House Democrats to Push for More Diversity in Top Corporate Ranks

California Democrat Maxine Waters {snip} is planning to use her new power to push for more women and minorities in the top ranks of corporate America.

Some firms are panicking at the prospect of new public scrutiny, according to lobbyists, who say that while companies won’t openly fight Democrats’ moves to promote diversity, many are uneasy about the prospect of government getting directly involved in their hiring decisions.

Lawmakers say they’re hoping to make them uncomfortable.

“They have a right to be nervous,” said Rep. Emanuel Cleaver (D-Mo.), a member of the financial services panel. “They should feel the fire is getting started and will burn, at least for two years, and hopefully beyond.”

Lobbyists privately admit that some firms have been slow to improve and that nudging from Congress may be what’s needed to force them to act.

Corporations and industrym {snip} including Amazon and the Bank Policy Institute, have even recently hired staff from the Congressional Black Caucus to build relationships as Democrats take over.

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“Now companies are focused like a laser on identifying top African-American talent with Congressional Black Caucus relationships to help them understand and mitigate the striking lack of diversity within their corporations,” the person said.

Waters has proposed creating a subcommittee focused on diversity and inclusion. Senior members of her committee are preparing to introduce bills to force companies to disclose the gender and racial makeup of their boards. That’s just one example of how Democrats taking charge of the House are expected to bring new pressure on companies from Wall Street to Silicon Valley to diversify their leadership.

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Cleaver said Wells Fargo was among the firms trying to connect with him on the issue. The bank declined to comment.

The Congressional Black Caucus has started an initiative to increase diversity in the tech industry as well, and Waters has been part of it. She and black caucus members have traveled to Silicon Valley to meet with tech executives, including the CEOs of Airbnb and Twitter.

A 2017 Government Accountability Office report commissioned by Waters, Sen. Sherrod Brown (D-Ohio) and Rep. Al Green (D-Texas) found that overall representation of minorities in management positions of the financial services industry increased to 21 percent in 2015 from 17 percent in 2007 but that it decreased for African-Americans and was generally unchanged for women.

Another study by Deloitte and the Alliance for Board Diversity found that in 2016 white men held 69 percent of the board seats at Fortune 500 companies. White women held 16 percent, minority men held 11 percent and minority women 4 percent.

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Senior Democrats on the Financial Services Committee are preparing to introduce bills designed to push corporate America to act. Some of the proposals have already sparked opposition from conservative activists.

Rep. Carolyn Maloney, a New York Democrat who will likely chair an influential subcommittee overseeing markets and the Securities and Exchange Commission, plans to reintroduce legislation that would require public companies to disclose the gender composition of their boards. The measure would also require the SEC to set up an advisory group on gender diversity.

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Rep. Gregory Meeks, another New York Democrat who will also likely chair a subcommittee with oversight of banks and their regulators, has legislation that would require public companies to disclose to investors the gender, race and ethnicity of their board members.

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The U.S. Chamber of Commerce says it is open to some of the legislative proposals.

The Chamber has already endorsed Maloney’s gender diversity bill, which the conservative Americans for Tax Reform described as “nothing more than an attempt to open the door for government involvement in the social responsibility of private enterprise.”

The Chamber is weighing Meeks’ proposal, as well, even as it pushes to fend off corporate disclosure requirements in other areas.

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