Few women sit at corporate board tables, to the detriment of the company bottom lines and California’s economy.
One-fourth of all publicly-held corporations in California have no women serving on their boards of directors. And women occupy 15.5 percent of all board seats at the state’s publicly held companies, compared to the national average of 16.2 percent.
Fortunately, the Legislature has an opportunity to improve that gender gap. The state Senate recently passed Senate Bill 826, which will be considered soon by the Assembly.
California would be first in the nation to require proactive change. The bill requires that at least one woman be on boards of publicly held companies in California by the end of 2019. Existing male board members would not be replaced, but if no men leave, a new seat would be added for a woman. This legislation does not apply to private companies.
The positive impact of female directors on the corporate bottom line is well documented by various studies. A Credit Suisse study found that businesses with women directors outperformed those with none on return on equity and average growth over six years. Institutional investors, including CalPERS and CalSTRS, are clamoring for more women on boards to generate better returns.
Yet the California Chamber is opposing SB 826, labeling the bill as anti-business. That is puzzling: What is not to like about the higher market returns and superior profits?
Corporate directors receive cash and stock annually, resulting in many men serving on boards for decades and recruiting their business friends, usually men, when there is a board vacancy.
Absent meaningful action taken to address this imbalance, the U.S. Government Accountability Office indicates it could take more than four decades for women to be on par with men in corporate boardrooms.
Five years ago, the Legislature approved a resolution urging companies to voluntarily address this issue, but the needle barely moved. That is why SB 826 is needed.
Women are more than ready for corporate board positions. They are collaborative leaders and agents of change. We need that now, like never before.
Anne Staines, president of Sagent Marketing in Sacramento, is president of the National Association of Women Business Owners California and can be contacted at Anne@SagentMarketing.com. Angela DePaoli, president of Bargas Environmental Consulting, is president of NAWBO Sacramento Valley and can be contacted at email@example.com.