California's Unprecedented Leap to Advance Gender Diversity on Corporate Boards

May 20, 2022

"Corporations influence everything from income equality, communications, community health, the environment, and responses to calls for gender and racial equity. That's why it's imperative to have women's perspectives represented in the rooms where these decisions are made…SB826 is a highly effective tool for addressing gender discrimination. As a result, we've seen increased gender diversity on California boards, which has positively impacted companies' environmental, social, and governance outcomes, as well as their bottom lines. We are not rolling back the progress we've made."

—Jennifer Siebel Newsom, California First Partner and CPP co-founder

The gist:

The California Partners Project (CPP), “released its fourth report tracking the implementation and impacts of Senate Bill 826,” that required “all public companies in California to have one to three women on their board of directors, depending on board size.” The law that “addresses the underrepresentation of women on public company boards” is unfortunately “the subject of a recent adverse court ruling that is being appealed by the State of California.”

Why unfortunate? Because look at the gains that are now in jeopardy.

The Stats:

• Prior to the enactment of SB826 in 2018, California's public companies lagged the national average in board gender diversity. Now California, with 32% of seats held by women, is a world leader in gender diversity on public company boards, ahead of the United States as a whole and the European Union.

• CPP's data shows companies are overwhelmingly complying with the law, nearly tripling the number of public company board seats held by women – from 766 in 2018 to 2,055 today.

• Among the California companies studied, those with three or more women on their board had 29% higher revenue in 2021 than those with fewer women board directors.

The loss of this law and the data it provided is unfortunate on another level. Because it also reveals where there is still work to be done.

•  58% of California's public companies do not have any women of color on their board and,

• Latinas remain the most underrepresented group. Latinas comprise 20% of California's population and hold only 1.5% of public company board seats.

Read the whole report here.