June 21, 2019
House Financial Services Committee members expressed bipartisan support for bills aimed at increasing diversity on corporate boards and in the C-suite through increased disclosures and a mandatory “Rooney Rule” for federal reserve banks.
Members of Congress and witnesses discussed two bills:
Democrats cite statistics showing slow growth in board diversity, C-suite representation: Led by Chair Maxine Waters (D-CA), Democrats were emphatically supportive of each of the bills, citing the lagging growth in diversity on boards, especially among people of color.
“Pursuing diverse boards is the right thing to do as a matter of economic interest,” stated Republican Ranking Member Patrick McHenry (R-NC), citing research showing the positive economic benefits of diversity in the board room and the C-suite.
Bipartisan support sets path for House success: Without opposition, the bills are likely to pass the House Financial Services Committee and the House as well. In the Senate, Sen. Bob Menendez (D-NJ) has already introduced a version of the board diversity disclosure bill. However, quick Senate action is unlikely, with Majority Leader McConnell (R-KY) focused primarily on must-pass legislation and nominations.
An Illinois board diversity mandate bill has been revised to require reporting and research before heading to the governor's desk. The Illinois measure, which would have required all Illinois-based companies to have one woman, one African American, and one Latino on their boards, was amended to eliminate the mandated representation, while requiring companies to report board demographics to the Illinois Secretary of State. More importantly, the bill would direct the University of Illinois to study the data and make recommendations on ways to expand diversity on company boards in the state and publish a rating on each company's efforts to increase their board's diversity.