House Financial Services Committee Advances Dual Board Diversity Bills with Bipartisan Support

July 12, 2019

Large bipartisan majorities in the House Financial Services Committee sent two board diversity disclosure bills and a "Rooney Rule" for Federal Reserve Banks to the full House, indicating strong support for the initiatives from both sides of the aisle.

Both bills earned strong praise from members of both slides of the aisle with Diversity and Inclusion Subcommittee Chair Rep. Joyce Beatty (D-OH) stating that “leaders set the tone” and that her conversations with companies have revealed many companies with non-existent diversity and “no plan to get there,” prompting legislative initiatives.

Beatty noted that both diversity disclosure bills could be enacted into law without conflicting with each other:

  • Improving Corporate Governance through Diversity Act of 2019:  Introduced earlier this year by Rep. Gregory Meeks (D-NY), H.R. 1018 would require companies to disclose the gender, racial, and ethnic diversity characteristics as well as veteran status of board members, board nominees, and Section 16 officers.  The bill also establishes an SEC committee to examine diversity issues.  The bill passed the committee on a 56 to 2 vote.

  • Diversity in Corporate Leadership Act of 2019:  Introduced in late June by Rep. Carolyn Maloney (D-NY), H.R. 3279 would require companies to disclose the gender, racial, and ethnic diversity characteristics of board members and board nominees.  Section 16 officers are not included.  Similar, but not identical to the H.R. 1080, Maloney’s bill also establishes an SEC committee to examine diversity issues.  The bill passed the committee on a 52 to 6 vote.

But supportive GOP seeks single board diversity bill:  Given the strong similarities between both board diversity bills, Rep. Andy Barr (R-KY) urged the committee to condense the “duplicative and inconsistent legislation” into a single bill.

Bill requiring Rooney Rule for Federal Reserve presidents also passes:  Introduced by Chair Beatty, the Ensuring Diverse Leadership Act of 2019 (H.R. 281), would require Federal Reserve banks to include a gender diverse candidate and a racially/ethnically diverse candidate when interviewing for the position of regional bank president.  The bill is similar to the National Football League's "Rooney Rule" which requires teams to interview a diverse candidate when selecting a head coach.  The bill passed by a 56 to 2 vote.

Bills likely to be addressed in the House soon—Senate unclear:  With Democrats owning a majority along with bipartisan support, the House is likely to take up all three diversity bills soon.