Rep. Maloney Speaks in Support of Increasing Diversity on Corporate Boards

Jun 16, 2021
Press Release

WASHINGTON, DC – Congresswoman Carolyn B. Maloney (D-NY), senior member of the House Financial Services Committee, today spoke on the House floor urging all her colleagues to support H.R.1187, the Corporate Governance Improvement and Investor Protection Act, which includes an amendment offered by Reps. Gregory  W. Meeks (NY-05), Maloney, and Ritchie Torres (NY-15), the Improving Corporate Governance Through Diversity Act. The bill passed by a vote of 215 to 214.

 

H.R. 1187 is a legislative package that would provide investors and markets with critical information related to environmental, social, and governance (ESG) matters. The Improving Corporate Governance Through Diversity Act would help investors accomplish greater diversity in corporate board rooms by requiring public companies to report the voluntary, self-identified racial, ethnic, gender identity, and sexual orientation composition of their board members and executive officers in their annual proxy statement and establishing a Diversity Advisory Group at the Securities and Exchange Commission (SEC). This body would study issues related to diversity and make policy recommendations.

 

You can watch the Congresswoman’s floor speech here and a transcript is below.

 

“Madam Speaker, I also rise in support of H.R. 1187, the Corporate Governance Improvement and Investor Protection Act, and specifically, the Meeks-Maloney-[Torres] amendment that we will consider today.

 

“We show our priorities by our actions, and today we are not just talking about diversity, we are acting to improve diversity in the corporate board room.

 

“I want to thank Mr. Meeks, the sponsor of this amendment. He and I have worked on this issue a long time together, and I thank him for his leadership.

 

“The goal of our amendment, the ‘Improving Corporate Governance Through Diversity Act,’ is extremely important — increasing diversity on corporate boards.

 

“This is something I believe in passionately, and while we’ve made great progress, we still have a long way to go.

 

“Getting more women, minorities, and individuals from historically underrepresented communities into corporate leadership positions is extremely important. Leaders set the tone, and they set the priorities.

 

“Back in 2015, I asked the Government Accountability Office to look at the gender makeup of corporate boards — and the results were discouraging, and they convinced me that we need to do more.

 

“Women make up roughly 47 percent of the workforce, and yet they hold roughly 29 percent of corporate boards [positions].

 

“The GAO found that even if we assume that equal proportions of women and men started joining boards starting right now, it would take more than 40 years for there to be an equal number of women and men in the corporate board rooms.

 

“We can’t wait 40 years for parity. Something needs to change.

 

“But let’s also be clear: increasing diversity on corporate boards is not just a moral issue — it’s good for business too.

 

“Study after study has shown that companies with greater diversity on their boards perform better financially.

 

“Which is why investors want the companies they invest in to make diversity a priority. In fact, I have started working on this bill at the request of investors and investor organizations that wanted to more easily be able to track diversity on boards.

 

“This legislation would help investors accomplish this by requiring public companies to report the voluntary, self-identified racial, ethnic, gender identity, and sexual orientation composition of their board members and executive officers in their annual proxy statement.

 

“And by putting this information in one place for investors, the bill would help investors to quickly sort the companies that do and do not have diverse boards.

 

“The legislation would also establish a Diversity Advisory Group at the SEC, which would study strategies to increase diversity on corporate boards.

 

“Because the truth is that making meaningful progress on board diversity is going to require a range of different policies in addition to the improved disclosures in this legislation.

 

“The Diversity Advisory Group at the SEC would continue to study these issues, and would continue to make recommendations of best policies for the future.

 

“I urge my colleagues to support this information, and to support this bill and support our amendment, and vote yes on H.R. 1187. Thank you and I yield back.”

 

Background

 

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 also urge corporations to develop strategies to achieve gender parity more quickly. These provisions are incorporated into the Corporate Governance Improvement and Investor Protection Act as part of the amendment.

 

The Improving Corporate Governance Through Diversity Act will:

 

  • Require public companies to annually disclose the voluntary, self-identified racial, ethnic, gender identity, and sexual orientation composition of their board members and executive officers in their annual proxy statement;
  • Empower SEC’s Office of Minority and Women Inclusion (OMWI) to publish triennially best practices for compliance with these enhanced disclosure rules; and
  • Establish a Diversity Advisory Group at the SEC to study and issue recommendations on strategies that can be used to increase diversity among board members.

 

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