The state of California is fighting gender inequality through legal action: the Golden State now requires companies to appoint at least one woman to their board of directors by 2020, prohibiting all-male executive boards.
The law is the first of its kind in the United States but has seen tremendous growth in other Western nations.
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California’s new law, signed by Governor Jerry Brown on September 30th, also requires companies with five directors to add at least two women by the end of 2021, and companies with six or more directors to add at least three more women by the end of the same year.
Should companies not comply with the new legislation, financial penalties would be levied against them starting at $100,000 for the first offense.
Proponents of the bill hope that outlawing all-male executive boards will help drive gender diversity within the United States. Research shows that female representation on boards is key for women’s advancement. Women on boards are more likely to consider other women for other corporate positions and choose more diverse candidates for the board itself.
But not everyone is happy with the new law. While some say it serves as a detriment to gender equity and will lead to unqualified individuals being hired, others feel the law is too narrow and approaches the issue with the wrong tactic.
Tricia Griffith, president and CEO of the Progressive Corporation, says that banning all-male executive boards misses the mark by excluding other upper-management positions.
“We need to look deeper in organizations. If you want someone that has a CEO role to their name, you’re going to be very limited. So you need to go a layer deeper, then another layer. And those women and people are hard at work in operating roles that have a lot of value.”
Bonnie Gwin, co-managing partner of Heidrick & Struggles’, added that she was “personally not a huge fan of quotas.” Instead, Gwin suggested a “Name and Shame” system where companies are asked to make 25% of their board members women by a certain date or else have the issue brought before the press.
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Still, some see these quotas as a crucial step toward true gender equality in the corporate world. When quotas are not set, companies may fail to diversify their ranks. Vicki W. Kramer, lead author of Critical Mass on Corporate Boards, points to the idealistic legislation found in other states.
For example, Pennsylvania passed a resolution in 2017 which urged both public and private companies to have a minimum of 30% women on their boards by 2020. Kramer feels that such hopeful proclamations are useless without legal weight and lead to women feeling like token bargaining tools.
While the future of women in corporate positions is not clear, California’s actions are sure to spark a new wave of discussion concerning women in the workplace.
Featured Image by rawpixel on Unsplash
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