Diversity in Corporate Leadership Act of 2020

II 116TH CONGRESS 2D SESSION S. 3367 To require the Securities and Exchange Commission to establish a Diversity Advisory Group to study and make recommendations on strategies to increase gender, racial, and ethnic diversity among the members of the board of directors of issuers, to amend the Securities Exchange Act of 1934 to require issuers to make disclosures to shareholders with respect to gender, racial, and ethnic diversity, and for other purposes. IN THE SENATE OF THE UNITED STATES MARCH 2, 2020 Ms. CORTEZ MASTO (for herself, Ms. SMITH, Mr. VAN HOLLEN, Mrs. FEIN- STEIN, Ms. DUCKWORTH, Ms. ROSEN, and Ms. KLOBUCHAR) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL To require the Securities and Exchange Commission to estab- lish a Diversity Advisory Group to study and make rec- ommendations on strategies to increase gender, racial, and ethnic diversity among the members of the board of directors of issuers, to amend the Securities Exchange Act of 1934 to require issuers to make disclosures to shareholders with respect to gender, racial, and ethnic 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 VerDate Sep 11 2014 02:23 Mar 03, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S3367.IS S3367 pamtmann on DSKBC07HB2PROD with BILLS 2 •S 3367 IS SECTION 1. SHORT TITLE. 1 This Act may be cited as the ‘‘Diversity in Corporate 2 Leadership Act of 2020’’. 3 SEC. 2. DIVERSITY STUDY AND DISCLOSURES. 4 (a) DEFINITIONS.—In this section— 5 (1) the term ‘‘Advisory Group’’ means the Di- 6 versity Advisory Group established under subsection 7 (b); 8 (2) the term ‘‘Commission’’ means the Securi- 9 ties and Exchange Commission; and 10 (3) the term ‘‘issuer’’ has the meaning given 11 the term in section 3 of the Securities Exchange Act 12 of 1934 (15 U.S.C. 78c). 13 (b) DIVERSITY ADVISORY GROUP.— 14 (1) ESTABLISHMENT.—The Commission shall 15 establish a Diversity Advisory Group, which shall be 16 composed of representatives from the Federal Gov- 17 ernment, academia, and the private sector. 18 (2) STUDY AND RECOMMENDATIONS.—The Ad- 19 visory Group shall— 20 (A) carry out a study on strategies to in- 21 crease gender, racial, and ethnic diversity 22 among the members of the board of directors of 23 issuers; and 24 (B) not later than 9 months after the es- 25 tablishment of the Advisory Group, issue a re- 26 VerDate Sep 11 2014 02:23 Mar 03, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S3367.IS S3367 pamtmann on DSKBC07HB2PROD with BILLS 3 •S 3367 IS port to the Commission, the Committee on 1 Banking, Housing, and Urban Affairs of the 2 Senate, and the Committee on Financial Serv- 3 ices of the House of Representatives containing 4 the findings and determinations made in car- 5 rying out the study under subparagraph (A), 6 along with recommendations to increase gender, 7 racial, and ethnic diversity among the members 8 of the board of directors of issuers. 9 (3) ANNUAL REPORT.—Not later than 1 year 10 after the date on which the Advisory Group issues 11 the report under paragraph (2)(B), and annually 12 thereafter, the Commission shall issue a report to 13 the Committee on Banking, Housing, and Urban Af- 14 fairs of the Senate and the Committee on Financial 15 Services of the House of Representatives on the sta- 16 tus of gender, racial, and ethnic diversity among the 17 members of the board of directors of issuers. 18 (4) PUBLIC AVAILABILITY OF REPORTS.—The 19 Commission shall make all reports of the Advisory 20 Group available to issuers and the public, including 21 on the website of the Commission. 22 (c) DISCLOSURES.—The Securities Exchange Act of 23 1934 (15 U.S.C. 78a et seq.) is amended by inserting after 24 section 14B the following: 25 VerDate Sep 11 2014 02:23 Mar 03, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S3367.IS S3367 pamtmann on DSKBC07HB2PROD with BILLS 4 •S 3367 IS ‘‘SEC. 14C. DIVERSITY DISCLOSURES. 1 ‘‘The Commission shall, by rule, require each issuer 2 to disclose, in any proxy or consent solicitation material 3 for an annual meeting of the shareholders of the issuer, 4 the gender, racial, and ethnic composition of the board of 5 directors of the issuer and nominees for the board of direc- 6 tors.’’. 7 Æ VerDate Sep 11 2014 02:23 Mar 03, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\S3367.IS S3367 pamtmann on DSKBC07HB2PROD with BILLS