CALIFORNIA – State lawmakers Thursday sent the governor a bill that would require women to be included on the boards of directors of California-headquartered firms, citing a lack of diversity in corporate boardrooms. The bill would require publicly held corporations in California to include at least one woman on boards of directors by the end of 2019, and at least two by July 2021, the Los Angeles Times reported. All boards with at least six total members would be required to have at least three women by July 2021.
The state Senate passed the bill in a 23-9 vote, and the Assembly had approved the bill Wednesday in a 41-26 vote, the Mercury News reported. The measure was proposed because women make up 52 percent of California’s population, but only 15 percent of the directors of its public corporations, according to state Sen. Hannah-Beth Jackson, the Santa Barbara Democrat, who co-authored the bill with Senate leader Toni Atkins, a Democrat from San Diego.
“We are not going to ask anymore. We are tired of being nice. We’re tired of being polite. We are going to require this because it’s going to benefit the economy,” Jackson said in a floor speech, according to the Times. “It’s going to benefit each of these companies. It’s time that we burst that man-cave and put women in the boardrooms.”
U.S. companies that started the five-year period from 2011 to 2016 with at least three women on boards of directors reported significantly higher earnings growth than companies with none, according to a study by financial firm MSCI. However, increasing the representation of women on corporate boards may go beyond just economic benefits, the Huffington Post said.
Companies with more women on their boards are more likely to “create a sustainable future” by taking “steps to improve energy efficiency of operations, to measure and reduce carbon emissions, the reduction of packaging, and investment in renewable power generation,” according to a 2012 University of California, Berkeley study.
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“One-fourth of California’s publicly traded companies still do not have a single woman on their board, despite numerous independent studies that show companies with women on their board are more profitable and productive,” Jackson said in a statement Thursday. “The time has come for California to bring gender equity to our corporate boards.”
The state senator introduced a similar resolution five years ago, but it was non-binding and expired in 2016, according to the Mercury News. California was the first in the nation to make such a resolution, but since then a few other states have adopted similar measures. There is no federal requirement, the news website reported.
Governor Jerry Brown has until Sept. 30 to sign the bill.
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