Improving Corporate Governance Through Diversity Act of 2021

Improving Corporate Governance Through Diversity Act of 2021

This bill requires certain issuers of securities to disclose the racial, ethnic, and gender composition of their boards of directors and executive officers, as well as the status of any of those directors and officers as a veteran. It also requires the disclosure of any plan to promote racial, ethnic, and gender diversity among these groups.

The Securities and Exchange Commission must establish a Diversity Advisory Group to report on strategies to increase gender, racial, and ethnic diversity among board members.

Bill 117 HR 1277, also known as the Improving Corporate Governance Through Diversity Act of 2021, aims to promote diversity within corporate boards of directors. The bill requires public companies to disclose information about the gender, racial, and ethnic diversity of their board members and nominees. This information would be included in annual reports filed with the Securities and Exchange Commission (SEC).

The bill also requires the SEC to establish a Diversity Advisory Group, which would be responsible for studying and making recommendations on strategies to increase diversity within corporate boards. The group would consist of experts in corporate governance, diversity, and inclusion.

Supporters of the bill argue that increasing diversity within corporate boards can lead to better decision-making, improved company performance, and increased shareholder value. They believe that by requiring companies to disclose information about their board diversity, it will encourage companies to prioritize diversity and inclusion in their leadership. Opponents of the bill argue that it is unnecessary government intervention in private business practices and that companies should be able to make their own decisions about board composition. They also raise concerns about the potential costs and administrative burdens of complying with the new disclosure requirements. Overall, the Improving Corporate Governance Through Diversity Act of 2021 seeks to address the lack of diversity within corporate boards and promote greater transparency and accountability in corporate governance. It remains to be seen how the bill will be received by Congress and whether it will ultimately become law.