New Jersey Assembly Bill A1702

New Jersey 2022-2023 Regular Session

• Introduced: 1/11/22
• Refer: 1/11/22

Caption

Requires State Treasurer to collect and study certain demographic information on corporate boards and in senior management.

Impact

The bill is framed within a broader effort to analyze and improve diversity in corporate America. Starting from February 1, 2024, and every four years thereafter, the State Treasurer will publish reports documenting the demographic information obtained from annual filings. These reports aim to provide insights into the representation of different demographic groups within the boards and senior management of publicly held corporations and nonprofits based in New Jersey. The legislative intent behind this initiative is to encourage businesses to adopt more inclusive practices by making demographic disparities evident.

Summary

Assembly Bill A1702 introduces significant requirements for corporations and nonprofit corporations operating in New Jersey. The bill mandates that these entities must include specific demographic information in their annual reports submitted to the Department of the Treasury. This information includes race, ethnicity, sexual orientation, gender identity or expression, disability status, and veteran status of the board members and senior management. The inclusion of this demographic data is intended to promote transparency and accountability in corporate governance, particularly regarding diversity and representation within these entities.

Contention

While supporters argue that the bill is a step towards fostering an equitable business environment, there may be concerns regarding privacy and the implications of mandated reporting. Critics might raise issues about whether such requirements could deter corporations or lead to potential misuse of the information. Additionally, implications for businesses that fail to comply with these new requirements could involve administrative penalties or even revocation of the corporation's certificate of incorporation if reports are not filed for two consecutive years. This enactment represents a shift toward greater regulatory oversight in corporate governance.