On November 19, 2019, the House passed the Improving Corporate Governance Through Diversity Act of 2019, H.R. 5084 (the “Diversity Act”), a bill requiring publicly traded companies to disclose, in their annual proxy statements filed with the SEC, the racial, ethnic and gender composition of their boards of directors, director nominees and executive officers, along with data on those who have self-identified as veterans. The bill, introduced by Democratic United States Representatives Gregory Meeks and Carolyn Maloney of New York, also requires issuers to disclose whether they have adopted any policy, plan or strategy to promote racial, ethnic and gender diversity among directors and officers. Finally, the Diversity Act directs the Office of Minority and Women Inclusion at the SEC to establish a Diversity Advisory Group, which would be comprised of individuals from the public and private sector, to advise on best practices to promote diversity.
Following the passage of the legislation, Rep. Meeks stated “[b]ringing diversity to the highest levels of corporate governance will make companies more accountable to the public and to the economy, and improve their financial performance, as studies have shown.” Although the Diversity Act appears to have garnered bi-partisan support in the House, it may face a tougher time before the Republican majority Senate. The Diversity Act can be found here.
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About Nina Varindani
Nina Varindani is a Partner in Faruqi & Faruqi, LLP's New York office and focuses her practice on securities litigation and shareholder derivative litigation, representing investors in federal and state class action and derivative lawsuits, books and records demands and litigation demands.