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August 30 2018

California Moves to Mandate Female Board Members for Publicly-Traded Companies

by Charlotte Hays

We all know that women bring special talents to boards and corporate jobs.

But we also know this: Women can get there on their own and don't need what amounts to affirmative action.

The state of California apparently doesn't know this: yesterday, California legislators voted on a bill that requires every major company operating in the state to have a woman on its board.

The bill passed the Assembly 41-21 vote and now goes to the state Senate, where it is expected to pass.

The Wall Street Journal explains:

If the bill is signed into law by Gov. Jerry Brown, a Democrat, publicly traded companies based in the state will need to have at least one woman on their boards by the end of next year and, on boards of five or more directors, two or three women by the end of 2021, depending on the board’s size. Those that don’t would face financial penalties.

State Senator Hannah-Beth Jackson, who represents tony  Santa Barbara, says, "With women comprising over half the population and making over 70% of purchasing decisions, their insight is critical to discussions and decisions that affect corporate culture, actions and profitability.”

No argument there.

But there are arguments against dictatorial government officials trying to run businesses: 

Opponents of the mandate, led by California’s Chamber of Commerce, argued that while they agree with the legislation’s intent, a quota based solely on gender takes into account 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.

The California law, if passed, will be similar to similar legally binding regulations in Europe. For those who believe that we women are talented and don't need such laws, here is a sobering thought:

In the U.S., some diversity advocates have cautioned that legal mandates could undercut more organic, economics-driven efforts to spur change. Rakhi Kumar, a senior managing director at State Street who oversees its board-diversity efforts, has said that on average, large European companies continue to have fewer women in senior executive roles than their U.S. counterparts. All public companies are required to have a board of directors that represents shareholders and oversees company management.

As an employee of a nonprofit led by a seven-member board with six women on it, I know what talented leaders women are.

I also know that we don't need affirmative action.

Here is the Wall Street Journal report.

Independent Women's Forum is an educational 501(c)(3) dedicated to developing and advancing policies that aren’t just well intended, but actually enhance people’s freedom, choices, and opportunities. IWF is the sister organization of the Independent Women’s Voice.​
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