SEC Chief Accountant Pushes Board Diversity as a Priority
During his March 24 speech in Knoxville, Tennessee, Securities and Exchange Commission (“SEC”) Chief Accountant Wesley Bricker pressed audit committee members to make board diversity a priority on their upcoming agendas. Bricker said board diversity would help enhance the ability for an audit committee to oversee financial reporting and lower the possibility of group think. He also mentioned academic research which discovered that boards with diverse members experience improved quality in financial reporting, and are more probable to view management accountable for weak financial performance.
Bricker’s push for diversity reflects investors calling for more diversity among corporate directors and those nominated for board seats. The push for diversity is also reflected in a recent Big Four firm report. Over half of investors surveyed want board diversity to be a priority. Many investors are also frustrated over the slow pace of gender diversity on board. Last year, the number of women holding directorships among Standard & Poor’s 1500 index companies increased by one percent. With that percentage remaining the same over the last five years, it will take over 30 years for gender parity to be reached.