A new tool reveals the lack of Latino representation on California’s public boards

In an effort to measure the impact of California’s new board diversity law, the Latino Corporate Directors Association has launched a new tool that will measure the number of Latino directors in California’s public board rooms.

The California Boardroom Equity Scorecard and Tracker, which is publicly accessible, will keep tabs on the number of Latinos on boards of directors of public companies headquartered in The Golden State. The tracker will be updated on a quarterly basis.

As the number of Latinos grows on a state and national level, along with their spending power, Latinos are still referred to as a “forgotten minority,” according to Roel Campos, board chair of the Latino Corporate Directors Association.

“Latinos in America are highly qualified for boards for all industries,” he said at a press briefing this week. “There’s so many qualified Latinos or Latinas in the community.”

Diverse directors, he said, can also contribute to a company’s bottom line.

Campos cited a McKinsey & Company study of over 1,000 companies that found businesses in the top quartile for gender diversity were 21% more likely to have higher financial returns. Companies in the top quartile for racial and ethnic diversity were 33% more likely to have higher financial returns.

Companies with the least gender and ethnic representation, according to the study, were more likely to under-perform.

Notable public companies headquartered in California without a Latino board director include the retail company Gap, streaming service Netflix and casual eateries that serve Mexican-inspired food like Chipotle Mexican and El Pollo Loco Holdings, Inc., according to the board tracker.

“We’re going to count, we’re going to measure and we’re going to publicize,” Campos said.

The board diversity law, known as Assembly Bill 979, is meant to increase the number of board directors from under-represented communities in the state. It was signed into law by California Gov. Gavin Newsom in September.

The law, introduced by Assemblyman Chris Holden, D-Pasadena, recognizes under-represented directors as individuals who self-identify as Black, Latino, Asian American, Pacific Islander, Native American, Native Hawaiian, Native Alaskan or of the LGBTQ community.

The law requires corporations to have at least one director from an under-represented community by the end of 2021 — or face fines between $100,000 and $300,000.

Despite Latinos making up the largest ethnic population in the state — an estimated 40% of the state population — only 2.1% of board seats of the state’s 674 public companies headquartered in California are held by a Latino or Latina director, according to the organization’s report. About 86% of California’s public boards don’t have a Latino director and 37% of boards are all-white boards, the report shows.

“Representation matters,” said Democratic Los Angeles state Sen. Maria Elena Durazo at a press briefing, “in all levels of decision making.”

She called it an “embarrassment” for the state to have few Latinos serving on public boards, despite a pool of quality candidates.

“We brag about how California embraces diversity, yet your numbers show we are at best given a socially distanced hug,” she said. “Our state and our nation’s financial well-being is now dependent on the growth generated by Latino workers, entrepreneurs and business owners.”