BILL ORDERS BOARDS TO ADD WOMEN
Measure, aimed at publicly held firms, is passed by state Senate and is sent to Brown.
SACRAMENTO — Citing a lack of diversity in corporate boardrooms, California lawmakers on Thursday sent Gov. Jerry Brown a bill that would require women to be included on the boards of directors of firms based in the state.
The bill would require that publicly held corporations in California include at least one woman on their boards by the end of 2019, and at least two by July 2021. Corporate boards with six or more members would be required to have at least three women on the panels by the middle of 2021.
The measure was proposed because women make up 52% of the state’s population but just 15% of the directors of its public corporations, said state Sen. Hannah-Beth Jackson (D-Santa Barbara), a coauthor of the bill with Senate leader Toni Atkins (D-San Diego).
“We are not going to ask anymore,” Jackson said in a fiery floor speech. “We are tired of being nice. We’re tired of being polite. We are going to require this because it’s going to benefit the economy. It’s going to benefit each of these companies.”
The legislation was opposed by a coalition of 30 business groups including the California Restaurant Assn., the California Chamber of Commerce, the California Trucking Assn. and the Long Beach Area Cham-
ber of Commerce. They issued a joint letter saying that they support gender equity but that the legislation is illegal.
The state chamber of commerce said the measure “requires publicly traded corporations to satisfy quotas regarding the number of women on its board or face significant penalties, which is likely unconstitutional, a violation of California’s Civil Rights statute and a violation of the internal affairs doctrine for publicly held corporations.”
Annalisa Barrett, a clinical professor of finance at the University of San Diego’s School of Business, estimated that some changes will have to be made by 377 California-based companies that are on the Russell 3000, an index that tracks the performance of the 3,000 largest U.S.-traded stocks. Many more smaller companies will also have to make changes, she predicted.
The bill was approved by the Senate on a 23-9 vote, with opposition from Republicans including Sen. Joel Anderson of Alpine.
“I can’t support a bill that underestimates the power and strength of women,” Anderson said. “To say that they can’t find their way onto a board without our help undermines all their hard work.”
Lucy Dunn, head of the Orange County Business Council, had a similar opinion. “This legislation is, to me, insulting,” she said in a statement. “Rather than celebrate the competitive advantage women bring ... it relegates them to placeholder status.”
Atkins responded angrily to those who said the bill isn’t necessary.
“I am sick and tired of being in a position of influence and power and yet seeing so many people like me who are still pleading to be given that opportunity,” Atkins told her colleagues.
Jackson said women make more than 70% of purchasing decisions, so “their insight is critical to discussions and decisions that affect corporate culture, actions, and profitability.”
Supporters cite similar efforts in Norway and Germany.
“Adding women board members to our public corporations will help advance family-friendly policies in the workplace and bring California one step closer to gender equity,” said Anne Staines, statewide president of the National Assn. of Women Business Owners.