A new law in California sets quotas for the minimum number of women required to be on a company's board of directors.
Companies who fail to meet the law's requirements face hefty fines:
- $100,000 for a first offense
- $300,000 for a second offense
The law requires at least one woman on the board of every public company with primary operations in California by the end of 2019. And when the law becomes stronger in 2021, boards will be required to have either two or three women based on the size of the board.
CNet crunched the numbers on a few of the tech giants that will eventually need at least 3 female board members or face fines:
"This new law will affect some of Silicon Valley's biggest names. Facebook, for example, has a nine-member board, but only two women (Sheryl Sandberg and Susan Desmond-Hellmann). Apple has eight people on its board, but only two women (Andrea Jung and Susan L. Wagner). Alphabet, Google's parent company, has 11 members, but only two women as well (Diane Greene and Ann Mather)."
There is one household name that already has exceeded the law's requirement. Twitter currently has four women on its board of directors.
Is it legal for California to force gender quotas on companies?
Jessica Levinson, a clinical professor of law at Loyola Law School in Los Angeles told the LA Times:
“I’m not at all convinced it would pass legal muster. It’s a clear gender preference in that you are saying you need to single out women and get them on boards. The question is can you make that preference and will it hurt men?”
California Governor Jerry Brown issued a signing message as he approved SB 826 into law. He admitted the law may be on questionable legal ground but explained why he decided to sign it, anyway.
“There have been numerous objections to this bill, and serious legal concerns have been raised,” Brown said. “I don’t minimize the potential flaws that indeed may prove fatal to its ultimate implementation.
Given all the special privileges that corporations have enjoyed for so long, it's high time corporate boards include the people who constitute more than half the "persons" in America."
