Stay up-to-date with the latest developments in securities law through access to both news and all statutes and regulations. Find relevant corporate filings through a searchable EDGAR database. And...
Democratic lawmakers want the Securities and Exchange Commission to follow through on suggested improvements to corporate disclosures on board diversity.
Shortly before Mary Jo White stepped down as the SEC’s chairman, she asked the staff to review reporting requirements with an eye toward seeking more details on directors’ diversity. Now Rep. Gregory Meeks (D-N.Y.) and 28 of his peers in the House are calling on the commission’s new chairman to finish the work she started.
“The SEC’s corporate board diversity rule is broken,” Meeks said in a statement May 25. “Although many companies have complied with the spirit of the law, many other companies fall short of providing valuable information to investors regarding their boards’ racial, ethnic, and gender composition.”
Director diversity is a topic investors are increasingly vocal on because they say it can help boards better manage risk by avoiding groupthink and has been linked to better company performance. Diversity and its benefits for boards have also been highlighted by the chief executive officers of JPMorgan Chase & Co. and Berkshire Hathaway Inc., as well as those at BlackRock Inc. and Vanguard Group.
White, who was a director at Nasdaq before becoming a regulator, has lamented the lack of boardroom diversity in the U.S. Only about 20 percent of S&P 500 board seats are held by women and just 14 percent are held by minorities, according to a recent study commissioned by the Investor Responsibility Research Center (IRRC) Institute.
The SEC can’t “mandate board diversity,” White said in a speech last June, but it can make companies provide more meaningful disclosure on it. After she asked staff to look into diversity disclosures, an SEC advisory committee kept the conversation alive with a February recommendation to the commission.
Companies are already required to say whether, and if so how, they consider diversity when assessing director candidates. Under the committee’s recommendation, companies would also need to report on how diverse their boards are.
As staff turns over with the new administration, the SEC hasn’t yet responded to that recommendation, the advisory committee’s co-chair Sara Hanks told Bloomberg BNA. An SEC spokesperson declined to comment on whether the commission is considering it or if it plans to move forward with a proposal.
When current SEC Chairman Jay Clayton was asked after his Senate nomination hearing in March if he would continue White’s efforts to improve corporate reporting on board diversity, he pledged to “monitor” the issue. “I believe diversity has value, including at public companies and their boards,” Clayton wrote in response to questions on the subject from three senators.
Clayton should go beyond “mere monitoring” and work on a proposal, Meeks and other lawmakers, including Reps. Maxine Waters (D-Calif.) and Carolyn Maloney (D-N.Y.), said in a May 24 letter.
To contact the reporter on this story: Andrea Vittorio in Washington at email@example.com
To contact the editor responsible for this story: Yin Wilczek at firstname.lastname@example.org
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)