Rep. Carolyn B. Maloney (D-NY), chair of the House Committee on Financial Services Subcommittee on Investor Protection, Entrepreneurship and Capital Markets, introduced legislation designed to ensure investors and the public have information regarding the gender, racial, and ethnic diversity of corporate boards.
The Diversity in Corporate Leadership Act of 2019 requires public companies to disclose the gender, racial, and ethnic composition of their boards of directors every year in their proxy statements sent to shareholders and investors.
“I strongly believe that by requiring companies to take a real look at the gender, racial and ethnic makeup of their boards, we will create incentives and inspire change so that these boards better resemble the American public at large,” Maloney said. “By disclosing this information to investors, we are also empowering shareholders to support companies that embody their ideals and pull investment from those that don’t.”
Maloney said increased diversity also makes financial sense in addition to making moral and common sense.
“Studies have repeatedly found that companies with more diverse leadership are better positioned to succeed,” she said. “Why wouldn’t companies want to show off that they’re making smart financial decisions by moving towards more diversity and equality on their boards?”