues of materiality or the merits of the rule to consider whether SEC overreached in approving it.
“It may be that the circuit says, ‘This was not what was intended … to be the subject of rulemaking, and it represents an overreach of the administrative prerogative of Nasdaq and these agencies,’” he said.
