February 28th, 2021 by WCBC Radio
U.S. Senator Chris Van Hollen (D-Md.) joined Senator Bob Menendez (D-N.J.) in reintroducing legislation that would require public companies to disclose information related to the racial, gender, ethnic makeup, and veteran status of corporate boards and senior management. The Improving Corporate Governance Through Diversity Act of 2021 addresses shortcomings in the U.S. Securities and Exchange Commission’s (SEC) diversity disclosure rule. Congressman Gregory Meeks (N.Y.-05) is introducing companion legislation in the House.
“Our corporate boardrooms must reflect our nation’s diversity. To fully achieve inclusivity as a nation, we need transparency on the racial, ethnic, and gender make-up of boards and senior management for public companies,” said Senator Van Hollen. “This legislation marks an important step forward to increase the diversity of corporate leadership and decision-makers so that we can take advantage of America’s full economic potential.”
“For too long corporate America has fallen short in racial, ethnic and gender diversity. Without greater diversity in top corporate positions, the U.S. will fail to compete with other leading economies and stall our nation’s progress towards full inclusivity,” said Senator Menendez. “This bill will ensure transparency in corporate America, while highlighting the need for further accountability for public companies. It’s time corporate boardrooms mirror the rich diversity of our country.”
“Last Congress, the House passed the Improving Corporate Governance Through Diversity Act. Now, I urge my colleagues in the Senate to review and pass the companion bill Senator Menendez is reintroducing today,” said Representative Meeks. “Diversity is proven to have a positive impact on business performance and we want to ensure an equitable and fair future for everyone. Disclosing the gender, racial, ethnic and veteran makeup of these corporate boardrooms will not only shed light on the value of diversity, but hopefully encourage corporate shareholders to increase diversity in the highest ranks of their corporations.”
In addition to requiring public companies to report demographic information, the bill would also require the Director of the Office of Minority and Women Inclusion to publish a best practices and compliance report to the SEC every three years. The bill would also establish a Diversity Advisory Group, which would study the status of corporate diversity and submit annual reports to Congress.
Sens. Sherrod Brown (D-Ohio), Elizabeth Warren (D-Mass.), Cory Booker (D-N.J.), Dianne Feinstein (D-Calif.), Alex Padilla (D-Calif.), Kirsten Gillibrand (D-N.Y.), Catherine Cortez Masto (D-Nev.) and Raphael Warnock (D-Ga.) are cosponsoring the bill.
