California Law Would Require Women on Boards of Publicly Traded Companies

Kathy Gurchiek By Kathy Gurchiek August 31, 2018

​California could become the first state to require publicly traded companies that are headquartered there to have at least one woman sitting on their boards. Boards that have five or more members would need to add two or three women by the end of 2021.

Failure to do so would mean financial penalties.

The state Assembly passed the bill on Aug. 29 and it headed to Gov. Jerry Brown's desk after the senate approved it Aug. 30. California's 2018 legislative session came to a close in August, and Brown must sign or veto bills by Sept. 30. 

The legislation provides for creating an extra board seat to accommodate a new female member instead of removing a man already on a board. The proposed law does not apply to private companies in California. Companies would need to comply by the end of 2019.

 A coalition of 30 businesses and groups led by the California Chamber of Commerce are against the bill. Opponents say a quota based solely on gender considers only one element of diversity and would violate the U.S. and California constitutions because it could conceivably put companies in the position of turning down a male board candidate or displacing a male board member based on his sex, according to the Wall Street Journal.

SHRM Online has collected the following articles on the topic from its archives and other news outlets.


California Moves to Mandate Female Board Directors
A new bill would require major companies, whose principal executive offices are located in California, to put female directors on their boards. The bill now advances to Gov. Jerry Brown for his signature.

If signed into law, it will likely help fuel similar movements elsewhere. Massachusetts and Illinois have passed nonbinding resolutions that push companies to improve the gender balance of their boards.

(Wall Street Journal)


California Could Become First State to Mandate Women on Boards

Skechers U.S.A. Inc., TiVo Corp., and other California-based companies that have only men on their boards would need to add at least one woman under the bill.

Countries such as Norway, France and Germany already use gender diversity quotas to bring more women into boardrooms. There are no similar quotas in the U.S., though some states, including California, have adopted nonbinding resolutions urging companies to diversify their boards.



Why Breaking Into the Boardroom Is Harder for Women

Women looking to land their first board seats have a much tougher time than men, recruiters and corporate directors say. Some businesses are now trying to solve this problem in the face of intensified shareholder pressure for more female directors. 

(Wall Street Journal)


Why 2018 Could Be a Record Year for Women Joining Corporate Boards

From January to May, women made up 31 percent of new board directors at 3,000 of the largest publicly traded U.S. companies, according to a data analysis by corporate governance firm Institutional Shareholder Services. That's the highest percentage of female board seats in at least a decade.

This increase in female board representation shouldn't be all too surprising, given a growing body of research showing that diverse boards improve business performance, as well as the gender inequality issues that have plagued companies over the last year.



[SHRM members-only toolkit: Developing Organizational Leaders]


Viewpoint: Women Leaders Build the Bottom Line

Organizations seem to understand that putting more women in the C-suite gives them a clear, competitive advantage. SHRM's executive network HR People + Strategy reports that 82 percent of organizations believe advancing women is a critical business issue. But they are less sure about how to make this happen. Only 28 percent of HR leaders believe their organizations have the ability to elevate women into leadership roles.



Senate Bill 826 Hits Twittersphere





Hire the best HR talent or advance your own career.

Break California’s intricate labor code.

Successfully interpret and apply California employment law to your organization’s people practices.

Successfully interpret and apply California employment law to your organization’s people practices.



HR Daily Newsletter

News, trends and analysis, as well as breaking news alerts, to help HR professionals do their jobs better each business day.