Patrick McGreevy of the Los Angeles Times writes that in August 2018, the California legislature passed a bill, approved on a 23–9 vote, requiring firms based in the state to include women on their boards. This bill mandates publicly held corporations in California to have at least one woman by 2019. By 2021, at least two women will be required for boards with five or fewer directors, while at least three will be required for boards of six or more. The coauthors of this bill, state senator Hannah-Beth Jackson and senate leader Toni Atkins, explained that because only 15 percent of the directors of public corporations in California are women, while women make up 52 percent of the state’s population, women’s interests are not adequately represented on boards. In an earlier post, I wrote about the benefits of diversifying boards:
- Boards set long-term direction and policies, including those that create family-friendly workplaces.
- Boards are in charge of hiring and firing CEOs. Research shows that people tend to hire others like them. With few women and minorities on boards, talented women and minorities may be overlooked for CEO roles, keeping the glass ceiling in place.
- Companies with more diverse boards pay higher dividends and enjoy more stable stock prices.