The Nasdaq Stock Market board of directors has approved more than 25 new corporate governance reform proposals designed to increase accountability and transparency for the benefit of investors.
The reforms include:
- increasing board independence;
- empowering audit committees;
- strengthening the role of independent directors in compensation and nomination decisions;
- mandating director continuing education;
- requiring shareholder approval for all stock option plans;
- mandating have codes of conduct to address conflicts of interest and compliance with securities laws; and
- mandating that companies disclose insider transactions in company stock within two business days for transactions exceeding US$100,000.
Non-U.S. companies must disclose all exemptions to corporate governance listing standards due to contrary practices in their home countries. They must also file with the SEC and Nasdaq semi-annual and interim reports, including statement of operations and balance sheet, prepared in accordance with the rules of their home countries.
“Last month, Nasdaq was the first market to file rule proposals on corporate governance with the SEC. The board approved these reforms yesterday and we expect to file them with the SEC shortly,” said Richard Ketchum, president and deputy chairman, Nasdaq. “We designed the rules to be easy to apply and enforce, with specific ‘bright line’ standards to ensure proper interpretation. Some reforms will go into effect in as little as 60 days after SEC approval.”
“Nasdaq has adopted listing standards that will help our companies build on their commitment to provide increased transparency for investors,” said Wick Simmons, chairman & CEO, Nasdaq. “The new requirements are designed to help investors make better decisions.”