News Story

Michigan bill would require corporations to report on number of female board members

Will Michigan get in the business of tracking diversity statistics of individual companies?

House Bill 4597 of 2021 is a glimpse into what’s possible next year in Lansing.

HB 4597 was introduced in the Michigan House of Representatives by Rep. Padma Kuppa, D-Troy, and sent to the Workforce, Trades, and Talent Committee on March 25, 2021. The bill would require corporations to tally the number of females on their board of directors or in executive positions and include that information in already-required annual filings with the state.

The bill has not moved in the Republican-controlled Legislature and is unlikely to do so.

The bill defines “female” as “an individual who self-identifies her gender as a woman, without regard to the individual’s designated sex at birth.”

The bill would require a corporation to state whether it has a specified number of females on its board: at least three (for boards of more than five members); at least two (for boards with five members); or at least one (for boards with fewer than five members).

If the corporation does not meet the requirement, it would have to explain why not, and what it is doing to meet to comply. If it has established no goals or plans to have a minimum number of females in leadership, the corporation must explain why.

The requirements would be added to a report that corporations must file with the state every year, which includes the names and addresses of their offices. Failure to file the report makes the company liable to a penalty of $10 a month, or a maximum of $50. The proposed law does not say whether failing to include information on female board members means the corporation has failed to file its report.

The bill would require corporations to tell the state:

  • The number and percentage of women in executive positions
  • Whether the corporation has a policy for identifying and nominating female board members (or a statement explaining why it does not)
  • If there is a plan for increasing the number of female board members, a description of its objectives and key provisions, how the company is implementing it, any progress it has made toward achieving the plan’s objective, and how the corporation measures progress
  • A description of how the board considers female representation, including whether it considers the level of female representation on corporate boards in identifying and nominating candidates
  • A description of whether the company considers female representation in filling executive positions, or a statement explaining why it does not
  • A description of voluntary targets for female representation or an explanation for why there isn’t one.

Kuppa did not respond to a request for comment.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.