Board Diversity Disclosure Bills Introduced in Congress

February 08, 2019

Making good on a promise made on day one of the 116th Congress, Congressional Democrats led by Sen. Bob Menendez (D-NJ) and Rep. Gregory Meeks (D-FL) introduced legislation that would “require public companies to disclose specific information related to the racial, gender, and ethnic makeup of corporate boards and senior management.”

The Improving Corporate Governance Through Diversity Act would require enhanced disclosure of the “gender, racial, ethnic and veteran makeup” of “corporate C-suites and boardrooms," according to a press release by Rep. Meeks.  The text of the bill has yet to be released.

The SEC’s Office of Minority and Women Inclusion would also periodically publish best practices for compliance and establish an advisory council to assist in developing “public openness and accessibility” pursuant to another of the bill’s provisions revealed in the press releases.

Presidential candidates Sens. Kamala Harris (D-CA) and Corey Booker (D-NJ) have joined as cosponsors, giving the bill (H.R.1018/S.360) a higher profile, with both making diversity a central issue in their budding presidential campaigns.

Endorsements from the Council of Institutional Investors and the Chamber of Commerce increase the bill's chances, though no Republicans have signed on or announced support for the bill yet.

Meanwhile, the Securities and Exchange Commission updated guidance for companies that choose to disclose self-identified diversity characteristics for Board members and candidates.  Under the revision, if the Board considers gender, racial, or similar characteristics of Board members, companies should disclose that fact in the proxy indicating that the agency is also prioritizing the issue.