Business Coalition Urges Senate to Pass Corporate Diversity Legislation
The Real Estate Roundtable and 16 other national organizations sent a letter on July 27 urging leaders of the Senate Banking Committee to advance legislation that would require public companies to report the racial, ethnic and gender composition of their boards and executive officers. (The Hill and coalition letter, July 27) [Photo above: Senate Banking Committee Chair Mike Crapo (R-ID), left, talks with Committee Ranking Democrat Sherrod Brown of Ohio.]
- The Improving Corporate Governance Through Diversity Act of 2019 (H.R. 5084), championed by Rep. Gregory Meeks (D-NY), passed the House by bipartisan vote last November. (Rep. Meeks news release) The coalition’s letter encourages the Senate Banking Committee to consider a companion bill (S. 360) sponsored by Sen. Robert Menendez (D-NJ).
- The act would require issuers that must register under the Securities Exchange Act of 1934 to provide data regarding diversity on corporate boards and in executive management. Such diversity reporting would occur in annual reports and proxy statements regarding election of directors filed with the Securities and Exchange Commission (SEC).
- The bill would also require securities issuers to disclose whether it has adopted a plan or strategy to promote board- and executive-level racial, ethnic, gender, and veteran-status diversity.
- The coalition letter addressed to the Senate Committee’s Chairman Mike Crapo (R-ID) and Ranking Member Sherrod Brown (D-OH), cites a 2019 PwC Annual Corporate Directors Survey to show the benefits of diversity. The survey results show that 94% of participating board directors indicated that a diverse board brings unique perspectives; 87% responded that diversity enhances board performance; and 84% responded that it improves relationships with investors.
- Other signatories on the coalition letter include Nareit, International Council of Shopping Centers (ICSC), American Bankers Association, and the U.S. Black Chambers, Inc.
- There is a growing interest among policymakers regarding environmental, social, and governance (ESG) reporting by public companies. In July 2019, the House Financial Services Subcommittee on Investor Protection, Entrepreneurship, and Capital Markets held a hearing on “Building a Sustainable and Competitive Economy: An Examination of Proposals to Improve Environmental, Social and Governance (ESG) Disclosures.” (Roundtable Weekly, August 9, 2019).
- Presumptive Democratic Presidential Nominee Joe Biden this week presented a series of proposals intended to address racial economic inequality. Biden said that as president, his future appointments to the Federal Reserve would be “diverse nominees for the Board of Governors and the regional Federal Reserve Banks.” (The Wall Street Journal, and The New York Times, July 29)
- Last week the Biden campaign indicated its desire to eliminate several current law tax provisions, including like-kind exchanges under Section 1031, to pay for a 10-year, $775 billion “caregivers” proposal.
Roundtable President and CEO Jeffrey DeBoer responded, "The long-standing like-kind exchange tax law has encouraged investment in affordable housing and other properties, generated state and local tax revenue, and spurred new jobs through labor-intensive property improvement. As a result, exchanges allow cash-strapped minority, women, and veteran-owned businesses to grow their business by temporarily deferring tax on the reinvested proceeds.” (Entire Roundtable Statement on like-kind exchanges, July 21 and Roundtable Weekly, July 24).
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