A U.S. Appeals Court overturned a Securities and Exchange Commission rule that had required companies listed on the Nasdaq stock exchange to disclose whether their boards had women or minority members-and if not,

A federal appeals court on Wednesday struck down the Nasdaq's diversity disclosure rules for companies listed on the stock exchange, which were designed to boost the representation of women and minority directors on boards.

The rules required thousands of public companies that trade on Nasdaq to have at least one woman, person of color or LGBTQ member on their boards unless they explained why they did not. Companies also must report the diversity of their corporate directors each year.

The message from Nasdaq as the Black Lives Matter movement exploded across the US: push for diversity – or prepare to explain.

Opponents of the proposed DEI rule said it amounted to a public shaming of companies. They also faulted the SEC's approval of the measure.

The boardrooms of most major companies are no longer completely male-dominated — globally nearly all large public firms now have at least one woman director. Why it matters: It's a reflection of a big push for diversity in the boardroom that's now stalled out.

In a 9-8 en banc decision, the U.S. Court of Appeals for the Fifth Circuit blocked the Nasdaq board diversity rules, ruling that the U.S. Securities and Exchange Commission (SEC) lacked the authority to approve the rules.