Improving Corporate Governance Through Diversity Act of 2023

Bill: 118-s-2007
Sponsor: full_name: Sen. Menendez, Robert [D-NJ]
Introduced: 2023-06-15
Policy area: Finance and Financial Sector
Latest action: action_date: 2023-06-15
text: Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.

Summaries:
action_date: 2023-06-15
action_desc: Introduced in Senate
text: <p><b>Improving Corporate Governance Through Diversity Act of 2023</b></p> <p>This bill requires certain issuers of securities&nbsp;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.</p> <p>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.</p>

tv_txt: II 118th CONGRESS 1st Session S. 2007 IN THE SENATE OF THE UNITED STATES June 15, 2023 Mr. Menendez (for himself, Ms. Cortez Masto , Ms. Hirono , Ms. Smith , Ms. Warren , Mr. Booker , Mr. Warnock , Mr. Brown , Mr. Van Hollen , and Mr. Padilla ) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL To amend the Securities Exchange Act of 1934 to require the submission by issuers of data relating to diversity, and for other purposes.

1. Short title This Act may be cited as the Improving Corporate Governance Through Diversity Act of 2023 . 2. Submission of data relating to diversity by issuers Section 13 of the Securities Exchange Act of 1934 ( 15 U.S.C. 78m ) is amended by adding at the end the following: (t) Submission of data relating to diversity (1) Definitions In this subsection— (A) the term executive officer has the meaning given the term in section 230.501(f) of title 17, Code of Federal Regulations, as in effect on the date of enactment of this subsection; and (B) the term veteran has the meaning given the term in section 101 of title 38, United States Code. (2) Submission of disclosure Each issuer required to file an annual report under subsection (a) shall disclose in any proxy statement and any information statement relating to the election of directors filed with the Commission the following: (A) Data, based on voluntary self-identification, on the racial, ethnic, and gender composition of— (i) the board of directors of the issuer; (ii) nominees for the board of directors of the issuer; and (iii) the executive officers of the issuer. (B) The status of any member of the board of directors of the issuer, any nominee for the board of directors of the issuer, or any executive officer of the issuer, based on voluntary self-identification, as a veteran. (C) Whether the board of directors of the issuer, or any committee of that board of directors, has, as of the date on which the issuer makes a disclosure under this paragraph, adopted any policy, plan, or strategy to promote racial, ethnic, and gender diversity among— (i) the board of directors of the issuer; (ii) nominees for the board of directors of the issuer; or (iii) the executive officers of the issuer. (3) Alternative submission In any 1-year period in which an issuer required to file an annual report under subsection (a) does not file with the Commission a proxy statement or an information statement relating to the election of directors, the issuer shall disclose the information required under paragraph (2) in the first annual report of issuer that the issuer submits to the Commission after the end of that 1-year period. (4) Annual report Not later than 18 months after the date of enactment of this subsection, and annually thereafter, the Commission shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives, and publish on the website of the Commission, a report that analyzes the information disclosed under paragraphs (2) and (3) and identifies any trends with respect to such information. (5) Best practices (A) In general The Director of the Office of Minority and Women Inclusion of the Commission shall, not later than 3 years after the date of enactment of this subsection, and every 3 years thereafter, publish best practices for compliance with this subsection. (B) Comments The Director of the Office of Minority and Women Inclusion of the Commission may, pursuant to subchapter II of chapter 5 of title 5, United States Code, solicit public comments related to the best practices published under subparagraph (A). . 3. Diversity advisory group (a) Definitions For the purposes of this section: (1) Advisory Group The term Advisory Group means the Diversity Advisory Group established under subsection (b). (2) Commission The term Commission means the Securities and Exchange Commission. (3) Issuer The term issuer has the meaning given the term in section 3(a) of the Securities Exchange Act of 1934 ( 15 U.S.C. 78c(a) ). (b) Establishment The Commission shall establish a Diversity Advisory Group, which shall be composed of representatives from— (1) the Federal Government and State and local governments; (2) academia; and (3) the private sector. (c) Study and recommendations The Advisory Group shall— (1) 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 (2) not later than 270 days after the date on which the Advisory Group is established, submit to the Commission, the Committee on Banking, Housing, and Urban Affairs of the Senate, and the Committee on Financial Services of the House of Representatives a report that— (A) describes any findings from the study conducted under paragraph (1); and (B) makes recommendations regarding strategies that issuers could use to increase gender, racial, and ethnic diversity among board members. (d) Annual report Not later than 1 year after the date on which the Advisory Group submits the report required under subsection (c)(2), and annually thereafter, the Commission shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives a report that describes the status of gender, racial, and ethnic diversity among members of the boards of directors of issuers. (e) Public availability of reports The Commission shall make all reports of the Advisory Group available to issuers and the public, including on the website of the Commission. (f) Inapplicability of certain provisions Chapter 10 of title 5, United States Code, shall not apply with respect to the Advisory Group or the activities of the Advisory Group.