Nasdaq Inc. is on the verge of securing the support of the U.S. Securities and Exchange Commission (SEC) to help get more women and minorities on the boards of companies trading on the stock exchange.

The SEC is expected to give initial, and potentially binding, approval of a Nasdaq board diversity proposal by August 8. The endorsement would be the SEC's most substantial action to encourage diversity and inclusion since the agency made environmental, social, and governance (ESG) matters a top priority under the Biden administration.

Nasdaq's plan would be the most significant diversity requirements in the United States since California passed laws in 2018 and 2020 that mandated diverse boards for companies headquartered in the state. The proposal directs Nasdaq-listed companies to pursue board diversity by having at least one female board member and at least one who identifies as an underrepresented minority or LGBTQ, or else to explain why they don't meet those criteria.