Ensuring Diverse Leadership Act of 2019

Floor Speech

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Mrs. BEATTY. Mr. Speaker, I want to thank the gentleman from Guam (Mr. San Nicolas), vice chair, for his leadership and for all his support. And to the gentleman from Ohio (Mr. Stivers), my colleague, thank you for your support.

Mr. Speaker, I have the distinct honor to chair the Committee on Financial Services' Subcommittee on Diversity and Inclusion. And we have heard from numerous experts and we had countless research reports that show more diverse executive teams are more likely to outperform their peers on profitability, be more stable, and increase their market share.

According to a study conducted by McKinsey & Company entitled, Delivering through Diversity, researchers have found that companies in the top 25 percent for gender and ethnic diversity on executive teams were 21 percent to 33 percent more likely to outperform on profitability.

While companies in the bottom 25 percent for both gender and ethnic diversity were 29 percent less likely, Mr. Speaker, to achieve above- average profitability.

That is why it is so important that we pass my bill, the Ensuring Diverse Leadership Act of 2019, or better referred to as H.R. 281, which would require at least one individual reflective of gender diversity and one individual reflective of racial or ethnic diversity to be interviewed for each Federal Reserve president vacancy.

Mr. Speaker, as we have heard, it is modeled after the National Football League's Rooney Rule, which requires every team to interview at least one minority candidate in the hiring process for a new head coach.

This bill adopts this proven private-sector diversity initiative and applies it to the Federal Reserve, what I like to call the Beatty rule.

Like the National Football League prior to the implementation of the rule in 2003, the 12 Federal Reserve banks face a diversity problem within the leadership in their institutions. This would help move the needle.

In more than 100 years of existence, the 12 Reserve banks have had only three non-White presidents and seven female presidents. It wasn't until 2009 that the Federal Reserve ever had a non-White Reserve bank president. It wasn't until the historic selection of my friend Raphael Bostic to be the president of the Federal Reserve Bank of Atlanta in 2017 that an African American president of the Federal Reserve was appointed.

Though we have had seven female presidents, 8 of the 12 Reserve banks have never had the distinction of having a female at the helm. That is why we need to adopt the Beatty rule at the Federal Reserve and pass this very important bill.

Reserve bank presidents not only serve as the head of their financial institutions, but they play an incredibly important role in our Nation's economy, from serving on the Federal Open Market Committee, which determines the country's monetary policy and interest rates, to regulating the banks in their regions, to getting cash into their banking systems.

Federal Reserve presidents should be more reflective of the public, and this bill will ensure diverse leaders are in the room and at the table when making decisions that directly impact our economy and directly impact our communities.

I would like to end by thanking Chairwoman Waters and all of my colleagues on both sides of the aisle who have cosponsored this legislation, including my good friend and colleague from Ohio (Mr. Gonzalez), who spoke on behalf of this bill and helped to make this bill bipartisan.

Lastly, I would like to thank Jim Rooney and the Rooney family, with whom I have had the opportunity to sit down and discuss this legislation, his philosophy, and his ideas. He is the son of the late Dan Rooney.

This is a very important initiative. I am pleased to have his support and bipartisan support on this bill.

Mr. Speaker, I urge my colleagues to support this bill, and I ask them to vote in the affirmative, ``yes,'' to pass the Beatty rule.

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