California Bill Would Force Companies To Put Women on Board of Directors
Liberal ideology in the form of affirmative action continues to push the envelope in the state of California. The notion that America is the land where opportunity is possible for everyone just doesn’t seem to be enough to satisfy some golden state legislators.
Senate President Pro-Tem Toni Atkins and Senator Hannah-Beth Jackson, both Democrats, wanted to help women ascend the corporate ladder just a bit faster by mandating a minimum requirement for females in corporate boardrooms.
Their bill, SB-826 introduced in January of 2018 would require California-based corporations that sold stock on a major U.S exchange to have not less than one woman sitting on its board by December 31 of 2019.
It further requires a minimum of two female directors on boards of five and three female directors on boards of six or more before the end of 2021.
If this isn’t enough government overreach into the private sector for you, just wait. It also provides punitive fines for those who would not be in compliance.
The Secretary of State will have the authority to levy fines. The income generated by those fines would offset the cost of administering the bill.
A first violation would generate “an amount equal to the average annual cash compensation for the directors of the corporation.”
A second or subsequent violation would generate “an amount equal to three times the average annual cash compensation for the directors of the corporation.”
Not only are they bloating the legislative bureaucracy by infusing this mandate, they might be padding the state coffers as well.
According to studies listed in the bill text, women are the fix to all things problematic in the corporate structure.
Credit Suisse, MSCI and the University of California-Berkely were all cited in the bill text and concluded, among other things, companies with women serving on boards perform better, generate higher earnings, institute stronger governance structures and are risk-averse.
This all sounds pretty good if you’re not looking beyond the surface. However, the other text in the bill points out: “Yet studies predict that it will take 40 or 50 years to achieve gender parity, if something is not done proactively.”
This brings one burning question to mind: Why wouldn’t corporations in a capitalist society already be clamoring to have their boards full of women if all conclusions in these studies were true?
Let’s challenge that this bill suggests legislators in California just don’t believe that women are capable of ascending the corporate ladder and breaking the glass ceiling on their own, without a little help from big government liberals along the way to mandate their success.
Women have been succeeding in corporate America for quite a while. What would former presidential candidate and CEO of Hewlett Packard Carly Fiorina think about this legislative intervention to achieve gender parity?
Last year Fortune Magazine named Geisha Williams as the first Latina CEO to their Fortune 500 list of powerful women. CEO Mary Barra of General Motors, Indra Nooyi of PepsiCo, Meg Whitman also of Hewlett Packard and Ginni Rometty of IBM are all successful women who have risen to the top of large corporations without the help of senators Atkins and Jackson.
What’s next in gender parity mandates? Will we see California do an end run around elective representation to mandate there be an equal number of legislative seats occupied by women?
In 2017 The LA Times listed 53 Fortune 500 companies that made California their home. Combined they brought in $12 trillion in revenue. Is it fair to wonder how many of those companies would stay if the state legislature stuck their nose into those board of directors’ lineups?
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