California Boards Must Add Women

Approximately 165 California-based publicly traded companies who have all-male boards of directors will have to add at least one female director before the end of 2019 according to a bill signed by Governor Jerry Brown.

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What To Know

Rules are very strict and based on the size of the board. For example, a board of five directors must have at least two females and a board with six or more directors must have at least three females. The current average of the largest company boards is about 25 percent women while smaller companies average female directors of about 11 percent. Private companies without shareholder pressures average roughly 9 percent of the board members being female.
The new legislation is aimed at bringing diversity into the boardroom, and companies are, of course, concerned with recruiting and maintaining directors who are well-qualified, whether they are male or female.
2014 statistics do seem to support the fact that companies with at least one female director boast a higher return on equity than those with all male boards. In European countries, gender diversity requirements for boards or directors are quite common.  
 

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