CFO Slice

A U.S. appeals court has ruled that Nasdaq cannot require companies listed on its exchange to include women, racial minorities, or LGBTQ individuals on their boards or explain their absence. The conservative-majority 5th U.S. Circuit Court of Appeals, based in New Orleans, found that the rules, approved by the U.S. Securities and Exchange Commission (SEC), violated federal securities law. The decision, a 9-8 ruling, is a significant victory for opponents of corporate diversity mandates. The challenge was led by conservative groups, including the National Center for Public Policy Research and the Alliance for Fair Board Recruitment, founded by Edward Blum, who previously led the successful Supreme Court case against race-conscious college admissions. Writing for the majority, Judge Andrew Oldham, a Trump appointee, said: "SEC has intruded into territory far outside its ordinary domain." Nasdaq, which believed its rule would benefit companies and investors, announced it would not appeal the decision. The SEC said it is reviewing the ruling, which could only be overturned by the Supreme Court. The case highlights a broader debate on the role of federal regulators in shaping corporate diversity policies.