We Californians are generally proud that our state leads in most categories – but California is not exemplary when it comes to women on corporate boards. UC Davis research last year showed that almost half (44.8 percent) of the 400 largest publicly held corporations in California have no women on their boards!
The state Senate recently passed a resolution urging all publicly held corporations in California to add women directors over the next three years. Senate Concurrent Resolution 62 should come up for an Assembly vote before the session ends this week. If it passes, California would become the first state whose Legislature has made a statement about this issue – because it’s all about the economy.
Credit-Suisse research over a six-year study released a year ago made the business case that corporations with women directors significantly outperform those that don’t. CalSTRS and CalPERS include gender balance among factors for evaluating companies in which they invest. Sponsored by the National Association of Women Business Owners-California, which represents issues and interests affecting 1.3 million women entrepreneurs in the state, SCR 62 is authored by Sen. Hannah-Beth Jackson of Santa Barbara, vice chair of the bipartisan Legislative Women’s Caucus, and sponsored by the National Association of Women Business Owners – California, which represents interests and issues affecting 1.3 million women entrepreneurs in the state.
The resolution calls for a three-year goal (not a quota) that at least three women should be on every corporate board of nine members or more. Boards with five to eight seats should have a minimum of two women; boards with four or fewer seats should have at least one woman. A resolution is a symbolic show of support for a concept, but does not carry the force of law behind it.
Citing a study titled “Critical Mass on Corporate Boards: Why Three or More Women Enhance Governance,” SCR 62 says, “Having three women on boards creates an environment where women are no longer seen as outsiders and are able to influence the content and process of board discussions.” One woman on board is a token, two is a conversation and three actually can make an impact.
One of the most outstanding examples is Sempra Energy, No. 281 on the Fortune 500 list this year and parent company of Southern California Gas Co. and San Diego Gas & Electric. Debra L. Reed is chairman and chief executive, and there are two other women directors, Lynn Schenk and Kathleen Brown.