Bill Highlighting Lack of Women on Boards Reaches Across Aisle

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By Andrea Vittorio

A bill highlighting corporate boards’ lack of women has the potential to appeal to both sides of the aisle as a House committee prepares to vote on it this week.

Legislation from Rep. Carolyn Maloney (D-N.Y.) would require publicly traded companies to disclose the gender of their directors, with the goal of nudging companies to bring more women into their mostly male boardrooms. The bill ( H.R. 1611) is slated to be marked up July 11 by the House Financial Services Committee.

It’s one of only about a dozen bills put forward by Democrats, among hundreds that are filed, that the Republican-led committee has voted on this Congress. So far, they’ve all passed the committee. Maloney’s bill, co-sponsored by five Democrats and one Republican, is expected to do the same.

The next step would be a vote on the House floor, followed by the Senate. But so far no matching Senate legislation has been introduced.

When it comes to women’s representation on boards, “I think we can all recognize that we should be doing better,” Maloney said in an email to Bloomberg Law. Women held less than 17 percent of board seats at companies in the Russell 3000 index as of the end of March, according to the latest data from Equilar Inc. About one-fifth of these companies had no female directors.

“This measure is simply about ensuring that investors have easy access to the information that they want — and need — to assess companies’ performance,” Maloney said. State Street Corp. and other institutional investors have been pressing companies with all-male boards to add women or risk votes against directors.

Business Case

The bill’s backers include Catalyst, a nonprofit that helps advance women in the workplace, and the pro-business U.S. Chamber of Commerce.

“What’s good for women is good for business,” said Brande Stellings, who leads Catalyst’s consulting services for companies and their boards. Studies show companies with more women on their boards perform better financially.

“Given their mission and our mission, we’re clearly aligned on this,” she told Bloomberg Law.

The chamber, which has been lobbying for Maloney’s legislation in recent months, backs the bill for what it isn’t — a quota. It says quotas for how many women should be on each board are “counterproductive” and prefers the legislation’s disclosure-driven approach instead.

Less Guesswork

Stellings said the bill would take the “guesswork” out of tracking how many women are on corporate boards.

“Some you can tell from the pictures, the names, or the pronouns they use in the person’s bio,” she said. “But it’s not always obvious. There are names that are gender-neutral.”

Required reporting would also help show how women’s representation changes over time, Stellings said. The bill would create an advisory group at the Securities and Exchange Commission that studies gender diversity and recommends strategies for boosting it.

Even if women take half of all new board seats, it could be more than 40 years before they achieve parity in the boardroom, according to a report Maloney requested from the Government Accountability Office. She introduced similar legislation in 2016, but it didn’t get a committee vote.

To contact the reporter on this story: Andrea Vittorio in Washington at avittorio@bloomberglaw.com

To contact the editor responsible for this story: Fawn Johnson at fjohnson@bloomberglaw.com

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