Maloney Praises SEC’s Approval of New Board Diversity Standards and Disclosures
WASHINGTON, DC – Congresswoman Carolyn B. Maloney (D-NY), senior member of the House Financial Services Committee, today released the following statement on the Securities and Exchange Commission (SEC) adoption of Nasdaq’s Board Diversity Proposal:
“I applaud the SEC’s adoption of the Nasdaq Board Diversity proposal, which will provide much-needed transparency on corporate board diversity. We show our priorities by our actions, and I strongly believe that by requiring companies to disclose this information, and therefore take a real look at the composition of their boards, we will create the right incentives and inspire change so that these boards better resemble the American public at large.
“Disclosing this information to investors empowers shareholders to support companies that embody their ideals and pull investments from those that don’t. Beyond making moral and common sense, increased diversity also makes financial sense. Studies have repeatedly found that companies with more diverse leadership are better positioned to succeed.
“I am acting on legislation to improve diversity within the Improving Corporate Governance Through Diversity Act. We must ensure more diversity in our banking system, diversity at the Federal Reserve, and diversity in corporate board rooms. One of my key priorities is getting more women, minorities, and individuals from historically underrepresented communities in corporate leadership positions. Leaders set the tone, and they set the priorities.
“The SEC’s adoption of the Nasdaq proposal is a vital next step for bringing true inclusivity to corporate America, and I thank Nasdaq and the SEC for advancing this initiative.”
In February 2016, Congresswoman Carolyn B. Maloney unveiled a report from the Government Accountability Office showing that women are severely underrepresented on corporate boards, taking up just 16 percent of seats in the boardroom. The study, which Maloney requested in May 2014, shows that even if the rate of women joining corporate boards were doubled, so they were hired at the same rate as men, it would still take at least 40 years (2056) for women to reach parity.
In response to these findings, the Congresswoman introduced legislation to require the Securities and Exchange Commission to update its diversity disclosure requirements, by requiring companies to report their strategies for recruiting more women into top corporate positions, both on boards and in senior management, and urged corporations to develop strategies to achieve gender parity more quickly. These provisions are incorporated into H.R. 1277, the Improving Corporate Governance Through Diversity Act of 2021, which passed the House earlier this year.
Additionally, the Congresswoman led a letter this year to the SEC expressing support for Nasdaq’s proposal to provide greater transparency into the composition and diversity of the board of directors of Nasdaq listed companies.