Disclosure of boardroom diversity in the US needs to be improved, according to the head of the country’s financial watchdog.
Securities and Exchange Commission chairman, Mary Jo White, said: “Our overall challenge is to refocus the lens of disclosure to better serve today’s investors.”
White was speaking at a conference of the International Corporate Governance Network in San Francisco.
During the course of her speech she addressed three main issues, among them board diversity and sustainability reporting.
She said: “As a former member of a public company board and its audit committee, I have seen first-hand what the research is telling us — boards with diverse members function better and are correlated with better company performance.
“This is precisely why investors have—and should have—an interest in diversity disclosure about board members and nominees.”
The number of “minority” directors on boards in the top 200 companies of the S&P500 had “stagnated” at 15% over the past few years, said White, while the percentage of boards with at least one minority member had declined from 90% in 2005 to 86% in 2015.
White described US progress on diversity as “unacceptable”.
In 2009 the SEC issued a rule demanding companies disclose how nominating committees consider diversity.
But the SEC is now set to change tack. White said that staff are to “propose amending the rule to require companies to include in their proxy statements more meaningful board diversity disclosures on their board members and nominees where that information is voluntarily self-reported by directors”.
White also called on investors to influence companies on sustainability issues.
“I urge investors who are seeking to alter corporate behaviour on sustainability to continue to use your stewardship and influence to bring about the strategic, supply chain and business model changes you think need to be made by companies to address the underlying risks and priorities,” she said.