Feinstein, Cortez Masto, Colleagues Introduce Legislation to Increase Diversity in Corporate Leadership
Mar 05 2020
Washington – Senator Dianne Feinstein (D-Calif.) joined Senators Catherine Cortez Masto (D-Nev.), Tina Smith (D-Minn.), Chris Van Hollen (D-Md.), Tammy Duckworth (D-Ill.), Jacky Rosen (D-Nev.) and Amy Klobuchar (D-Minn.) to introduce the Diversity in Corporate Leadership Act of 2020 to ensure transparency and encourage corporate leadership so that corporate boards reflect our nation’s diversity. Despite a strong business case for diverse leadership, corporate boards have not reflected the gender, racial and ethnic diversity of the United States.
With only three percent of Fortune 500 companies openly sharing diversity data, this legislation will help increase transparency by requiring the Securities and Exchange Commission (SEC) to issue a rule that calls for public companies to disclose the gender, racial, and ethnic composition of their boards and board nominees to shareholders and the public.
“Barely a third of Fortune 500 board members are women or minorities. That needs to change,” said Senator Feinstein. “Our bill would promote diversity and require more transparency from public companies to encourage corporate boardrooms to look more like the rest of the United States.”
“From the halls of Congress to our nation’s C-Suites, representation matters. For too long, corporate America has failed to make sure the voices of women and communities of color are represented in boardrooms, and the time for change is now,” said Senator Cortez Masto. “During Women’s History Month, I’m proud to introduce legislation that will help level the playing field in executive suites by increasing transparency and promoting board diversity. I’m honored to represent the state of Nevada, which reflects the beautiful diversity of America. I’ll continue doing everything I can in the Senate to make sure that our leaders in fields across the economy represent our country and to ensure underrepresented groups have a seat at the table.”
“The truth is, when we work to empower people from different races, ethnicities, and genders, we all benefit—and the economy does too,” said Senator Smith. “All parts of our identities should be a force of power and opportunity to contribute and share our strengths, and we need to make sure boardrooms reflect that. As a former small business owner and past employee of a Fortune 500 company, I’m proud to support the Diversity in Corporate Leadership Act and work toward that goal.”
“Increasing diversity at the top levels of corporate leadership will not only promote greater economic opportunity and equality across the board but will also help businesses to better succeed. I’m proud to cosponsor this bill, which will increase transparency and encourage racial, ethnic, and gender inclusion at the highest levels of executive leadership,” said Senator Van Hollen.
“Diversity makes our nation stronger and for too long, women—especially women of color—have been shut out and not given a seat at the table,” said Senator Duckworth. “Having an array of voices in leadership positions can make a big difference in the everyday lives of folks across the country. Corporate leadership should work towards making their boardrooms look more like their customers, which is one of the reasons I’m proud to join my colleagues in introducing legislation to help do that.”
“Nevada is home to some of the nation’s fastest growing industries as a result of our vibrant diverse communities,” said Senator Rosen. “However, we must do more to ensure that those leading our nation’s boardrooms are representative of our nation at large, and that means having corporations be transparent about diversity within the boardroom. I will continue working on common-sense legislation that promotes inclusion of historically underrepresented communities at all levels of the public and private sectors.”
Companion legislation was introduced in the House of Representatives last year by Reps. Carolyn Maloney (D-N.Y.), Emanuel Cleaver (D-Mo.) and Gregory Meeks (D-N.Y.). It passed the House Financial Services Committee by a 52 – 6 vote in July.
According to a recent study, women and minorities occupy only 38% of board seats at Fortune 100 companies and 34% at Fortune 500 companies. The Diversity in Corporate Leadership Act of 2019 would establish a Diversity Advisory Group, composed of representatives from the federal government, academia, and the private sector, to study corporate board diversity, report on study findings, and make recommendations to the SEC and Senate Banking and House Financial Services Committees. The reports will be public and available on the SEC’s website. The bill also requires public companies to disclose the aggregate gender, racial, and ethnic composition of their boards and board nominees to the public.
Full text of the bill is available here.