SACRAMENTO, Calif.–While it wouldn’t be applicable to credit unions, new legislation in California might one day lead to mandatory changes in credit union boards.
With Gov. Jerry Brown’s signature on SB 826, California will become the first state in the nation to require public companies based within the state to have at least one woman on their boards.
If Brown signs the bill, the one-woman mandate will take effect by the end of 2019. By the end of 2021, the bill calls for at least two women on the board if a company has five directors, and at least three women if it has six directors. Companies would be fined for non-compliance, according to the San Jose Mercury News.
“One-fourth of California’s publicly traded companies still do not have a single woman on their board, despite numerous independent studies that show companies with women on their board are more profitable and productive,” the bill’s author, Sen. Hannah-Beth Jackson (D-Santa Barbara), said in a statement. “The time has come for California to bring gender equity to our corporate boards.”
Opposition to Bill
The bill was opposed by business groups and the California Chamber of Commerce, which said it violates the state and federal constitutions and is discriminatory against men, and warned that it could lead to legal battles, according to the Mercury News.
The Mercury News cited data showing 17% of companies in the Russell 3000 Index, which includes most public companies on major U.S. stock exchanges, had all-male boards in the second quarter, according to Equilar research cited by the Wall Street Journal. California, home to some of the country’s biggest companies, had 86 companies in the Russell Index that don’t have women on their boards, the data show.
Under the legislation, companies that fail to file information about their board directors with the Secretary of State in a timely manner would also be fined $100,000.