Pending Legislation Promotes Gender Diversity

SB 826 Would Require Women on Corporate Boards

If Senate Bill 826 becomes law, California would become the first state to impose gender diversity on corporate boards. Authored by State Senator Hannah-Beth Jackson, the legislation would require all publicly held California corporations to have a minimum of one woman on their board of directors by the end of 2019, and a minimum of two women on boards with five members and at least three women on boards of six or more by the end of July 2021. “One-fourth of California’s publicly traded companies still do not have a single woman on their board,” said Jackson said. “With women comprising over half the population and making over 70 percent of purchasing decisions, their insight is critical to discussions and decisions.”

Women currently make up 20.2 percent of Fortune 500 board seats, while Latinos, Asians, and African Americans of both genders collectively make up 14.5 percent of seats. The bill, which is currently awaiting Governor Jerry Brown’s signature, makes no mention of racial diversity. Historically, white women have been the biggest beneficiaries of affirmative action.

Though women make up 50 percent of the state’s population, white women and men combined make up 38 percent of California’s population ​— ​the second-largest ethnic group, after Hispanics (39 percent). However, corporate boards are overwhelmingly white, at 85.6 percent for Fortune 500 seats, with white men holding 69.2 percent and white women 16.4. Hispanics hold only 3.5 percent of board positions. “More women serving on boards of directors of publicly held corporations will boost the California economy, improve opportunities for women in the workplace, and protect California taxpayers, shareholders, and retirees,” according to the bill’s language. “First and foremost discrimination is gender based,” said Senator Jackson. “Once we break the glass ceiling for women, that will open up diversity of all kinds.”

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