SEC Faces Tough Task in Defining Board ‘Diversity’

The SEC staff is working on a recommendation that would require companies to disclose more information about the diversity of their director nominees, reports Bloomberg BNA. During a speech late last month, SEC Chair Mary Jo White said a 2009 rule requiring companies to disclose whether they consider diversity in choosing directors has not had much of an impact. Some observers say one of the primary defects of the rule is that it did not define “diversity.” Peter Gleason, president of the National Association of Corporate Directors, says the SEC has a tough task coming up with an effective rule because there are so many factors that go into diversity and it may be hard to put one dimension above another because it is so business-dependent. To settle on the “right recipe,” he concluded, SEC staffers may have to review corporate filings for disclosures that they consider especially good.

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