Corporate Governance

Diversity and the Securities and Exchange Commission

By J Robert Brown Jr.

At the Rocky Mountain Securities Conference held in Denver on Friday, May 7, I asked Commissioner Walter how things had changed at the Commission over her long experience with the agency.  Commission Walter joined the SEC in the 1970s and, in the 1980s and 90s, served as Associate General Counsel (and as my boss) and Deputy Director of the Division of Corporation Finance.  Her experience with the Commission spans more than three decades.  Her first comment was that she was on a Commission that, for the first time in history, had three women.  In short, unlike corporate boards, the US government is apparently able to find enough qualified women (and they all are) to make up a majority of the Commission.

Having said that, we note a timely speech by Commissioner Aguilar about diversity (or lack thereof) at the staff level.  Earlier this month (May 3), Commissioner Aguilar spoke at the Attorney Career Roundtable and titled his remarks: Recruiting the Best and the Brightest Means Striving for a Diverse Applicant Pool.  In his talk, he gave the stats on diversity at the "senior officer" level.

• As of fiscal year 2009, the agency's senior officers were approximately 89% White, 4% African-American, 3% Hispanic, and 2% Asian. The gender breakdown among these officers is 67% male and 33% female.

Its not quite clear exactly what "senior officer" level encompasses (presumably it includes all managers from the branch chiefs on up, but that's not clear).  Nonetheless, the statistics are revealing.  The Commission has not done an adequate job making sure that all communities are adequately represented.

One can hope that with the current hiring binge underway, the Agency will reach out to underrepresented communities.  Most officers rise from the staff.  To ensure adequate representation among the officer corps means ensuring strong representation at the lower levels. 

The current Commission has been decisive and has corrected a number of the weaknesses left over from the prior administration.  Increasing diversity is another one that requires substantial attention. 

Full post as published by The Race to the Bottom on May 15, 2010 (boomark / email).