SEC Commissioner Hester Peirce criticized recent legislation attempting to enforce moral beliefs onto the daily operations of corporations. In remarks before the 17th Annual SEC “Hot Topics” Conference, Ms. Peirce argued that forcing a company to “cater” to interests beyond those of its shareholders may compromise shareholders’ interests as well as the public interest.
In her remarks, Ms. Peirce referenced a bill recently passed in California that would regulate the gender composition of corporate boards. The California bill would require companies to put women on their boards, citing evidence that companies with women board members perform better. Ms. Peirce stated that if companies with women on their boards perform better than companies without, then shareholders already have strong economic incentives to elect women as corporate directors.