Senate Bill 826 would require publicly held corporations to have one woman by 2019 and two or more after that
SACRAMENTO — Legislation authored by State 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 Banking and Financial Institutions Committee today on a 5 to 1 vote.
Senate Bill 826 promotes equitable and diverse gender representation on corporate boards 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. 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 would be the first state in the nation with such a requirement.
“Gender diversity brings a variety of perspectives to the table that can help foster new and innovative ideas. These perspectives are valuable for corporations, their stakeholders, employees, and customers,” said Jackson. “SB 826 will put California at the forefront in bringing gender diversity to California corporations and position our state to lead the nation in promoting equity. It’s not only the right thing to do, it’s good for a company’s bottom line.”
“People are creatures of habit and comfort — when making decisions, we go with what we know. Too often, men are choosing other men for seats on company boards and leaving a lot of talent behind. SB 826 will help us get to a tipping point where enough women are on boards, in networks and in pipelines that gender diversity will take care of itself. I thank Senator Jackson for her leadership on this critical issue,” said Senate President Pro Tempore Toni Atkins.
Research has shown that gender diversity on corporate boards is associated with increased profitability, performance, governance, innovation, and opportunity. Yet, one-fourth of California’s publicly-held corporations have no women directors on their boards. In this respect, California’s corporations are falling behind their global competitors with only 15.5% of board seats held by women, lower than the Fortune 1000 list at 19.8%.
A number of European nations have mandated gender diversity on corporate boards. In 2003, Norway mandated 40% corporate board seats be held by women, which was followed by France and other European countries. In 2015, Germany mandated that 30% of corporate board seats be held by women. As the 5th largest economy in the world, California is well-positioned to take the lead on promoting gender equity in the workplace.
“Women CEOs are raising their hands – many are ready and well-qualified, and could immediately begin serving on boards. Thanks to Senators Jackson and Atkins, this proposed legislation opens important doors for qualified women to lead,” said Anne Staines of Sacramento, Statewide President of the National Association of Women Business Owners, California, a sponsor of the bill.
SB 826, a California Legislative Women’s Caucus priority bill, will be heard in the Senate Judiciary Committee on April 24.
Jackson represents the 19th Senate District, which includes all of Santa Barbara County and western Ventura County.