Queens Congressmen back amendment requiring state-owned companies to disclose racial and gender makeup of their boards
June 21, 2021 By Ryan Songalia
A legislative package that would require state-owned companies to disclose social, environmental and governance measures to investors was passed last Wednesday by the US House of Representatives.
The Improved Corporate Governance and Investor Protection Act adopted partisan lines – 215 to 214 – although four Democrats voted against the bill. All of the Queens congressional representatives voted in favor of the bill.
The package includes an amendment – sponsored by Queens Representative Gregory Meeks and co-sponsored by Carolyn Maloney – that would require state-owned companies to disclose the racial, ethnic and gender makeup of board members and officers.
The Better Corporate Governance Through Diversity Act, as the amendment is known, would also require the Securities and Exchange Commission to establish a diversity advisory group, which would conduct studies to identify strategies to increase racial, gender and ethnic diversity on boards.
The report would be submitted annually to the Senate Banking, Housing and Urban Affairs Committee and the House of Representatives Financial Services Committee.
The SEC’s Office for Minority and Women’s Inclusion would also publish best practices for complying with the new disclosure rules three times a year, under the bill.
Maloney said she was inspired to act after a 2016 Government Accountability Office report showed women make up just 16% of leadership positions. She said the number needs to increase and businesses will benefit.
“Increasing diversity on boards is not just a moral issue – it’s also good for business,” Maloney said last Wednesday in a speech to the House.
“Study after study has shown that companies with more diversity on their boards have better financial results,” she said.
One of the other amendments to the bill, the Climate Risk Disclosure Act, was praised by Representative Alexandria Ocasio-Cortez for requiring state-owned companies to disclose their impact on climate change. The bill also requires the SEC to establish industry-specific climate standards for public companies.
Congressman Jim Hagedorn, a Republican from Minnesota, called the package an “attempt to [Speaker Nancy Pelosi] and House Democrats to bring the culture of cancellation into boardrooms and advance their far-left social agenda. “
A companion bill to the Meeks Amendment is in the US Senate and is sponsored by Senator Robert Menendez of New Jersey and co-sponsored by Senator Kirsten Gillibrand of New York. This bill was introduced on February 23 but was not put to a vote.