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Brief #41—Civil Rights

Policy Summary
On January 3, 2018, California State Senators Toni Atkins and Hannah – Beth Jackson introduced Senate Bill 826. This bill sought to make additions to California’s Corporations Code regarding the composition of a company’s board of directors.

Beginning in 2019, publicly held corporations whose principal executive offices are located in California must have a minimum of one female person serving on the board of directors.

In 2021, California will implement a tiered system based on the total number of directors on the board. If there are four or fewer total directors on a board, one director must be female. If the number of total directors is five, the board must have a minimum of two female directors. If the total number of directors is six or more, the board must have a minimum of three female directors. On September 30, 2018, Governor Edmund G. “Jerry” Brown signed the bill into law. LEARN MORE, LEARN MORE

Analysis
In his signing statement, Governor Brown acknowledged that the new law may have some “serious legal concern” because of its gender – based classification and how that may be treated under the Equal Protection Clause of the U.S. Constitution. That clause provides that “No State shall…deny to any person within its jurisdiction the equal protection of the laws” which has been interpreted to mean all persons are to be treated equally under the law. Under the current legal analysis of gender based classifications, a state is granted a loophole to deviate from providing equal treatment if there is “an important government interest and the means undertaken are substantially related to that government interest.”

Despite the constitutional legal hurdles, the California bill is a landmark bill and the first of its kind in the United States. It is loosely modeled on a number of laws found in countries in Europe. (Germany requires corporate boards to be 30% female while France and Norway require company board of directors to be 40% female). This new law has a good chance of satisfying the legal test mentioned above and not be overturned because of the policy considerations underpinning the new law. When the law was introduced, State Senator Atkins cited recent studies by UC Berkeley, McKinsey and Company and Credit Suisse that showed that companies that had strong representation of women on boards and top-level management positions performed better in terms of innovation, profitability and productivity. The government interest here is in promoting a modern business trend of encouraging more female directors. As the examples in the Europe have shown, more females in positions of power have helped maximize business revenue and processes while encouraging inclusiveness and diversity. Male directors are not being discriminated and completely shut out of positions on corporate boards. This law is simply seeking to encourage companies to look toward qualified females and give them an opportunity after historically being under valued and under utilized in the United States. And as the studies have shown, encouraging women can be profitable and have a positive influence. LEARN MORE, LEARN MORE, LEARN MORE

Engagement Resources:

This brief was compiled by Rod Maggay. If you have comments or want to add the name of your organization to this brief, please contact Rod@USResistnews.org

Photo by Brooke Lark

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