The proposed bill aims to make this data publicly available
Transparency has become a crucial element in achieving diversity, equity, and socially responsible corporate governance. This is the driving force behind the newly proposed bill, S. 636, according to a provision in the bill. The provision stated that companies often claim their commitment to diversity, equity, and inclusion (DEI), environmental goals, or other causes, but there is little data available to the public to verify these claims.
The proposed bill aims to make this data publicly available, creating an environment where companies can be held accountable for their claims. It will also provide consumers, employees, and investors with the necessary information to make informed decisions and deploy capital in line with their values.
This push for transparency related to corporate DEI efforts has recently received support from the US Securities and Exchange Commission (SEC). The SEC rejected Eli Lilly’s argument to exclude a DEI-related proposal from proxy material for an upcoming annual meeting. The proposal was submitted by shareholder As You Sow, an advocacy group based in Berkeley, California, and requests that Eli Lilly report to shareholders on the efficacy of the company’s DEI efforts, with metrics on hiring, retention, and promotions that include gender, race, and ethnicity data.
Many businesses are not required to share such data publicly, but private employers with 100 or more employees and federal contractors with 50 or more employees and contracts of $50,000 or more are required to annually report data about employee race, gender, and ethnicity by job category, according to the EEOC.
While there are no financial penalties for not filing the EEO-1 report, civil penalties can be severe, and employers should be aware of this. The EEOC is also considering reinstating a pay reporting requirement to the EEO-1.
In summary, the proposed bill, S. 636, highlights the importance of transparency in achieving diversity, equity, and socially responsible corporate governance. It aims to make necessary data publicly available to hold companies accountable and provide consumers, employees, and investors with the information to make informed decisions. The SEC’s recent support for transparency in corporate DEI efforts further emphasizes the importance of this issue.