March 19, 2021
Following a hearing on mandatory disclosure of D&I data, the Chair and a Subcommittee Chair of the House Financial Services Committee sent letters to 31 large investment managers, with over $400 billion in assets, including BlackRock and Vanguard, requesting board and workforce diversity data.
Accountability sought: In a press release on the letters, sent by Committee Chair Maxine Waters (D-CA) and Subcommittee on Diversity Chair Joyce Beatty (D-OH), Chair Waters decried the failure of investment managers to “prioritize diversity in their staffs and boards.” She stated the purpose of the letters was disclosure and “to make clear that these firms will be held publicly accountable.”
Adding teeth to Dodd-Frank. The Dodd-Frank Act required that financial regulators create diversity standards for their regulated entities, including the collection of diversity data, but none of the regulators mandated that firms disclose that data.
Data requested: The letters request the firms provide data from “2016 through the present” including:
Hearing lays groundwork for legislation, SEC action: The Subcommittee on Diversity and Inclusion hearing focused on legislation to mandate the disclosure of diversity by financial firms.
Outlook. The Financial Services Committee will hold a vote on legislation mandating diversity disclosure in the financial services industry, while the SEC is expected to consider broader ESG disclosures, including diversity, at some point after SEC Chair nominee Gary Gensler is confirmed.