By Tony Chapelle
By next Sunday, California’s governor must decide if he’ll sign a bill that would make the Golden State the first in the nation to require every public company based in the state to seat at least one woman on its board.
If passed, the new law would impose financial penalties on companies that did not comply. Both houses of the state’s legislature approved the action last month.
Yet many governance experts including directors, attorneys and consultants are divided about both whether Governor Edmund “Jerry” Brown Jr. will sign the bill as well as its merits.
The governor isn’t saying what he’ll do. When Agenda requested an answer, his deputy press secretary Brian Ferguson responded via e-mail, “Our office doesn’t typically comment on legislation currently pending before the governor.”
Under the bill, firms headquartered in California would have to have at least one woman director by the end of 2019.
In addition, the law would require companies to seat progressively more female directors in the future. By the end of 2021, a company with five or more board members would have to have at least two female directors. If the corporation had six or more directors, at least three would need to be females.
Advocates for the move call it the vanguard in a coming wave of similar laws around the country. “My only question is how fast it will catch on nationwide,” says Keith Meyer, who heads the CEO and board recruiting practice at executive search firm Allegis Partners. Given that Massachusetts and Illinois already tried to pass similar laws and still have nonbinding resolutions, he says that it would only take a handful of the most corporate-heavy states to gain critical mass.
Meyers calls California’s approach “thoughtful” because it’s adding, not subtracting, directors, he says. “You can create another board slot around the table.”