The push to put more women on corporate boards is gaining momentum – and legislative muscle. California’s Senate passed a bill mandating that public companies based in the Golden State must have at least one woman on their board by the end of 2019. It would be the first law of its kind in the nation.
SB 826, which passed the California Senate just before Labor Day after the state Assembly approved the bill a day earlier, is now before Governor Jerry Brown, who has until September 30 to sign it into law. It pushes the gender envelope even further by requiring that companies with five or more board members ensure that at least two or three of those be women by 2021.
Among public company watchers following the California bill is O’Melvenycorporate partner Shelly Heyduk, who regularly advises publicly listed companies on governance issues, including board member composition.
“Efforts to improve board diversity through private ordering have shown momentum over the past year and have a better chance of taking into account a company’s particular circumstances than a one-size-fits-all legislative mandate,” said Ms. Heyduk, who previously served as in-house counsel at Western Digital Corp.
Ms. Heyduk regularly counsels public companies on SEC reporting and disclosure requirements, as well as shareholder meetings and compliance with proxy rules, and compliance with NYSE and NASDAQ corporate governance requirements, the Sarbanes-Oxley Act of 2002, and related regulations.
California’s proposed law takes aim at slow progress on gender parity in the state’s corporate community – an estimated 25% of California-based public companies have no women board members, while only around 15% of all board seats are held by women, which is below average for Fortune 1000 companies.
It’s part of a broader global push to increase the presence of women on boards. Germany and Italy have both mandated that boards must include women. And two other US states – Massachusetts and Illinois – have resolutions calling for women on boards, though those two initiatives have led to nonbinding resolutions.
Let us know if you’d like to speak further with O’Melveny’s Shelly Heyduk on best practices for companies seeking to add more women to their boards, in California and elsewhere.