Published 2:11 PM EDT Oct 1, 2018
SAN FRANCISCO -- California's law requiring publicly held companies to require women on their boards, a first in the nation, faces a legal fight. But it's got support, particularly from women, according to a new survey.
Nearly all of the Californians polled -- 95 percent -- say corporations are not doing enough to add more female directors and 71 percent said they support the bill signed into law by Gov. Jerry Brown on Sunday night, a new survey from TheBoardlist found.
Of those surveyed outside of California -- 98 percent -- say they'd like to see a similar bill passed in their own states. No other state has passed legislation requiring quotas on corporate boards though a handful have approved nonbinding resolutions. California's bill was opposed by business groups including the California Chamber of Commerce, which argued the imposed quotas were likely unconstitutional.
TheBoardlist, an organization which highlights women who are qualified to sit on corporate boards, says the survey polled 250 people, mostly women. The survey found that 40 percent of men versus nearly 80 percent of women support the new law, a result that TheBoardlist says reflects differing opinions on how to increase the representation of women on boards
Driving support for the new California law: 42 percent of respondents said diverse companies are more profitable and 38 percent said women who have proven their corporate chops should be given positions they've earned, according to the survey.
Research shows that companies with at least one female director perform better than their all-male counterparts yet the percentage of women on corporate boards in California was 16 percent this year, barely budging from 15.5 percent in 2013.
Of those who didn't support the new law, 37 percent cited government overreach. There was also a sharp political party divide, with less than half of Republicans supporting the new law versus 85 percent of Democrats.
The law applies to corporations whose "principal executive offices" are in California. By the end of 2019, those companies must have at least one woman on their boards and by 2021, they must have a minimum of two or three women depending on the size of their boards. Companies that don't comply can be fined hundreds of thousands of dollars.
The California law may face legal hurdles. But in signing it, Gov. Brown made reference to the Senate Judiciary Committee's recommendation of Brett Kavanaugh's nomination to the Supreme Court.
“There have been numerous objections to this bill and serious legal concerns have been raised,’’ Brown said in a statement. “I don’t minimize the potential flaws that indeed may prove fatal to its ultimate implementation. Nevertheless recent events in Washington, D.C. — and beyond — make it crystal clear that many are not getting the message."
TheBoardlist CEO Shannon Gordon says quotas have pros and cons but the slow progress to increase the number of women at the top of corporate America demands action.
Men hold all the board seats for a quarter of the publicly traded companies in California and national numbers aren't any better, with only one woman holding only one in six board seats in companies in the Russell 3000.
"At this rate, we won’t reach gender parity until 2055," Gordon said.
Quotas have proven effective. In France went from holding 12 percent of board seats in 2010 to 43 percent in 2018 of companies in the SBF 120 index after a 40 percent quota was adopted in 2011. Similar trends have been observed elsewhere in Europe.
"I think this is a giant step forward not just for women but also for our businesses and our economy," State Sen. Hannah-Beth Jackson, a Democrat from Santa Barbara who co-authored the bill, told USA TODAY. "It’s a win-win-win."