Improving Corporate Governance Through Diversity Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 1018 To amend the Securities Exchange Act of 1934 to require the submission by issuers of data relating to diversity and for other purposes. IN THE HOUSE OF REPRESENTATIVES FEBRUARY 6, 2019 Mr. MEEKS (for himself and Ms. ADAMS) introduced the following bill; which was referred to the Committee on Financial Services 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. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Improving Corporate 4 Governance Through Diversity Act of 2019’’. 5 SEC. 2. SUBMISSION OF DATA RELATING TO DIVERSITY BY 6 ISSUERS. 7 Section 13 of the Securities Exchange Act of 1934 8 (15 U.S.C. 78m) is amended by adding at the end the 9 following: 10 VerDate Sep 11 2014 04:33 Feb 16, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H1018.IH H1018 kjohnson on DSK79L0C42 with BILLS 2 •HR 1018 IH ‘‘(s) SUBMISSION OF DATA RELATING TO DIVER- 1 SITY.— 2 ‘‘(1) DEFINITIONS.—In this subsection— 3 ‘‘(A) the term ‘executive officer’ has the 4 meaning given the term in section 230.501(f) of 5 title 17, Code of Federal Regulations, as in ef- 6 fect on the date of enactment of this subsection; 7 and 8 ‘‘(B) the term ‘veteran’ has the meaning 9 given the term in section 101 of title 38, United 10 States Code. 11 ‘‘(2) SUBMISSION OF DISCLOSURE.—Each 12 issuer required to file an annual report under sub- 13 section (a) shall disclose in any proxy statement and 14 any information statement relating to the election of 15 directors filed with the Commission the following: 16 ‘‘(A) Data, based on voluntary self-identi- 17 fication, on the racial, ethnic, and gender com- 18 position of— 19 ‘‘(i) the board of directors of the 20 issuer; 21 ‘‘(ii) nominees for the board of direc- 22 tors of the issuer; and 23 ‘‘(iii) the executive officers of the 24 issuer. 25 VerDate Sep 11 2014 04:33 Feb 16, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1018.IH H1018 kjohnson on DSK79L0C42 with BILLS 3 •HR 1018 IH ‘‘(B) The status of any member of the 1 board of directors of the issuer, any nominee 2 for the board of directors of the issuer, or any 3 executive officer of the issuer, based on vol- 4 untary self-identification, as a veteran. 5 ‘‘(C) Whether the board of directors of the 6 issuer, or any committee of that board of direc- 7 tors, has, as of the date on which the issuer 8 makes a disclosure under this paragraph, 9 adopted any policy, plan, or strategy to promote 10 racial, ethnic, and gender diversity among— 11 ‘‘(i) the board of directors of the 12 issuer; 13 ‘‘(ii) nominees for the board of direc- 14 tors of the issuer; or 15 ‘‘(iii) the executive officers of the 16 issuer. 17 ‘‘(3) ALTERNATIVE SUBMISSION.—In any 1- 18 year period in which an issuer required to file an an- 19 nual report under subsection (a) does not file with 20 the Commission a proxy statement relating to the 21 election of directors or an information statement, the 22 issuer shall disclose the information required under 23 paragraph (2) in the first annual report of issuer 24 VerDate Sep 11 2014 04:33 Feb 16, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H1018.IH H1018 kjohnson on DSK79L0C42 with BILLS 4 •HR 1018 IH that the issuer submits to the Commission after the 1 end of that 1-year period. 2 ‘‘(4) BEST PRACTICES.— 3 ‘‘(A) IN GENERAL.—The Director of the 4 Office of Minority and Women Inclusion of the 5 Commission shall, not later than the end of the 6 3-year period beginning on the date of the en- 7 actment of this subsection and every three 8 years thereafter, and in consultation with the 9 advisory council established pursuant to sub- 10 paragraph (C), publish best practices for com- 11 pliance with this subsection. 12 ‘‘(B) COMMENTS.—The Director of the Of- 13 fice of Minority and Women Inclusion of the 14 Commission may, pursuant to subchapter II of 15 chapter 5 of title 5, United States Code, solicit 16 public comments related to the best practices 17 published under subparagraph (A). 18 ‘‘(C) ADVISORY COMMITTEE.—The Direc- 19 tor of the Office of Minority and Women Inclu- 20 sion of the Commission shall, pursuant to the 21 Federal Advisory Committee Act, establish an 22 advisory council, that includes issuers and in- 23 VerDate Sep 11 2014 04:33 Feb 16, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H1018.IH H1018 kjohnson on DSK79L0C42 with BILLS 5 •HR 1018 IH vestors, to advise on the best practices pub- 1 lished under subparagraph (A).’’. 2 Æ VerDate Sep 11 2014 04:33 Feb 16, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6301 E:\BILLS\H1018.IH H1018 kjohnson on DSK79L0C42 with BILLS