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Representative Gregory W. Meeks (D-N.Y.) has recently introduced the Improving Corporate Governance Through Diversity Act of 2019, which will require public companies to disclose the gender, race, ethnicity and veteran status of their board directors, nominees and senior executive officers, as a way to track the progress of diverse representation in the corporate sphere.
“Diversity has been proven to have a positive impact on business performance, and it is only natural for investors to want to know which companies are choosing to bring in a wealth of different perspectives into their corporate board rooms,” Representative Meeks said in an official statement. “Revealing the gender, racial, ethnic, and veteran makeup of these corporate C-suites and boardrooms will not only shed light on the value of diversity, but hopefully encourage corporate shareholders to increase diversity in the highest ranks of their corporations.”
The bill has received support from the NAACP, the Council for Institutional Investors and from the U.S. Chamber of Commerce as a way to increase the diverse representation of gender, race, and ethnicity on the corporate boards of directors.
Having a diverse board leads to better business performance according to the PwC’s 2018 Annual Corporate Directors Survey. Of the board directors surveyed, 94 percent claimed that have a diverse board brings unique perspectives, 84 percent indicated that such diversity “enhances board performance,” and 91 percent stated that their boards are taking measures to increase diversity.
The introduced bill will endeavor to makes sure public companies are doing their part to bring more unique voices to the table by empowering the SEC’s Office of Minority and Women Inclusion (OMWI) to publish triennial reports of best practices for complying with the new disclosure rules, as well as create an advisory council with the Federal Advisory Committee Act. OMWI will also be allowed to solicit public comments on its best practices publications.
The Chamber notes that this “model to organically boost diversity on boards” has the potential to be more effective at producing deliverables than quota-driven strategies that have previously been attempted by jurisdictions.
NAWRB has been heavily involved in addressing the issue of diversity and inclusion throughout the entire housing ecosystem. In August 2010, Desiree Patno, CEO of NAWRB, authored an article in HousingWire, bringing attention to the Dodd-Frank Act specifically the Provision 342 for the creation of the Office of Minority and Women Inclusion (OMWI) in federal agencies beginning in January 2011.
This was a major step towards accountability for women’s employment and women-owned businesses in our industry. Since then, we have had OMWI directors speak at each and every one of our conferences to discuss current progress and strategies.
Six years later, NAWRB submitted comments in response to the Federal Housing Finance Agency (FHFA)’s Notice of Proposed Rulemaking (NPRM) and Request for Comments (RFC) published by the FHFA in October 2016, calling for the public’s input on the proposed changes to their minority and women inclusion amendments. Our comments were taken into consideration and discussed in the rule’s final version.
In 2018, we publicly supported the passing of the SB 826 Women on Corporate Boards Bill that required public companies in California to have at least one woman on their boards by the end of 2019.
We are pleased to see policies and legislation taking a step toward actionable solutions for increasing the representation of women and minorities at all levels of employment, and making sure they have a seat at the table.
Learn more about Representative Meek’s proposed bill here.