US business lobbies press for laws on boardroom diversity

A group of US business associations has called on the Senate to ratify legislation on boardroom diversity that was passed by the other chamber last year.

In an open letter to Mike Crapo, chairman of the committee on banking, housing, and Sherrod Brown, the committee’s ranking member, the group urged the passing of “H.R. 5084, the ‘Improving Corporate Governance through Diversity Act of 2019,’ which the House of Representatives passed in a strong bi-partisan vote in November 2019”.

The signatories of the group represent some of the US’s largest companies and sectors. They include American Bankers Association, National Association of Investment Companies, Retail Industry Leaders Association and The Real Estate Roundtable.

“Our associations and members support efforts to increase gender, racial, and ethnic diversity on corporate boards of directors, as diversity has become increasingly important to institutional investors, pension funds, and other stakeholders,” the letter said.

It cited a range of figures from PwC’s Annual Corporate Directors Survey, which found 94% of board directors thought a diverse board brought unique perspectives, with a further 87% saying diversity enhanced board performance.

“The ‘Improving Corporate Governance through Diversity Act of 2019’ would establish a model to organically boost diversity on boards through disclosure,” the letter said.

The PwC survey found 84% said board diversity improved relationships with investors, with 76% of directors agreeing it enhanced company performance.

In its letter, the group added that the legislation would also “establish an advisory group that would carry out a study and provide recommendations on private sector strategies to increase gender, racial and ethnic diversity among boards of directors”, a welcome move to those fighting for better representation of gender and minorities in US business.

There has been no official response issued by Crapo, Brown or the committee.