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California Bill Mandates Women Be Included on Corporate Boards

By William Vogeler, Esq. on April 25, 2018 | Last updated on March 21, 2019

California lawmakers want more women on corporate boards, and if their law passes it would turn corporate boardrooms completely around in the state.

According to studies, California has more boardrooms without women than anywhere else in the United States. Hannah-Beth Jackson, who co-authored the pending legislation, wants to change all that.

"They are operating without the benefit of the experience, perspective, and tools that women bring with them to the boardroom," she told Bloomberg. The bill could become the first law of its kind in the country.

More Women

Annalisa Barrett, a researcher and and finance instructor at the University of San Diego, said about 26 percent of California's corporate boards have all-male boards. That's about four percent higher than the rest of the nation.

Most California companies have at least one woman on their boards, including Guess and Pandora Media. But Senate Bill 826, which made it out of the first committee on a 5-1 vote, would require at least one woman on all boards.

It would apply to domestic or foreign corporations with principal offices in California effective Dec. 31, 2019. After that, it would require more women based on board size -- up to three women if the board has six or more members.

That would be a game-changer for companies like Skechers U.S.A, and Tivo Corp., which have men-only boards. It would also turn the tide in the Silicon Valley, which is known for male-dominated corporate cultures.

Corporate Culture

Ever since Ellen Pao pulled back the curtain on gender bias in the tech world, women there have been fighting discrimination more publicly. A survey in the San Francisco Bay Area revealed last year that 88 percent of women received demeaning comments from male colleagues.

That kind of culture brought Uber to a reckoning, as the board booted founder Travis Kalanick in the aftermath of widespread sexual harassment at the company. Board member David Bonderman compounded the problem when he slighted the sole female board member as they discussed the problem.

Ariana Huffington, citing studies, said if one woman is on a board that it was "much more likely that there will be a second woman on the board." Bonderman interjected: "Actually, what it shows is that it's much more likely to be more talking."

SB 826, once it clears committees, then goes to the Senate floor.

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