SEC: Board diversity is a priority in new rules

US SEC Chairman, Mary Jo White, has outlined a range of initiatives focusing on boardroom diversity and executive compensation. Ms. White is considering whether the agency should require companies to provide more specific information about the racial or gender compositions of their boards. Rules adopted in 2009 require companies to disclose whether diversity is considered for management-backed director candidates who appear on corporate ballots. Some investor advocates say companies haven't provided shareholders with sufficient information about the makeup of their boards. Ms White also aims to complete a suite of executive compensation rules proposed by the agency last year. These include requirements that companies claw back or revoke some of their top officials’ incentive pay if they have to restate financial results.

Securities and Exchange Commission Chairman Mary Jo White outlined on Tuesday a busy agenda for what is likely to be her final full year at the helm of the SEC, with a range of initiatives focusing on boardroom diversity and executive compensation.

One new priority: possibly requiring companies to provide more details about the diversity of their directors. Ms. White, speaking at a securities conference in Coronado, Calif., said she is concerned that existing disclosures may not provide investors with enough information, according to people who attended the session.

Ms. White said she has instructed staff to review existing company disclosures and give her recommendations on whether the agency should require companies to provide more specific information about the racial or gender composition of their boards, these people said.

Rules adopted in 2009 require companies to disclose whether diversity is considered for management-backed director candidates who appear on corporate ballots. Some investor advocates say companies haven't provided shareholders with sufficient information about the makeup of their boards, in part because the rules leave it up to the companies to define "diversity."

The SEC is down to just three members—two less than its full complement—and any such rules would have to be proposed and subject to public comment before they could be adopted. That could be tough to complete in less than one year. Ms. White didn't provide a timetable for proposing the new requirements.

Separately, Ms. White said she aims to complete a suite of executive compensation rules the agency proposed last year, including r equirements that companiesÂ claw back, or revoke, some of their top officials' incentive pay if they have to restate the financial results, conference attendees said. Those rules, required by the 2010 Dodd-Frank law, go beyond existing clawback requirements, which generally can be invoked only after misconduct is uncovered at public companies.

Ms. White also said the agency would sign off on a blueprint for a huge computer system called the Consolidated Audit Trail, or CAT, a market-monitoring project launched in 2010, these people said.

CAT, originally conceived as a way to let regulators monitor stock and options orders in real time and quickly zero-in on manipulators, has faced red tape and bureaucratic delays that have caused the system to fall years behind schedule. At the current pace, it is expected to get off the ground by 2019 or 2020.

The SEC recently hired a technology expert to help oversee the development of the project, after failing to hire its top pick for the position last summer. Steven Samson—who previously managed an existing, more limited SEC system called Midas, which collects public trading data from each U.S. stock exchange—will now serve as program manager for CAT, according to people familiar with the matter.

(END) Dow Jones Newswires

January 26, 2016 19:35 ET (00:35 GMT)

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