U.S. SEC should revisit disclosure requirements on diversity - acting chair

FILE PHOTO: The U.S. Securities and Exchange Commission logo adorns an office door at the SEC headquarters in Washington, June 24, 2011. REUTERS/Jonathan Ernst

WASHINGTON (Reuters) - The U.S. securities regulator should think more “creatively and broadly” about tackling issues of race and gender diversity, including by potentially revisiting public companies’ disclosure requirements, the agency’s acting chair said on Thursday.

The Securities and Exchange Commission (SEC) should consider revisiting disclosure requirements for public companies and strengthening guidance on board diversity in an effort to address a lack of diversity across the securities industry and in corporate boardrooms, Allison Herren Lee said.

Last year, the SEC declined to consider environmental, social and governance, or ESG, issues when it amended disclosure guidance. Lee and fellow Democratic commissioner Caroline Crenshaw criticized the move at the time.

Efforts to address ESG issues have been given new life under Lee and the administration of President Joe Biden. The acting chair earlier this week said she had directed the agency to review companies’ disclosures on climate risk.

“The most obvious tool in our toolkit is disclosure,” Lee said in remarks given during a virtual forum for securities industry professionals, inviting comments on whether the SEC should consider requiring diversity assessments from regulated entities.

Firms under SEC’s oversight can voluntarily conduct diversity self-assessments, but participation in the program is “disappointing,” Lee said.

Lee said the SEC could also look at ways to better evaluate the impact of SEC rules on gender and racial discrimination and work to bring more diverse perspectives in their public outreach.

“We should think more broadly and creatively and pursue every opportunity we have to pursue diversity and inclusion,” Lee said.

Reporting by Chris Prentice