VEA’s Annalisa Barrett writes:
Today, California’s Governor Brown signed California Senate Bill 826 which requires publicly-traded companies with principal executive offices in California to have women on their boards. Specifically, all such companies will have to have at least one woman on their boards by December 31 2019, and one, two or three women – depending on board size – by December 31, 2021.
I examined data provided by Equilar Inc. for the companies headquartered in California which were in the Russell 3000 Index* and found that, based on board composition as of September 2018, 377 companies will have to add female director(s) their boards in order to be in compliance with SB 826 by December 31, 2021.
66 companies would have to add three women to their boards
175 companies would have to add two women to their boards
136 companies would have to add one woman to their boards
However, the numbers above do not reflect all of the companies headquartered in California since there are many that are too small to be in the Russell 3000 Index. From my recent research on Microcap Board Governance, the majority of microcap companies (i.e., smaller than $300M in market capitalization) do not have women on their boards, so many more companies have to make changes to be in compliance with SB 826. I am currently conducting research on the microcap companies headquartered in California to determine how many will have to add women to their boards as well. Stay tuned…
* Based on the Russell 3000 Index as of June 30, 2017 (i.e., prior to the 2018 reconstitution)