SEC Approves NASDAQ Rule Change Broadening Exception for Non-Independent Director Committee Service | Practical Law

SEC Approves NASDAQ Rule Change Broadening Exception for Non-Independent Director Committee Service | Practical Law

The SEC approved a NASDAQ rule change broadening NASDAQ's exception permitting listed companies to allow one non-independent director to serve on an audit, compensation or nominations committee for up to two years under certain exceptional circumstances.

SEC Approves NASDAQ Rule Change Broadening Exception for Non-Independent Director Committee Service

by PLC Corporate & Securities
Published on 23 Jul 2012 • USA (National/Federal)
The SEC approved a NASDAQ rule change broadening NASDAQ's exception permitting listed companies to allow one non-independent director to serve on an audit, compensation or nominations committee for up to two years under certain exceptional circumstances.
On July 19, 2012, the SEC approved a NASDAQ rule change broadening an exception to NASDAQ's board committee independence rules. NASDAQ proposed the rule change on May 17, 2012.
The exception permits a listed company to allow one non-independent director to serve on its audit, compensation or nominations committee for up to two years under exceptional and limited circumstances and with proper disclosure. Under the amended exception, a director is not disqualified from serving as a temporary committee member solely because a family member is a non-executive employee of the company.
For more information on NASDAQ corporate governance standards, see Comparative Corporate Governance Standards Chart: NYSE vs. NASDAQ.