ILLINOIS STATE HOUSE DISTRICT 7: Welch Passes Legislation Aimed at Increasing Corporate Board Diversity
Illinois State House District 7 issued the following announcement on June 4.
State Rep. Emanuel “Chris” Welch, D-Hillside, passed legislation last week, House Bill 3394, requiring corporations based in Illinois to report the racial and gender make up of their board of directors to the Secretary of State’s office and requires the University of Illinois to study the data and make recommendations to improve representation of women and minorities. Additionally, Welch’s legislation would require the University of Illinois to publish an individualized rating for each corporation’s efforts to increase diversity on their boards.
“While many in the business community agree on the value of increasing diversity amongst corporate boards, creating more diverse boards has proven difficult,” Welch said. “This measure puts all the data on the table, identifies firms that are placing an emphasis on diversity, reveals best practices to increase board diversity, while also holding accountable corporations that are not taking the steps necessary to embrace a more diverse corporate culture.”
The best and most current thinking on corporate health emphasizes that diversity among organizational leadership results in more nimble, creative problem-solving in our rapidly changing world. A 2015 study by McKinsey and Co. found that companies that excel in racial and ethnic diversity are 35% more likely to have financial returns above their peers, and those excelling in gender diversity are 15% percent more likely. As the conversation on increasing corporate diversity in Illinois has developed, Welch’s proposal has seen a groundswell of support from the business community.
“I applaud Rep. Welch and Sen. Belt for their leadership. Organizations that cultivate diversity are more likely to attract top talent, foster innovation, stimulate creative thinking and improve problem solving—all leading to better outcomes,” said John Rogers Chairman and CEO of Ariel Investments who serves on the boards of McDonald’s, Nike and The New York Times Co. “Diversity and inclusion is not only the right thing to do, it’s the best thing to do for companies and the customers they serve.”
“With the country becoming more diverse and corporations serving a multitude of different customers, the idea of boards being made up of different expertise and diverse thinking is extremely important for overall corporate performance,” said Sam Scott retired CEO of Corn Products International (now Ingredion Inc.), Chicago civic leader and member of Abbott Labs and Bank of New York Melon board of directors, and co-chair of the Illinois Business Immigration Coalition. “Rep. Welch’s measure creates the incentive necessary for Illinois corporations to revamp their recruitment practices and put their words into action. The proposal not only reflects who we are as a nation, but also who we strive to be.”
“Latinos are 17% of Illinois population but only 2% of corporate boards. House Bill 3394 creates a legal requirement to bring focus and creativity to addressing the need for equity and inclusion,” said Jaime Di Paulo, President and CEO, Illinois Hispanic Chamber of Commerce. “Thanks to Rep Welch’s leadership, Illinois will increase its competitiveness and position itself as a state with opportunities for everyone — regardless of race, ethnicity or gender.”
“You can’t make a beautiful tapestry with just one color. Diversity brings valuable perspectives to otherwise homogenous boards,” said Rey Gonzalez President and CEO, El Valor; former Vice President of Diversity, Exelon Corporation. “Over the past few years, we have seen large brands and companies make grave missteps due to their lack of cultural sensitivity and awareness, resulting in backlash and falling sales. Rep. Welch’s proposal will assist corporations to appeal to the very groups that are increasingly becoming consumer, commercial and social powerhouses.”
“I applaud Rep. Welch’s leadership to ensure our corporate boards reflect broad demographic changes of our state and nation,” said Tony Shu, Chairman of the Chinatown Chamber of Commerce. “Companies will reap the benefits from diversifying. It is a step forward for Illinois’ vibrant Asian American community.”
House Bill 3394 passed the House and Senate and awaits further consideration by Gov. J.B. Pritzker.
Original source can be found here.