Among the largest 3,000 largest U.S. publicly traded companies, only about one in five board members are women, according to Equilar, which tracks corporate governance data. And it says nearly one in 10 boards have no women.
In 2018, California became the first state to mandate gender diversity in boardrooms with the passage of a bill called SB 826. The measure, requires publicly traded companies based there to have at least one female board director — or face a $100,000 fine.
At the time, the bill’s sponsor, State Sen. Hannah-Beth Jackson, called it a “giant step forward for women.” Multiple studies show that corporations with female directors are more profitable, Jackson noted.
If supercharging the push toward gender parity on boards was the goal, it appears to be working.
The nonprofit advocacy group 2020 Women on Boards has been tracking changes at more than 400 major California companies. Before the law, 75 firms lacked a female board member, the group found. By the middle of 2019, two-thirds of those companies had added at least one woman to their boards. The law gave companies until Dec. 31, 2019, to comply.
A report this month by the California secretary of state found that 282 publicly held corporations in the state reported compliance with the law, up from 173 in July 2019.
The idea is gaining traction elsewhere, where similar legislation being introduced in Massachusetts, New Jersey and Washington.