AB 979 would put people of color on corporate boards in California. It deserves support
While corporations talk a good marketing and sales game to people of color, they usually fall far short of actually letting them into the boardroom. The door may not be locked, exactly, but it’s got barbed wire and broken glass in front of it.
In this moment in our nation’s history, where the drive for a more inclusive country have put the concerns of Black Americans, Latinos, Asians Americans, Pacific-Islanders, Native Americans, Native Hawaiians and Alaska Natives front and center, the issue of getting seats in the corporate suite has reached a new, encouraging crescendo in California.
Assembly Bill 979 would open the boardroom door wider.
Corporate boards have never been a bastion of diversity. According to a 2018 Harvard University study, whites comprise 77% of the seats on corporate boards in the United States. A July 2020 Latino Corporate Directors Association study showed 35% of the 662 California-based boards were entirely white. Of the 511 women board members appointed since the enactment of Senate Bill 826, 77.9% were white.
That’s not remotely acceptable in 21st century America or California.
AB 979 “would require a corporation to have one director from an under-represented group for companies with less than four members on their board of directors. Corporations with more than four directors, but fewer than nine, would have a minimum of two under-represented directors. A corporation with nine or more directors would require at least three directors from an under-represented community,” per to reporting by The Sacramento Bee’s Kim Bojórquez.
The passage of AB 979 will build on existing California law. Gov. Jerry Brown signed Senate Bill 826 in 2018. It requires at least one woman sit on any corporate board that’s headquartered in the Golden State.
AB 979 requires that two minority group members shall be required to sit on all California-based corporate boards. If that threshold isn’t met, the corporation would face a $100,000-$300,000 fine.
The chief sponsor of AB 979, Asm. Chris Holden, D-Pasadena, tried a similar measure three years ago, directed at Silicon Valley tech firms, but it fell short.
There is opposition. A Pacific Legal Foundation lawyer, Anastasia Boden, made the almost laughable observation that AB 979 “forces people to make choices on the basis of race or sex in order to gain those numbers, which in themselves are not realistic about a world full of equal opportunity,” she said.
We’re not sure upon which “world full of equal opportunity” the Pacific Legal Foundation currently resides, but on our planet, minority groups are still fighting to get the 1965 Voting Rights Act extended and the Trump Administration is working overtime to make sure minority communities don’t have equal access to the simple act of casting a ballot. Police regularly harass or kill Black and brown Americans for no apparent reason other than their race.
That’s not a world full of opportunity. It’s a dystopian death star.
Putting people of color in the boardroom isn’t just right, it’s better for business. According to The Bee, “a 2018 McKinsey & Company study of over 1,000 companies in 12 countries found that companies 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.”
AB 979 is being heard by the Senate Appropriations Committee Thursday. We encourage the California State Legislature to pass the bill and strongly urge Gov. Gavin Newsom to sign it.
This story was originally published August 19, 2020 at 5:00 AM.