The U.S. Chamber of Commerce and other business groups wrote to the leaders of the Senate Banking Committee in support of the Improving Corporate Governance Through Diversity Act of 2019. H.R. 5084, which passed the House 281-135 in November 2019, would mandate issuer disclosures about boardroom and C-suite diversity and inclusion efforts. It would also direct the SEC to publish best practices and study how to improve gender, racial, and ethnic diversity on boards.
The coalition cited a recent PricewaterhouseCoopers survey finding that board directors overwhelmingly believe a diverse board brings unique perspectives, enhances board performance, improves relationships with investors, and enhances the company’s performance. The letter says that the pending legislation would "organically boost diversity" through disclosure.
The Act’s disclosure regime would require public companies to disclose in their proxy or information statements (or, if not applicable, in their annual reports) data on the racial, ethnic, and gender composition of the issuer’s board, board nominees, and executive officers; the veteran status of any board member, board nominee, or executive officer; and whether the board has adopted a diversity policy or strategy. The SEC would also report annually to Congress regarding its analysis of the disclosures required under the Act.
The other aspects of the bill would direct the SEC’s Director of the Office of Minority and Women Inclusion to publish best practices. The SEC would also be required to create a Diversity Advisory Group to study how to improve board diversity.
The signatories to the letter to Chairman Mike Crapo and Ranking Member Sherrod Brown are:
- American Bankers Association
- Bank Policy Institute
- Financial Services Forum
- International Council of Shopping Centers
- Nareit
- National Association of Investment Companies
- National Bankers Association
- National Black Chamber of Commerce
- National Business League, Inc.
- National Investor Relations Institute (NIRI)
- Retail Industry Leaders Association (RILA)
- TechNet
- The Latino Coalition
- The Real Estate Roundtable
- U.S. Black Chambers, Inc.
- U.S. Chamber of Commerce
- Walker's Legacy