Rep. Gregory W. Meeks Introduces Bill to Shine Light on Corporate Diversity and Inclusion

Feb 8, 2017

Rep. Gregory W. Meeks Introduces Bill to Shine Light on Corporate Diversity and Inclusion

Washington, D.C. U.S. Congressman Gregory W. Meeks, a senior member of the House Financial Services Committee, introduced legislation requiring large federal contractors and public companies to submit information on the diversity of their board of directors and senior management teams.  The Improving Corporate Governance through Diversity Act of 2017 (H.R. 970) expands current disclosure rules, issued by the Securities and Exchange Commission, to improve transparency and publicly available information regarding corporate diversity numbers and practices.

“For far too long, corporate boards and c-suites have been vestiges of old boys’ clubs.  That is, corporate boards have not reflected the diversity of their workers, their investors, their customers, or Americans at large.  Not only is this unfair, but the wrong way to conduct business,” Congressman Meeks said. “Studies overwhelmingly show the financial benefits of bringing to the table diverse individuals from all walks of life. My bill will shine a brighter light on corporations, keeping them honest and encouraging them to be more inclusive.”

The Improving Corporate Governance through Diversity Act of 2017 requires large federal contractors and public companies to release data on the racial, ethnic, and gender composition of their boards and senior management teams.  The bill requires similar disclosures to the Securities and Exchange Commission regarding public companies’ board nominees. The bill requires contractors and public companies to disclose plans or strategies they have incorporated to improve their diversity.  Last, the bill instructs the General Services Administrator to submit to Congress a report analyzing diversity data submitted by federal contractors, identifying corporations that lag in diversity compared to their industry peers.

Congressman Meeks’ legislation follows a study released by Deloitte revealing only modest gains in corporate board diversity in recent years.   The study found that since 2012, there has been only a 1 percent increase in the number of African-American men who serve on the boards of Fortune 500 companies.  Furthermore, African-Americans had the highest rate of serving on multiple boards, suggesting that large companies are often choosing from the same candidates instead of expanding their search to all qualified African-Americans.  The study also found small improvements in women representation on the boards of Fortune 100 companies. 

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