Every day, it seems, brings more news about the battle for women to have an equal position to men in corporate America. Just this week, massive online retailer and Web services firm Amazon (AMZN - Get Report) reversed course in its opposition to a shareholder resolution that would commit the company to pay equity for women. It's 2016 and paying men and women the same for a day's work is still, puzzlingly, an issue.
Perhaps that's because women are still restricted from and, in some cases, completely shut out of the highest echelons of power in the country's biggest companies.
Women are still severely underrepresented in corporate boardrooms across America. While progress has been made on the issue with more women in S&P 500 boardrooms than ever before, one congresswoman is taking action to speed up the process.
U.S. Representative Carolyn Maloney, a Democrat from New York, recently introduced the Gender Diversity in Corporate Leadership Act (H.R. 4718) in the U.S. House of Representatives. The legislation would require the Securities and Exchange Commission to establish a gender diversity advisory group to study and make recommendations on strategies to increase gender diversity on corporate boards and amend the Securities Exchange Act of 1934 to require publicly traded companies to make disclosures to shareholders with respect to gender diversity.
Though less than a month old, the proposed legislation has already received quite a bit of support. Representatives Donald Beyer of Virginia and Debbie Dingell of Michigan, both Democrats, are co-sponsors of the legislation. And just days after the bill was introduced, the U.S. Chamber of Commerce wrote a letter offering its support.
"We've been trying to partner up with other business leaders to try to create some different organic ways to get more qualified women on boards," said Tom Quaadman, senior vice president of the U.S. Chamber of Commerce's Center for Capital Markets, in a phone interview with TheStreet. "When Congresswoman Maloney introduced her bill ... it's something that we were very supportive of."
We reached out to Representative Maloney to learn more about the Gender Diversity in Corporate Leadership Act and why getting more women into the boardroom sooner rather than later matters. Here's what she had to say, via email.
TheStreet: What prompted you to introduce the Gender Diversity in Corporate Leadership Act? Why this, and why now?
Carolyn Maloney: I asked the GAO [Government Accountability Office] to do an analysis of women on corporate boards and the results, which came out this January, shocked me. Women hold just 16% of seats in the boardroom, and even if the rate of women joining corporate boards doubled, so they were named at the same rate as men, it would still take at least 40 years (until 2056) for women to reach parity. It's in the public interest to have more diverse and representative boards of directors and my bill is intended to help correct this problem.
TST: It appears that the SEC is receiving more appeals for it to force companies to reveal more information about inequality. Public firms will soon have to disclose CEO pay ratios, and the SEC has received a petition to disclose gender pay ratios. Why should this matter to the SEC and to investors?
CM: Investors know that having more diverse boards and corporate executives leads to better company performance. Investors, as well as the SEC, also know that to overcome issues like the gender pay gap, which are a major drag on our economy and which lead to long-term inequality, we need to make sure there are more opportunities to for women to rise through the ranks of corporate America In my discussions with business leaders, it's crystal clear that boards and executives set the tone for companies, and we should make sure that women are in these positions to contribute.
TST: What sort of reception have you received for the proposed act, beyond the Chamber of Commerce? What sort of support have you received? What about opposition?
CM: I've been very pleased by the support I've received so far. In addition to the U.S. Chamber of Commerce, my legislation has been endorsed by several local chambers of commerce, the National Women's Law Center, and groups like Catalyst that share the goal of getting more women on boards and in senior executive positions. I don't think anyone can really be opposed to a bill that calls for information, that is already public, about company's board of directors to be easier to access. What will be telling is who doesn't support this bill, because this is something that should be very easy for companies to comply with.
TST: We've come across seven S&P 500 companies that have no women on their boards of directors (and in some cases, never have or haven't for 10 years). The response on this from these companies, and from many onlookers, is generally that women will eventually get there. Is that an acceptable response?
CM: Research and experience tells that there are structural biases and hurdles that prevent women from having equal opportunities. As the GAO analysis found, even if the current rate of women joining corporate boards were doubled, it would still take at least 40 years to reach parity. That's unacceptable to me, and companies should take stock of their own processes to recruit and identify candidates for their board.
TST: What is your hope with this bill?
I'm very hopeful. With the support we've received so far from outside stakeholders, this should be a bill that garners wide bipartisan support.
TST: What other areas on Wall Street and in SEC regulation do you think suffer from gender-related issues?
CM: For a long time, our workplace policies have not kept up with the demands on working parents and caregivers. We've seen some attention to these issues from Wall Street in recent years, but there's still a lot of progress that needs to happen. We need to ensure that employees can move to a flexible schedule when they have young children or need to care for a sick relative, without sacrificing their prospects for advancement. Even in 2016 the brunt of the care giving responsibilities in a family fall to women, so they are disproportionately affected by policies that penalize workers that need to balance these demands. I've introduced the Flexibility for Working Families Act, which would make sure that employees can request a change in their schedule without fear of retaliation.
Women are not only underrepresented in corporate boardrooms, but in senior leadership positions at major corporations. Without a deliberate commitment by companies to recruit and retain women, the disparity will persist. This is bad for women who suffer economically from a lifetime of lower wages, but it's also bad for companies. Studies show that companies with women in top leadership positions outperform their peers. To the extent that it can, the SEC should encourage gender diversity throughout the corporate pipeline and companies should take a look at how their policies can help them make progress toward gender parity.