By the end of 2019, publicly held corporations headquartered in California must by law have at least one female board director as a result of a bill signed Sunday by Gov. Jerry Brown in an effort to address gender gaps in corporate leadership.
Should the law survive what Brown acknowledged are "serious" legal challenges, California will be the first state in the country to require such representation, according to the Los Angeles Times, which reported that under the law, companies that don't comply face hundreds of thousands of dollars in potential fines. The law requires some companies — depending on board size — to have at least three female board members by the end of 2021.
California's passing such a bill sends a message to corporations everywhere: It's past time to understand the value of diversity, said Terri Boyer, director of the McNulty Institute for Women's Leadership at Villanova University, who called the bill's passage "a wake-up call" and a "big push toward something people said would never happen."
"Just putting a woman on a board because you're checking a box isn't going to have the impact that you want it to," Boyer said. "That's why you have to do it right. [Corporations] have to be intentional about it, and they have to value the diversity that those women can bring."
In the Philadelphia region, women's presence on corporate boards and influence in the C-suite has grown over the last five years, but it's still far from where women's advocates want it to be. In 2016, women made up about 16 percent of corporate boards, up from 11 percent in 2011, according to last year's Women in Leadership report, an analysis funded by the Philadelphia-based Forum of Executive Women. The findings are based on SEC filings for the 2016 fiscal year for the top 100 public companies (based on reported revenue) in the region. This year's report has not yet been released.
Between 2011 and 2016, the percentage of female executives in those companies rose from 11 percent to 15 percent. In the same time frame, the number of those companies without any female board directors decreased from 36 to 19, and the number of corporations with no female executives fell from 58 to 43. The figures are largely in line with national averages.
In California, about one-quarter of publicly traded companies have all-male boards, according to a state representative who introduced the legislation.
The bill faces similar criticisms lobbed at affirmative action statutes over the years. A number of California business groups opposed it, including the state's Chamber of Commerce, which criticized the legislation as "likely unconstitutional" and in violation of California's Civil Rights statute.
Jessica Levinson, a California law professor who has followed the bill, told the LA Times that she is "not at all convinced it would pass legal muster" because it is "a clear gender preference in that you are saying you need to single out women and get them on boards."
Brown said in a statement that "serious legal concerns have been raised."
"I don't minimize the potential flaws that indeed may prove fatal to its ultimate implementation," the governor said. "Nevertheless, recent events in Washington, D.C. — and beyond — make it crystal clear that many are not getting the message."
Those recent events include the Supreme Court confirmation hearing of Brett Kavanaugh before the U.S. Senate Judiciary Committee, which voted, 11-10, on Friday to advance his nomination to the full Senate. The FBI is currently investigating allegations of sexual violence against Kavanaugh. Of the 11 Republican and 10 Democratic members of the Judiciary Committee, four are women, all Democrats.
Pennsylvania has faced similar criticism for its political makeup (though a bill like the one in California wouldn't address that). The state currently ranks 39th in the country in terms of proportion of women serving in the state legislature: 19.4 percent, according to the Center for American Women in Politics at Rutgers University. There are no women in Pennsylvania's 18-member U.S. congressional delegation (though that is expected to change soon), and there has never been a woman governor or U.S. senator from Pennsylvania.
New Jersey ranks 13th among state legislatures for its 30 percent proportion of women. The governor and both senators are men, as are 11 of its 12-member congressional delegation.
Boyer said while policies mandating a certain number of women in leadership positions could encourage companies to think differently about the benefits of diversity, real cultural change inside corporations is "long term" and requires that companies invest resources in training women early in their careers, bringing in diverse points of view, and holding middle management accountable.