Governor Signs Jackson Bill to Make California the First State to Require Women on Corporate Boards

October 01, 2018

SACRAMENTO—Governor Jerry Brown signed legislation today authored by Senator Hannah Beth Jackson (D-Santa Barbara)to require gender diversity on corporate boards. The bill is a California Legislative Women’s Caucus priority.

Senate Bill 826 promotes equitable and diverse gender representation on corporate boards by requiring every publicly-held corporation in California to have a minimum of one woman on its board of directors by the end of 2019. By the end of July 2021, the bill requires a minimum of two women on boards with five members and at least three women on boards with six or more. California will be the first state in the nation with such a requirement.

“With the Governor’s support of SB 826 today, yet another glass ceiling is shattered, and women will finally have a seat at the table in corporate boardrooms,” said Senator Jackson.  “With numerous independent studies showing that corporations with women on their boards are more profitable, SB 826 is a giant step forward for women, our businesses and our economy.”

In 2013, Senate Concurrent Resolution 62 (Jackson) urged that by 2017, each public company in California increase the number of women on their board to one, two or three, depending on the size of the board.  California was the first state in the U.S. to adopt this type of resolution, followed by at least five other states that have passed similar measures. However, as of the December 31, 2016 cut-off date, fewer than 20% of the Russell 3000 companies headquartered in California had the minimum number of women directors called for in the resolution. 

Research has shown that gender diversity on corporate boards is associated with increased profitability, performance, governance, innovation, and opportunity. Yet, one-fourth of California’s publicly-held corporations have no women directors on their boards.  In this respect, California’s corporations are falling behind their global competitors with only 15.5% of board seats held by women, lower than the Fortune 1000 list at 19.8%.

A number of European nations have mandated gender diversity on corporate boards. In 2003, Norway mandated that 40% of corporate board seats be held by women, which was followed by France and other European countries. In 2015, Germany mandated that 30% of corporate board seats be held by women. As the 5thlargest economy in the world, California is well-positioned to take the lead on promoting gender equity in the workplace.

SB 826 is sponsored by the National Association of Women Business Owners, California. "On behalf of the 1.5 million women business owners in California, it has been the distinct privilege of NAWBO CA to have propelled SB 826 forward. We are confident this law will be the catalyst for greater prosperity via the brainpower and contributions brought by the unique perspective of women," said Mindy Bortness, President, National Association of Women Business Owners California and Founder, Communication Works, Inc.

Jackson represents the 19th Senate District, which includes all of Santa Barbara County and western Ventura County.