California Outlaws All-Male Corporate Boardrooms

Starting next year, it will be illegal in California for corporate boards to look like the Republican membership of the Senate Judiciary Committee.

Gov. Jerry Brown Sunday signed Senate Bill 826 into law, requiring all publicly traded companies headquartered in California to at least have one woman on their board of directors, USA Todayreports. Companies with all-male boards must invite a woman to the table by the end of 2019. Corporations with at least five board members must have two female directors by 2021, and those with at least six members must have three, or face financial penalties.

This legislation makes California is the first state to impose gender quotas on corporate boards

Critics of the law say it represents too much government interference in the workings of private businesses. However, Brown, citing the hearings surrounding U.S. Supreme Court nominee Brett Kavanaugh, said it was best for the state.

"There have been numerous objections to this bill and serious legal concerns have been raised,'' Brown explained in a statement. "I don't minimize the potential flaws that indeed may prove fatal to its ultimate implementation. Nevertheless, recent events in Washington, D.C. - and beyond - make it crystal clear that many are not getting the message.'' This appears to be a reference to the U.S. Senate Judiciary Committee hearings on Kavanaugh's nomination. All Republican members of the committee are male.

State Sen. Hannah-Beth Jackson of Santa Barbara said the impetus behind the legislation - which she co-authored - was the lack of growth in the number of women in California's corporate boards. In 2013, women represented 15.5 percent of board members at publicly traded companies based in the state, reports the National Association of Women Business Owners. In 2018, they make up 16 percent.

"I think this is a giant step forward not just for women but also for our businesses and our economy,'' Jackson told USA Today. "It's a win-win-win.''

However, Jackson acknowledged that even though the bill is now a law, it still has opponents. The California Chamber of Commerce, which opposed the legislation, questioned its constitutionality, as it affects companies that are based in California even if their business crosses state lines.

The law's impact on big international businesses, particularly in Silicon Valley, underscores its consequence. Facebook and Google, which currently have two female board members each, and other tech giants headquartered the area, such as Adobe, Apple, Netflix, Tesla, and Intel, are now subject to the law.

California houses 117 companies on the Russell 3000 Index, which includes most companies traded on major U.S. stock exchanges, that have no women on their boards. They include Skechers USA Inc. and TiVo Corp.

"It's my hope that corporations, rather than fight this, will acknowledge its value and take the lead on pulling together and bringing greater diversity into their boardrooms,'' Jackson concluded.