THE BEAM // Special Edition: Governance 1.2
Gender Diversity on Boards
According to a recent Bloomberg article, California is on its way to making history as the first state to pass a law mandating female board members for public companies. If enacted, the bill (SB 826) would require all California-based public companies to have at least one woman on their boards of directors by the end of 2019 as well as additional female directors, determined by the size of the company, by the end of 2021.
California has been on the leading edge of legislation regarding gender equity in the workplace; it was one of the first states to adopt a nonbinding resolution urging companies to diversify their boards (2013) and one of the first to enact a law banning employer inquiries into an individual’s salary history (2017). It will be interesting to see if this bill passes (it’s currently in committee), and if it does, if other states respond by proposing similar laws.
At LymanDoran, we firmly believe in the importance of providing equitable access to leadership opportunities and are encouraged to see the conversation around this issue is continuing to gain momentum. Although California’s proposed legislation is restricted to California-based public companies, we are hopeful increased awareness will inspire public and private companies across the country to reflect on the diversity of their own boards and leadership teams.
Research has consistently shown that increased diversity within boards of directors and leadership teams leads to better financial performance. However, we have seen first-hand that in order to truly be successful, it is essential that leaders create a culture of inclusion where people are encouraged to contribute and know their voices are valued. Creating this culture is a process and there’s no single solution that will work for every company, but we would encourage you to spend time evaluating your practices and consider what you can do as a leader to promote an inclusive culture within your organization.
To learn more about our Governance practice, click here.