Governor Brown’s New Corporate Board Bill Undermines Women’s Capabilities
This past Sunday, California Governor Jerry Brown signed into order the last remaining bills of his tenure as he prepares to exit the office this November after serving four terms. One of the more controversial bills he signed was SB 826, which mandates publicly traded corporations to include at least one woman on its board of directors by the end of 2019. Additionally, boards with five members must have, at minimum, two women and boards of six or more are required to have at least three women board members by 2021. Public companies face fines of up to $300,000 if they fail to comply. The question is whether this is legally sound and in the pursuit of true gender equality, or if the bill is unconstitutional and undermines women’s capabilities. Another equally important question is raised as well. Should women advocate for the equality of outcome, where economic inequalities within society are settled by the intervention of the government, or rather the equality of opportunity, where women are not barred by prejudicial barriers but have the liberty to decide their own economic outcomes? Women should advocate for equality of opportunity, not equality of outcome.
The bill has been praised by those who agree with Brown that women should have equal outcome in the workplace. Pew Research reported in 2013 that only 1 in 6 Fortune 500 company board members were women. However, research from Catalyst found that Fortune 500 companies with higher female representation on their corporate boards outperform in return of sales, equity and invested capital. There are also similar laws in place in other countries. Germany mandates 30 percent of corporate boards should be women whereas France and Norway require that women must make up 40 percent of corporate boards. The inclusion of women on corporate boards has shown to be beneficial to companies and their bottom line, and there are plenty of women who are qualified and capable of being on these boards. However, others argue the execution and implications of this bill are what make it problematic.
CEO and president of the Orange County Business Council Lucy Dunn stated: “Rather than celebrate the competitive advantage women bring to positions of leadership in a company, it relegates them to placeholder status.” Others like Dunn argue women should not merely be used as checkmarks for government-mandated diversity quotas, but should be expected to earn their position at a company like their male counterparts. The California Chamber of Commerce also disapproved of the bill, stating corporations should be able to appoint board members without government interference and adding the bill would make it more difficult to hire people on other aspects of diversity. Legal scholars have also singled out problems in implementing a law like this in the United States, referring specifically to whether the government can enforce special treatment on the basis of sex within private corporations. Additionally, some caution that a bill like Brown’s could damage natural, market-based efforts to accelerate social change for women. On average, large European companies continue to have fewer women in senior executive roles than their U.S. counterparts, despite government efforts to mandate change.
Overall, I don’t think the bill will stand, considering the shaky legal ground it stands on, which Brown has acknowledged. It appears to be more of an attempt at virtue signaling than a genuine solution from the Governor, an effort to be remembered as more progressive and favorable as he exits office this November. Brown stated he signed the bill because of the recent sexual assault allegations against Supreme Court nominee Brett Kavanaugh, but I don’t see a logical correlation between the current situation happening inside the beltway and signing a bill mandating a gender quota for corporate boards in California, other than good aesthetics. While I understand this bill is designed to give women “a seat at the table”, ultimately it undermines women and their capabilities and sets precedent for the equality of outcome over opportunity. Brown’s bill implies women need extra help attaining their positions on corporate boards, which is the opposite of empowering women to earn their place at these powerful positions. Pew Research found the most important leadership traits are: honesty, intelligence, decisiveness, organization, compassion, innovation and ambition. In this same poll, women were found to be more compassionate, organized and honest while both sexes were viewed as generally equal in the other characteristics. Women have the potential to provide competitive advantages to corporate boards as well as the opportunities to achieve their goals but should not be given special treatment or advantages to acquire these positions.
Rebecca Rinaldi is a fourth year Criminology, Law and Society major. She can be reached at email@example.com.