A group of congressional Democrats are calling on Securities and Exchange Commission Chair Mary Jo White to act on a proposal requiring corporate boards disclose “gender, racial and ethnic diversity” of their nominees.
In a letter written by Senate Committee on Banking, Housing, and Urban Affairs Ranking Member [crscore]Sherrod Brown[/crscore] and House Finance Committee Ranking Member [crscore]Maxine Waters[/crscore] Wednesday, the lawmakers said while they applaud the agency for agreeing to review the proposed amendment, they are not satisfied with amount of time it has taken. A group of pension funds, including the Ohio Public Employees Retirement Systems, petitioned the SEC on the issue just under a year ago.
“Investment advisors, shareholders, policymakers, and other stakeholders have been telling the SEC and others for decades now that the diversity characteristics of board nominees and directors is information they need to make informed investment and voting decisions,” they wrote in the letter, which was signed by an additional eight members of Congress. “Similarly, stakeholders have been explaining for decades that enhanced diversity disclosures may promote sociodemographic diversity on corporate boards, which in turn may promote better business strategy and corporate results.”
The lawmakers argued a 2009 diversity rule does not go far enough, as it doesn’t clearly define diversity and allows companies to disclose in a number of different ways.
“These disclosures could be improved, as OPERS explains, by also requiring a chart or matrix that visually depicts the company’s approach to director qualifications and skills,” the letter reads. “Such a requirement, with minimal burden and cost on companies, would aid in everyone’s understanding, including the SEC’s understanding, of each company’s approach.”
The lawmakers urged the agency to move quickly on seeking public comment on the proposal.
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