Filed on Sept. 20, Senate Concurrent Resolution No. 62 likely will inspire companies to “get ahead of the curve” by adding women to their boards, said Tabacco, who himself serves on the Overstock.com board of directors. But Tabacco added that the measure was not designed to be enforceable. “There’s not going to be any lawsuits now because the resolution is nonbinding,” he said.
The Sept. 25 article in the Daily Journal legal newspaper focused on the low numbers of women now serving on corporate boards in California, around the country and around the world. California’s resolution encourages companies with nine or more board seats to have at least three women directors by the end of 2016. Boards with five to eight seats are urged to have at least two women directors and all boards should have at least one, according to the resolution.
Several European countries have gone beyond California’s approach of mere encouragement, passing laws that establish mandatory minimums of female participation – 40% in Norway and France, for example. In contrast, only 10.5% of directors’ positions are held by women at California’s 400 largest public companies, with no female directors whatsoever at nearly half those companies, according to a UC Davis study cited in the article. Among Fortune 500 companies, the figure is 16.6% of board seats.
If those numbers are to increase in the United States, it will more likely be through efforts, like California’s, that focus on disclosure and encouragement rather than quotas, according to several observers quoted by the Daily Journal. Advocates of increasing board diversity – adding women, minorities and independent directors – say it benefits companies by putting them in tune with a broader group of employees and customers. “The best boards have a diversity of ideas,” said Alison Davis, a venture capitalist and board director quoted in the article. “Boards can have big blind spots if they don’t have female representation.”
*In August 2017, our firm name changed to Berman Tabacco. Case references and content published before that date may refer to the firm under our prior name, Berman DeValerio.