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HR 5084 - Improving Corporate Governance Through Diversity Act of 2019 - National Key Vote

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Title: Improving Corporate Governance Through Diversity Act of 2019

Vote Smart's Synopsis:

Vote to pass a bill that requires companies to disclose the racial, ethnic, and gender composition of their boards of directors and executive officers, and requires the disclosure of plans to improve diversity among these groups.

Highlights:

  • Requires each issuer required to file an annual report to the Securities and Exchange Commission (SEC) to disclose the following information in any proxy or information statement relating to the election of directors filed with the SEC (Sec. 2):

    • Data, based on voluntary self-identification, on the racial, ethnic, and gender composition of:

      • The board of directors;

      • Nominees for the board of directors; and 

      • The executive officers.

    • The status of any member of the board of directors, any nominee or the board of directors, or any executive officer, based on voluntary self-identification, as a veteran;

    • Whether the board of directors or any committee of that board of directors has, as of the date on which the issuer makes a disclosure, adopted any policy, plan, or strategy to promote racial, ethnic, and gender diversity among:

      • The board of directors;

      • Nominees for the board of directors; or 

      • The executive officers.

  • Specifies that in any 1 year period in which an issuer required to file an annual report does not file a proxy or information statement with the SEC relating to the election of directors, the issuer must disclose the information required in the first annual report submitted to the SEC after the end of that 1-year period (Sec. 2).

  • Requires the Director of the Office of Minority and Women Inclusion of the SEC to publish best practices for compliance with this act, no later than the end of the 3-year period beginning on this bill’s date of enactment, and every 3 years thereafter (Sec. 2).

  • Requires the SEC to establish a Diversity Advisory Group which will be composed of representatives from the government, academia, and the private sector (Sec. 3).

  • Requires the Advisory Group to (Sec. 3):

    • Carry out a study that identifies strategies that can be used to increase gender, racial, and ethnic diversity among members of boards of directors of issuers; and

    • Submit a report to the SEC, the House Financial Services Committee, and the Senate Banking, Housing, and Urban Affairs Committee no later than 9 months after the Advisory Group’s establishment that:

      • Describes any findings from the study; and 

      • Makes recommendations of strategies that issuers could use to increase gender, racial, and ethnic diversity among board members.

  • Specifies that the term “issuer” means any person who issues or proposes to issue any security, who performs the acts and duties of depositor or manager pursuant to the provisions of a trust or other agreement under which such securities are issued, as defined in the Securities and Exchange Act of 1934 (Sec. 3).

Title: Improving Corporate Governance Through Diversity Act of 2019

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