The NASDAQ Hearing and Listing Review Council is soliciting comments from companies, investors and other interested parties about whether it should adopt a “Comply or Explain” approach to corporate governance practices similar to that used in a number of non-U.S. markets writes Scott Fenn of Manifest's US partners, ProxyGovernance Inc.

The exchange says that this model can offer “flexibility to companies and transparency to investors and allows practices to evolve in a logical manner.” In a statement sent to its listed companies that was posted on the CorporateCounsel.net website, the exchange seeks comments on a broad list of potential best practice areas where a “comply or explain” approach to governance standards could be utilized, including:

• Expansion of executive sessions among independent directors and the agenda topics for those sessions;
• Limitations on outside board service;
• Requirements for director education;
• Shareholder votes on the appointment of outside auditors;
• Director resignation requirements in cases where directors fail to achieve a majority vote;
• Processes for communication between shareholders and directors;
• Board leadership structures; and
• Annual director elections.

Comments on the NASDAQ statement are due by Oct. 30.

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