California is one step closer to being first state in the nation to require more women directors on public company boards | NAWBO

California is one step closer to being first state in the nation to require more women directors on public company boards

For Immediate Release
April 30, 2018

Contact: Lori Kammerer cell: (916) 716-5674 or lorikammerer@gmail.com

 

CALIFORNIA ONE STEP CLOSER TO BEING FIRST STATE IN NATION

TO REQUIRE MORE WOMEN DIRECTORS ON PUBLIC COMPANY BOARDS

 

Senate Bill 826 would require at least one seat to be added for a woman

on boards of listed corporations that don’t have women directors currently.

 

SACRAMENTO—Legislation authored by Senator Hannah-Beth Jackson (D-Santa Barbara) and Senate President Pro Tempore Toni Atkins (D-San Diego) to require gender diversity on corporate boards passed the Senate Judiciary Committee on Tues, April 24th by a 5-2 vote, following the Weds, April 18th passage by its first policy committee test, the Senate Banking and Financial Institutions Committee, by a 5-1 vote.

Senate Bill 826 provides equitable and diverse gender representation on corporate boards of directors by requiring every publicly-held corporation headquartered 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 would require a minimum of two women on boards with five members and at least three women on boards with six or more. California is the first state in the nation to consider such a requirement.

“Fully one-fourth of California’s publicly traded companies still do not have a single woman on their board, despite numerous independent studies that show companies with women on board are more profitable and productive,” said Senator Jackson. “With women comprising over half the population and making over 70% of purchasing decisions, their insight is critical to discussions and decisions that affect corporate culture, actions, and profitability. The time has come for California to bring gender equity to our corporate boards.”

Credit Suisse research demonstrated that gender diversity on corporate boards is associated with increased profitability, performance, governance, innovation, and opportunity. California’s corporations lag behind the national average, with only 15.5% of board seats held by women, lower than the Russell 3000 at 16% and the Fortune 1000 list at 19.8%.

European nations have led the way mandating gender diversity on corporate boards.

In 2003, Norway mandated 40% of corporate board seats be held by women, followed by France and other European countries. In 2015, Germany mandated that 30% of corporate board seats be held by women.

“As the fifth largest economy in the world, California is well-positioned to take the lead on promoting gender equity in the workplace,” said Anne Staines of Sacramento, Statewide President of the National Association of Women Business Owners, California, the sponsor of the bill.

“The board nomination and selection process all happens confidentially, behind closed doors,” explained Betsy Berkhemer-Credaire, board member of NAWBO-CA and CEO of Berkhemer Clayton Retained Executive Search. “There is no transparency. Seats only come open when current board members retire or pass the generally accepted age limit of 75. Years can go by before there is an opening, and then friends of existing board members are typically selected.  With this bill, corporations that have no women directors currently will be required to add a seat for a woman in 2019. Seats would not be taken away from existing boards members, but a woman would be added.”

"Women CEOs are raising their hands who are ready, well-qualified and could immediately begin serving on corporate boards,” adds Staines.  “The pipeline of outstanding, qualified women executives of all ethnic backgrounds is over-flowing.

For the few seats that come open, generally men who are known to other male board members have a greater chance of being nominated for boards than women.  We women business owners are ready to take on the duties at any time, to help grow the economy in California.

“Our gratitude goes to Senators Jackson and Atkins, because this proposed legislation will reduce a major barrier so that qualified women will have the opportunity to lead and grow public companies and the economy will benefit,” said Staines.

SB 826 is a California Legislative Women’s Caucus priority bill and is scheduled to be heard in the Senate Appropriations Committee in the next few weeks.

The National Association of Women Business Owners-California is the federation of ten chapters of women business owners throughout the state, representing the issues and interests of 1.5 million women business owners who employ 995,000 Californians in addition to their own jobs. Chapters are located in San Diego, Orange County, Inland Empire, Los Angeles, Ventura County, Santa Barbara, Central Coast, Bakersfield, Silicon Valley, Sacramento, and San Francisco Bay Area.

For more information, see www.NAWBOCA.org.

###