Democrat-dominated legislature is moving torequire “gender
diversity” on the boards of publicly-held companies, which would have to
appoint individuals self-identifying as female.
May, the California State Senate passed SB
826 on a party-line vote. The bill mandates that
by the last day of 2019, California’s 445 publicly-held companies must
pay a fine unless they have at least one female — defined as “an
individual who self-identifies her gender as a woman, without regard to
the individual’s designated sex at birth.”
the last day of 2021 — if the bill becomes law — California
corporate boards with five or fewer directors must have a quota of at
least two self-identifying females. Corporations with six or more board
members must have at three least self-identifying females to avoid a
California Secretary of State would be empowered to set regulations and
issue fines equal to the average compensation of a corporation’s
directors for the first violation, and triple the average compensation
for any subsequent violations.
gender equality quotas for individuals identifying as female has been a
hot topic for progressives, who claim that publicly-held corporations
have a societal duty to lead the way — and that the law may be a
necessary tool to force compliance.
2017 report by Board Governance Research found that
26 percent of the public companies headquartered in California had no
self-identifying female board members, while 37 percent had one; 24
percent had two; and 12 percent had three or more. There were more women
directors for larger revenue firms than smaller firms.
Calmatters blog reported that
State Sen. Hannah-Beth Jackson (D-Santa Barbara) and co-sponsor State
Sen. President Pro Tem Toni Atkins (D-San Diego) said, “Gender diversity
brings a variety of perspectives to the table that can help foster new
and innovative ideas.”
claimed: “It’s not only the right thing to do, it’s good for a company’s
a study published in the peer-reviewed Public Library of Science PLOS
One academic journal, which analyzed published data from 20
peer-reviewed studies on 3097 companies, found the
“overall mean weighted correlation between percentage of females on
corporate boards and firm performance was small and non-significant.”
claim that SB
826 violates the U.S. and California
constitutions by requiring companies to discriminate against
self-identifying men wanting to serve on corporate boards.
Business attorneys also caution that the way the bill is written could
violate corporate law by mandating that companies whose headquarters are
in California, but are incorporated in another state, must comply with
California sexual diversity laws.
California Assembly must pass SB
826 by the end of August, and Gov. Brown must
sign the legislation, for it become state law.