Publicly traded companies headquartered in California had until the end of 2019 to place at least one woman on their board of directors, and the law, authored by former Santa Barbara state senator Hannah-Beth Jackson, has had results. In March, the Secretary of State’s office announced the number of women on boards had risen from 282 in 2019 to 311 in 2020
Of the qualifying companies based in Santa Barbara and Goleta, all seven of them had at least one woman on their boards and most had two. The one showing the greatest diversity was Deckers Outdoor Corporation, which included four women among its 10 board members, all of whom reflected the county’s racial composition.
Jackson was pleased to see the number increase, saying, “It should have happened a long time ago.” She recalled the arguments against her bill — that women weren’t qualified, that companies would leave the state, and that lawsuits would be filed.
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Of the 625 qualifying companies in 2019 (not all report the number of women directors), 22 left California; another six moved their headquarters to California. One lawsuit brought by the conservative group Judicial Watch is continuing through the courts. The suit contends requiring women on boards is an unconstitutional gender-based quota and withstood a challenge that the three plaintiffs had standing to bring the suit late last year. The case is now in the discovery phase.
But the cat may have slipped the bag. Already, big investors like Goldman Sachs are telling companies that if they lack the insight to recognize the value of adding a woman to their boards, they wouldn’t fund them, Jackson said. Similarly, Washington state has a comparable law, 10 other states are considering one, and NASDAQ wants a woman or under-represented minority member on its traded companies in two years’ time, if the Securities and Exchange Commission approves.
The California Partners Project has women on boards in its sights, too. Formed by Jennifer Siebel Newsom, the wife of California’s governor, the project estimates that 97 percent of California’s companies now have at least one woman director. Jackson, who is on the project’s advisory board, wrote her bill to require six-member and larger boards to place two or more women on their boards; that leaves 467 companies that will need to add diversity by the end of 2021.
“Even Credit Suisse, hardly a sympathetic group,” Jackson said, laughing, “even they say companies with women directors bring as much as 45 percent higher share earnings! Just think. Women represent 75 percent of all purchases though they’re 52 percent of the population. They bring different leadership skills, different sensitivities, different life experiences from the ‘bros,’ from the good old white boys,” Jackson said. “It’s a diversity that generates exciting, well-vetted successes among communities that make up the fabric of our society.”
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