The Briefing Room: California Becomes the First State to Require Women on Corporate Boards

On Sept. 30, Governor Jerry Brown signed bill SB-826, thereby making California the first state to require women on the corporate boards of publicly traded companies. All companies that fall under this law are required to have at least one woman on their board by 2019. Boards with five directors must add two women by 2021, and boards with six or more directors must add three women by 2021, as well. Corporations that fail to meet these standards will by fined $100K for their first offense and $300K for subsequent violations.

California Democratic Senator Hannah-Beth Jackson, co-author of SB-826, believes this measure will not only improve the gender-diversity of California corporations, but in addition, will improve their production and productivity, as well.

"With women comprising over half the population and making over 70% of purchasing decisions, their insight is critical to discussions and decisions that affect corporate culture, actions and profitability," she said in an interview with The Wall Street Journal.

However, the California Chamber of Commerce fears this bill may force corporations to prioritize gender-diversity over other forms of diversity, such as race, for the sake of meeting requirements. Furthermore, they argued that government regulation over gender-diversity of corporations would lead to the selection of unqualified female candidates over qualified male ones, creating discrimination against men in the hiring process.

This is the first law of its kind here in America, though, similar (and much stricter) laws exist in European countries such as Norway.