California is the First State to Require Women on Corporate Boards

Sen. Jackson and Gov. Brown a signing ceremony for equal pay legislation in 2015 (Photo: Office of Sen. Jackson)

Source: Office of Sen. Hannah-Beth Jackson

Governor Jerry Brown signed legislation [on Sunday] authored by Senator Hannah Beth Jackson (D-Santa Barbara)to require gender diversity on corporate boards. The bill is a California Legislative Women’s Caucus priority.
 
Senate Bill 826 promotes equitable and diverse gender representation on corporate boards by requiring every publicly-held corporation in California to have a minimum of one woman on its board of directors by the end of 2019. By the end of July 2021, the bill requires a minimum of two women on boards with five members and at least three women on boards with six or more. California will be the first state in the nation with such a requirement. 
 
“With the Governor’s support of SB 826 today, yet another glass ceiling is shattered, and women will finally have a seat at the table in corporate board rooms,” said Senator Jackson.  “With numerous independent studies showing that corporations with women on their boards are more profitable, SB 826 is a giant step forward for women, our businesses and our economy.”

In 2013, Senate Concurrent Resolution 62 (Jackson) urged that by 2017, each public company in California increase the number of women on their board to one, two or three, depending on the size of the board.  California was the first state in the U.S. to adopt this type of resolution, followed by at least five other states that have passed similar measures. However, as of the December 31, 2016 cut-off date, fewer than 20% of the Russell 3000 companies headquartered in California had the minimum number of women directors called for in the resolution.  
 
Research has shown that gender diversity on corporate boards is associated with increased profitability, performance, governance, innovation, and opportunity. Yet, one-fourth of California’s publicly-held corporations have no women directors on their boards.  In this respect, California’s corporations are falling behind their global competitors with only 15.5% of board seats held by women, lower than the Fortune 1000 list at 19.8%.
 
A number of European nations have mandated gender diversity on corporate boards. In 2003, Norway mandated that 40% of corporate board seats be held by women, which was followed by France and other European countries. In 2015, Germany mandated that 30% of corporate board seats be held by women. As the 5thlargest economy in the world, California is well-positioned to take the lead on promoting gender equity in the workplace. 
 
SB 826 is sponsored by the National Association of Women Business Owners, California.
 
Jackson represents the 19th Senate District, which includes all of Santa Barbara County and western Ventura County.
 

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39 Comments

  1. Pitmix, can you think of any valid reason why men wouldn’t comprise 50% of the teachers at any school at this time? Are they less capable than women? Do they have less experience? To me the only reason they aren’t 50% is because of historic and ongoing discrimination in the workplace, which is not being remedied fast enough by societal factors. Thence the legislation. To me, I would rather have an all male teaching staff. Studies have shown that they are better teachers than women, and they couldn’t do any worse than the idiots that taught the kids coming into the workforce now.

  2. More women on boards is a good thing. We should have greater diversity within the business leadership community. But legislating this seems a bit much. We need more incentives which influence change not more laws that force it.

  3. I wonder if this law is actually constitutional? Hopefully it will be challenged in the courts. The government has proven over and over how poorly they govern the state. Besides general arrogance, what makes them think they are qualified to direct corporate governance? Why not mandate two homosexuals and transgenders on the boards as well?? This will just be another reason for more successful companies to move to another state, taking employment and tax revenue with them.

  4. Bosco, can you think of any valid reason why women wouldn’t comprise 50% of any board at this time? Are they less capable than men? Do they have less experience? To me the only reason they aren’t 50% is because of historic and ongoing discrimination in the workplace, which is not being remedied fast enough by societal factors. Thence the legislation. To me, I would rather have an all woman board. Studies have shown that they are better investors than men, and they couldn’t do any worse than the idiots that got us into the 2007 Great Recession.

  5. PITMIX: anti discrimination (title 7) laws have been in play for eons. It is illegal to discriminate against women in placing them on boards and such. And not hard to prove. So, there already is legislation addressing this. But forcing it seems like reverse discrimination to me. Who is the government to tell private business who they must employ, promote, etc.? This is tantamount to affirmative action and we see how awful that turned out to be. I agree with the poster who said this will simply result in more businesses leaving. I would.

  6. This law isn’t logical at all. Everyone can thank Hannah Beth for starting a new revenue stream for corruption. Here is why. Small corporations now need a woman on the board. Now they can just go to I need a woman on my board dot com and pay $50 for some random person to be on the board just to meet the requirement. Then business goes on as normal. There will be people who make a career of being on hundreds of boards. This is exactly what is done in Costa Rica. If an American company wants to start a business down there, a local citizen has to be on the board. There are boards of people that only do this and the corruption that has stemmed from it is awful. So I ask how is the law effective when it’s implementation can so easily be skirted?

  7. Calif is an amazing economic juggernaut, IN SPITE of it’s state gov’t which over taxes, and over regulates. This latest Cal gov’t initiative is just the latest example of CREEPing socialism.
    Funny question below which asks, if they “identify” as a female, would this suffice to qualify for a board position?? haha.

  8. Board members should be on board based on what they bring to table in terms of skill and knowledge to govern a company and not based on gender. I have served on board with women who deserve to be there based on their skills. I have also worked with boards who “checked” the diversity box with a board member appointment whose skills and knowledge were shockingly low. That board member was not respected by management and it hurt organizational morale every time they spoke as that lack of knowledge was exposed and because management is bound to follow the board’s directives. There is nothing worse than having to follow a person who does not know what they are doing.

  9. Anyone who thinks the “good old boys” club doesn’t still rein is kidding themselves. I clearly remember when a woman’s place was in the home, keep her barefoot and pregnant. It took long years of battle to accept that women were as smart as men and it still is a kink, many men don’t want to be on an equal footing. That “glass ceiling” is still difficult to break through. I was a stay at home mom, ” Susie Homemaker”, because that was my choice. Many brilliant women were kept in the unwanted role. Sometimes there needs to be force to have women accepted.

  10. This seems very sexist if you ask me. Do women need the government to come in with force for them to have an equal shot at success? I’d rather fail on my own than be propped up because of what’s between my legs.

  11. There is zero evidence that the distribution in every field should be 50/50. On average, men are different from women. They have different interests, different strengths, different ways of thinking….on average. Legislating a 50/50 split actively manipulates natural differences between people and is completely unethical in my opinion.
    Men (on average) are more interested in things than people. All of the psychological literature of the last 50 years illustrates this. These naturally occurring differences explain why men don’t make up 50% of the teaching professionals. They CHOOSE other professions. Forcing a 50/50 split actually eliminates the ability for individuals to make choices for themselves. The liberal policy would be to let people make their own choices.

  12. There are millions of women who are on the job every day, and will be on the job for the rest of their lives who would love nothing more than to stay at home and be “Susie Homemakers.” Count your blessings that you never had to serve customers coffee, change bedding on 100 hotel beds each, forced to sit through a yearly review then receive a humiliating raise, listen to co-workers whine each-and-every-day about this and that, or waiting for a bathroom stall while the seconds count down on your 5-minute break. Many would love such a life of stay-at-home leisure.

  13. Ruh roh. A few people don’t like a well-defined, fair, and good law. A law that will make our businesses stronger and more productive in California. Thus, helping our whole country be stronger. A good example in California, as usual.

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