SB 826: Women On Corporate Boards | NAWBO

SB 826: Women On Corporate Boards

SUMMARY

This measure would encourage equitable and diverse gender representation on every corporate board 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 and beginning July 2021 would require a minimum of two women directors on boards with five independent directors and at least three women on boards with six or more independent directors.

BACKGROUND

This is above all a business issue. Numerous independent research studies have shown that having gender diversity on corporate boards is beneficial to the corporation, including increasing profitability, better performance, governance, innovation, and opportunity, and creates meaningful cultural change in the workplace.

Yet, one-fourth of California's publicly-held corporations have no women directors on their boards. California’s public corporations have fewer women directors than the rest of the country, with only 15.5% of board seats held by women, lower than the Russell 3000 nationally at 16.2%, and significantly lower than the Fortune 1000 at 19.8%.  

As of June 30, 2017, California has 445 companies in the Russell 3000 with a total of 3,645 corporate directors. Only 565 of these seats are held by women, compared to 3,080 held by men. Among the counties in the state:  Los Angeles, Orange County and San Diego Counties have the lowest percentage of women directors (12%).  Silicon Valley (Santa Clara County), which has been historically low, has 16%. San Francisco County has the highest at 21%.

By legislating a greater role for women in boardrooms, California would be first in the nation to require proactive change. Change has not happened organically through general pressure. In 2013, Senate Concurrent Resolution 62 (Jackson) was a first step, and five other states followed suit. CalPERS and CalSTRS have proactively recommended that companies add more women to boards of companies where they invest, but they cannot require companies to do so.

GLOBAL BACKGROUND

Europe is leading this historic trend:  Norway in 2003 mandated 40% seats be held by women, followed by France and other European countries. Germany is the most recent (2015) and largest economy to mandate that 30% of corporate board seats be held by women.

SOLUTION - SB 826

More women are needed in top leadership positions. SB 826 is a proactive approach to achieving equity in the boardroom. California is the 5 th largest economy in the world and as an economic powerhouse we have an opportunity to take the lead on this issue. In order to finally achieve gender equity in the workplace, including fair representation, pay parity, safer workplaces, and greater work-life balance, changes need to occur at the top of the corporate structure. Women’s high-level involvement in corporations clearly provides a benefit to corporations and to the economic strength and vitality of our state.

SUPPORT

National Association of Women Business Owners, California (NAWBO CA), SPONSOR

STATUS

Introduced January 3, 2018

CONTACT

Bethany Renfree, (916) 651-4019
Bethany.Renfree@sen.ca.gov

Lori Kammerer, (916) 716-5674
Kammerer & Company, Inc. on behalf of
NAWBO CA LCK@midtown.net