A bill passed by the California legislature last month was signed into law on Sunday by Governor Jerry Brown requiring publicly traded firms to have at least one woman on their boards of directors by the end of 2019.

The bill was part of a set of legislation that looks to “protect and support women, children, and working families,” the governor’s office said in a release.

Companies based in California with five directors will be required to add two women by the end of 2021. Companies with six or more directors will be required to have at least three women by the end of 2021.

The law is the first of its kind in the United States, but similar rules have been adopted across Europe.

In 2017, Pennsylvania passed a resolution urging public and private companies to have a minimum of 30% women on their boards by 2020, but that law does not impose penalties.

“Given all the special privileges that corporations have enjoyed for so long, it’s high time corporate boarding include the people who constitute more than half the ‘persons’ in America,” said Governor Brown said in a statement.

According to BoardEx data, an estimated 29% of the 664 public companies headquartered in California have all-male boards currently. According to a study from PwC, a majority of the companies in the S&P 500 have at least one woman on their boards.

Proponents of the law point to studies that show companies with women on their boards are more profitable and more productive than those that have all-male boards of directors.

“With women comprising over half the population and making over 70% of purchasing decisions, their insight is critical to discussions and decisions that affect corporate culture, actions, and profitability,” California state Senator Hannah-Beth Jackson told The Wall Street Journal last month.

Women make a large majority of consumer purchases but have so far not been well represented in board rooms.

Photo: Getty Images

, , , ,

Leave a Reply

Your email address will not be published. Required fields are marked *