10/2/2018 Gov.

Jerry Brown signs bill requiring California corporate boards to include women - Los Angeles Times

3 FREE MONTHS LOG IN

TOPIC S
Offer ends 10/2

FREE TRIAL | TRY 3 FREE MONTHS!

After Ford testifies she was Here's what sexual assault If Christine Blasey Fo
sexually assaulted, experts say you should keep testimony stirred up
Kavanaugh responds with… in mind as Christine Blase… memories, here's wh

POL ITICS

By PATRICK MCGREEVY
SEP 30, 2018 | SACR AM ENTO

Gov. Jerry Brown talks to Senate leader Toni Atkins of San Diego after a 2015 news conference. Atkins
wrote a bill to require corporate boards to include women. (Rich Pedroncelli / Associated Press)

http://www.latimes.com/politics/la-pol-ca-governor-women-corporate-boards-20180930-story.html# 1/6
10/2/2018 Gov. Jerry Brown signs bill requiring California corporate boards to include women - Los Angeles Times

Gov. Jerry Brown on Sunday signed a bill into law that makes California the first
state to require corporate boards of directors to include women, saying that despite
potentially “fatal” legal problems in the measure, it is time to force action.

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

The new law requires publicly traded corporations headquartered in California to

include at least one woman on their boards of directors by the end of 2019 as part of
an effort to close the gender gap in business.

By the end of July 2021, a minimum of two women must sit on boards with five
members, and there must be at least three women on boards with six or more
members. Companies that fail to comply face fines of $100,000 for a first violation
and $300,000 for a second or subsequent violation.

Business groups have questioned the legality of a state imposing such requirements
on corporations, many of which are incorporated in other states. But Brown was not
persuaded by the opposition.

He copied his signing letter to the U.S. Senate’s Judiciary Committee, which has
advanced Judge Brett Kavanaugh’s nomination to the Supreme Court to the full
Senate despite testimony by a woman who said he groped her when they were in high
school.

“There have been numerous objections to this bill, and serious legal concerns have
been raised,” Brown said. “I don’t minimize the potential flaws that indeed may
prove fatal to its ultimate implementation. Nevertheless, recent events in
Washington, D.C. — and beyond — make it crystal clear that many are not getting the
message.”

The new law may, in fact, be vulnerable to a court challenge, said Jessica Levinson, a
clinical professor of law at Loyola Law School in Los Angeles.

“I’m not at all convinced it would pass legal muster,” she said. “It’s a clear gender
preference in that you are saying you need to single out women and get them on
boards. The question is can you make that preference and will it hurt men.”

http://www.latimes.com/politics/la-pol-ca-governor-women-corporate-boards-20180930-story.html# 2/6
10/2/2018 Gov. Jerry Brown signs bill requiring California corporate boards to include women - Los Angeles Times

Read Gov. Brown's letter on signing SB 826, requiring corporate boards

to include women >>

A quarter of California’s publicly traded companies do not have a woman on their

boards, according to Hannah-Beth Jackson (D-Santa Barbara), who introduced the
legislation with Senate President Pro Tem Toni Atkins (D-San Diego).

”The time has come for California to bring gender diversity to our corporate boards,”
Jackson said in a statement. “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.”

There are 377 California-based companies on the Russell 3000 stock index of large
firms with all-male boards that could be affected by the new law, said Annalisa
Barrett, a clinical professor of finance at the University of San Diego's School of
Business. Hundreds of smaller firms will also be affected by the law, she said.

TiVo’s seven-member board is all male, as is the five-member board of Stamps.com,

which responded to a Times question on the new mandate with a statement saying it
“is reviewing the law but otherwise has no comment at this time.”

Those concerned about the lack of gender equity in the boardroom include Shannon
Gordon, the CEO of theBoardlist, which connects executives and investors with
qualified women who may not otherwise be considered for board appointments.

“The problem is extensive,” Gordon said. “Given the numbers, it’s clear that we
haven’t made as much progress as we’d all like to see. We are on pace right now to
reach gender parity in boardrooms by 2055. So we are just not where we need to be.”

The legislation is opposed by more than 30 business groups, including the California
Chamber of Commerce, which said it appears to violate existing law and the state and
U.S. constitutions because it will “displace an existing member of the board of
directors solely on the basis of gender.”

The coalition of opponents sent a letter to state officials saying they are committed to
workplace diversity, but added, “We are concerned that the mandate under SB 826
that focuses only on gender potentially elevates it as a priority over other aspects of
diversity.”
http://www.latimes.com/politics/la-pol-ca-governor-women-corporate-boards-20180930-story.html# 3/6
10/2/2018 Gov. Jerry Brown signs bill requiring California corporate boards to include women - Los Angeles Times

The opponents include the California Restaurant Assn. and chambers of commerce in
Long Beach, Simi Valley, Garden Grove, Redondo Beach, Cerritos and Brea.

The business groups added that federal law says corporations are governed by the
laws of the state in which they are incorporated, not by the state where their main
office is located.

More than 80% of the Russell 3000 companies headquartered in California are
incorporated in Delaware, according to Barrett, who also heads the firm Board
Governance Research LLC.

The conflict created by the new law, the business groups warned, will create
“confusion and ambiguity” that “will only lead to costly fines as proposed under the
bill and potential litigation.”

If the law survives a legal challenge, 684 women will be needed to fill board seats for
Russell 3000 companies by 2021, Barrett said.

Coverage of California politics »

3:57 p.m.: This article was updated with a quote from Jessica Levinson.
This article was originally published at 2 p.m.

Twice­weekly

Analysis and breaking news from our award-winning journalists in Sacramento and Washington, D.C.

ENTER YOUR EMAIL ADDRESS

Patrick McGreevy covers the California Legislature out of the Sacramento bureau. Since joining the Los Angeles
Times in 1998, he has worked in the City Hall and San Fernando Valley bureaus, writing about subjects including
Valley secession, LAPD reform and city government during the administrations of Mayors Richard Riordan,
James Hahn and Antonio Villaraigosa. He is a native of San Diego and a graduate of San Jose State University.

http://www.latimes.com/politics/la-pol-ca-governor-women-corporate-boards-20180930-story.html# 4/6