California Becomes First State To Require Women Be On Corporate Boards

Outgoing Gov. Jerry Brown signs new law requiring that publicly traded companies name women to the board of directors.
Alex Wong / Getty Images

California is making huge strides in terms of social justice, becoming the first state to require that publicly traded businesses operating within the state have to have women on their board of directors, reports the Financial Post. This new rule is one of several signed into practice by Gov. Jerry Brown on Sunday, part of a bundle of legislation aimed at boosting or protecting women in the workplace.

Now, each California based operation must have a woman on the board of directors by the end of next year. By 2021, companies would need at least three women on their board of directors, depending on the number of seats there were available. He did reference some legal concerns that have been brought up. The California Chamber of Commerce said that it will be hard for businesses to implement the new policy. They also say that it goes against constitutional protections against discrimination.

“I don’t minimize the potential flaws that indeed may prove fatal to its ultimate implementation,” Brown wrote in a signing statement. “Nevertheless, recent events in Washington, D.C. — and beyond — make it crystal clear that many are not getting the message.”

Sunday was Brown’s last opportunity to sign legislation into law before he vacates his office. He has served the maximum term that is allowed under the law. He also signed legislation that will require smaller businesses to offer sexual harassment training, and legislation that banned secret settlements for sexual harassment cases.

Gov. Jerry Brown and Canadian Prime Minister Justin Trudeau. Jeff Chiu-Pool / Getty Images

The #MeToo movement against sexual harassment has dominated the news cycle of late, and this legislation deals with many of the issues brought forth by activists within the movement. The author of relevant measure SB 826 — Hannah-Beth Jackson — said that she believes that having more women in power can help to prevent sexual harassment in the workplace.

Hannah-Beth Jackson, a state senator, said that more women in positions of power on corporate boards can bring about greater success as well. Women are known for their skills at multi-tasking and collaboration, she said.

One quarter of publicly traded companies in California don’t have a women on their board of directors at all. Government intervention was deemed necessary because lawmakers did not feel that corporations were doing enough to recruit women to serve as executive members. Now, publicly traded companies will have to accede to the state government’s demands — or risk legal repercussions.

The Chamber of Commerce feels that the law is doing a disservice to applicants in that it will prioritize gender over other types of diversity, such as ethnicity.