I’m sure it’s been used before but when I ran across two privacy-related arguments against board diversity disclosure in the space of a couple of days, they caught my eye. Apparently, some folks think “tell us a little about yourself” is asking for too much information from public company board members.
The first instance was in an article about Illinois legislature’s attempts to pass legislation requiring at least one female and one African-American among the board members of corporations headquartered in the state and traded on a major exchange by 2020.
The legislation (HB 3394) was eventually watered down to only require reporting on board diversity, but even then at least one senator found cause to question the reporting requirement. State Senator Dale Righter questioned the legality of asking board members for their race and gender in order to report the data, calling the effort an “unwarranted intrusion into the private sector.”
The second instance was a quote from SEC Commissioner Hester Peirce, at a Council of Institutional Investors conference in March of this year during discussions regarding investor efforts to hold companies accountable for their board diversity.
Ms. Peirce expressed her concern that the pressure to increase board diversity would be asking “board members and nominees to divulge, and agree to have divulged publicly — to the whole world — personal details that they might want to keep private or to a smaller subset of people.”
While I wasn’t privy to that conversation, most diversity disclosure requests are looking for aggregate data, not individual detail. Granted a board is a pretty small dataset, and most of us who track data on board and executive data can generally use information that is provided (or obvious from the pictures) to generate board profiles. I suppose there’s a line we could cross at some point in terms of personal characteristics that someone might not want to disclose, but we’re not there yet - not even close.
Public companies - those that seek the financial investment from individuals and institutions - do so with certain obligations, not the least of which is to provide information regarding who’s leading the organization. Investors (and other stakeholders) have a right to know what perspectives, experiences, and backgrounds are represented on the board.
And individuals who want to serve on a public company board shouldn’t be surprised or offended when requests for basic demographic information come with the job.
Tags: Women on Boards