California has made history in the last few years for passing legislation aimed at diversifying corporate boardrooms with more women and people from different ethnic backgrounds.
Senate Bill 826, which was passed and signed by former Gov. Jerry Brown in 2018, dictates that all public companies will need to have at least one to three women on corporate boards by the end of 2021….
According to a Women on Boards report released by the Secretary of State’s office this month, 311 public companies have complied with the law that requires them to have at least one woman on the board.
Annalisa Barrett, a professor of corporate governance at the University of San Diego and a senior advisor to the KPMG Board Leadership, says prior to SB 826 being enacted, about 30% of California headquartered publicly traded companies had all male boards. In 2020, that number went down to 5%.
She notes the bill has elevated the conversation around the importance of diversity in the boardroom.
“Having a variety of viewpoints around the boardroom table as these important issues are being deliberated really does lead to better decision making,” Barrett explained. “There are more and more studies that have come out and show the benefits that this type of diversity brings to the financial performance of the companies.”