Does the board member have to been born a female or wait to decide?
Via CNN:
State legislators passed a bill Wednesday that would require publicly-traded companies headquartered in California to place at least one woman on their board by the end of next year — or face a penalty.
Research shows that female representation on boards is key for women’s advancement in corporate America. Women on boards are more likely to consider female leaders for the C-suite and choose more diverse candidates for the board itself.
If the bill is signed into law by California governor Jerry Brown, it would be the first state to take such a step. Unlike some European countries, the United States doesn’t mandate female representation on company boards. A majority of companies in the S&P 500 have at least one woman on their boards, but only 25% have more than two, according to a study from PwC.
But setting quotas for representation can be controversial, says Vicki W. Kramer, lead author of the landmark 2006 study, “Critical Mass on Corporate Boards.” Opponents argue that pressure from quotas will lead to unqualified female members and potential discrimination against male candidates.
When quotas are not set, however, companies fail to diversify their ranks enough, Kramer says. She points to more “aspirational” legislation in other states, like in Pennsylvania, where a 2017 resolution urged both public and private companies to have a minimum of 30% women on their boards by 2020. But without teeth in the law, Kramer says, better numbers won’t follow.
“That’s the big thing: will it change the numbers?” Kramer says. “It takes a lot of pressure, but that has to be sustained pressure and so far, it hasn’t been enough.”
Kramer cautions this legislation — if it passes — is only a starting point and it’s a weak one compared to the laws in Norway and other European countries, which require a certain percentage of women on boards. For larger Norwegian companies, the legislation requires that women make up as much as 40% of the board.
“What we see in Europe is once these mandatory quotas have been in place, there’s been a significant increase,” says Anna Beninger, senior research director and corporate engagement partner at Catalyst, a nonprofit studying women and work. “In essence, when organizations are required to make progress, required to follow these regulations, they do — and the progress happens.”