Law to require companies to disclose board's racial, gender makeup

The state will soon require Illinois corporations to report the gender and racial makeup of their corporate boards.

Gov. J.B. Pritzker signed the legislation Tuesday. The measure requires corporations headquartered in the state to annually disclose the gender and racial makeup of its board.

Starting in 2021, the reports from corporations must be sent to the Secretary of State's Office by Jan. 1 each year. The University of Illinois will publish the results by March 1.

Supporters said the measure will highlight companies that value diversity and those that don't.

"All eyes will be watching," state Rep. Chris Welch, D-Westchester, said. "Every publicly-held corporation in this state will care about how they're seen."

During the debate over the bill earlier this year, the Illinois Senate Democratic Caucus said eight percent of the 77 Illinois Fortune 1,000 companies had corporate boards composed of 20 percent or more women. The caucus said African-American professionals compose 6.3 percent of corporate boards nationwide. Asian-Americans and Latinos make up 3.7 percent and 2 percent, respectively, according to a statement from the caucus.

Pritzker said the new law would encourage diversity and inform the public.

Activists criticized the bill after lawmakers changed it from setting gender and minority quotas for corporate boards over fears that it would be found unconstitutional. Earlier versions of the bill also included hefty fines for noncompliance. Pritzker said publishing the information was just as important as diversity requirements.

"Shining a light on this issue is hugely important and you can't shine a light on it without the data," the governor said.

A similar law is set to take effect in California. That measure could face legal challenges after it's implemented.

Pritzker was criticized during his campaign for a lack of diversity in his business entities.

Republicans said the bill, even in its watered-down form, was an intrusion of public and corporate privacy and that it could possibly be illegal to ask questions about race and gender in interviews.