Legislation requiring public companies to disclose information about the diversity of their corporate boards and senior management was introduced Tuesday in the Senate by Sen. Bob Menendez, D-N.J., the highest ranking Latino in Congress.
The proposed Improving Corporate Governance Through Diversity Act of 2020 would revise Securities and Exchange Commission rules on diversity disclosure to require that companies disclose racial, gender, ethnic makeup and veteran status of their boards and senior management.
"For too long corporate America has fallen short in racial, ethnic and gender diversity. Without greater diversity in top corporate positions, the U.S. will fail to compete with other leading economies and stall our nation's progress towards full inclusivity," Mr. Menendez said in a statement. "It's time corporate boardrooms mirror the rich diversity of our country," he said.
The legislation has strong support, including from the U.S. Chamber of Commerce.
"Diversity has become increasingly important for good corporate governance," Tom Quaadman, executive vice president of its Center for Capital Markets Competitiveness, said in a separate statement. The proposed legislation would offer a model "to organically boost diversity on boards through disclosure, rather than the counterproductive quota-driven strategies that some have attempted," he said.
Companion legislation is expected be introduced shortly in the House by Rep. Gregory Meeks, D-N.Y.