by The law required companies to place at least one woman on their board by the end of 2019, or face a penalty. California law also requires companies with five directors to have at least two women by the end of 2021, and companies with six or more directors to have at least three women by the end of the same year.
Among the reasons the judge gave for annulling the law: The State “could not sufficiently demonstrate that [the law’s] The use of a gender-based classification was necessary to boost California’s economy, improve opportunities for women in the workplace, and protect California taxpayers, public employees, pensions, and retirees.”
“This disappointing ruling is a reminder that sometimes our legalities do not match our realities,” California Senate President Pro Tem Toni Atkins, co-author of the law, said in a statement. “More women on corporate boards means better decisions and businesses that outperform the competition, that’s a studied and proven fact.”
When the laws, which both in stages in their terms over time, were passed, the expectation was that their effect would be felt beyond company boards of directors in California, as many companies were headquartered there it also operated in other states and internationally.
“Those who still fear women in leadership positions need to work to find out because the world goes on without them,” Atkins said.
Julie Hembrock Daum, who heads the North American board practice at executive and board search firm Spencer Stuart, said both California laws increased the number of women and minorities on corporate boards, particularly on boards that were previously very homogeneous. “Most companies decided to take action even though they knew the laws could be overturned,” Daum said.
Now, without the California mandates, companies may not diversify their boards as much as they were required to under the overturned laws, he said. But she expects them to continue to diversify, if not of their own volition, then under pressure from institutional shareholders. “Base [for diversity] has gone up,” Daum said.
