Nasdaq says that the executive committee of its board of directors has approved initial recommendations and ideas to enhance corporate governance standards for the companies listed on Nasdaq.

These recommendations were sent today to Securities and Exchange Commission chairman Harvey Pitt in response to his letter to Nasdaq chairman and CEO Wick Simmons and NYSE chairman and CEO Richard Grasso on February 12.

A Nasdaq standing committee on listing and corporate governance issues, has identified a number of key areas for action, including: the redefinition of an independent director, requiring shareholder approval of stock option plans, and changes to the auditor selection process, codes of conduct, and continuing education for board members. Nasdaq is also considering the establishment of an annual award for the company in each market sector that displays the most enlightened and progressive practices in corporate governance.

Of special note for Canadian issuers, Nasdaq is also considering a recommendation that the SEC require non-U.S. companies to disclose whether they have received a waiver of a corporate governance standard from Nasdaq. And, it is considering further improvements to listing standards for foreign issuers to ensure that the spirit of U.S. corporate governance standards is met even when the letter of the foreign rules is different.

“Nasdaq is fully committed to enhancing the markets through strong corporate governance requirements and supporting the spirit, as well as the letter, of these standards,” said Simmons. “We plan to host two Nasdaq Corporate Governance Summits with our companies next month – one in the East and one in the West – to foster a dialogue on these recommendations. Final proposals will be brought back to our board for discussion and approval.”