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The Governor of California, Jerry Brown, has until September 30 to sign SB 826, which would require California-based public corporations to have at least one woman on the board of directors by the end of 2019.(Photo: Rich Pedroncelli, AP)

While California Governor Jerry Brown wonders if he should sign a bill that would make the state the first in the country to demand more women on the boards, he will be evaluating much evidence of benefits of such inclusion.

Brown will also have to take into account the doubts and the direct opposition of some to gender quotas – among them women executives.

Brown's bill, known as SB 826, would require California-based public corporations to have at least one woman on the board by the end of 2019 and, according to the board size, at least two. or three at the end of 2021.

Penalties for non-compliance would start at $ 100,000 for the first violation and increase to $ 300,000 for future cases.

At first glance, the legislation may seem worthy of universal support from women, who represent 47% of the workforce, but only 17.7% of the country's board of directors.

However, fears over the government's intrusion and possible accusations of tokenism undermine optimism about the bill's potential for those seeking gender equality in the meeting rooms.

"It's hard for the government to make decisions for us in terms of managing our businesses, and personally, I would prefer that we do not have the legislation and that the right thing happens anyway," said Patty McCord, former director of Netflix. now on the loan club's board of directors. "So, I am against legislation but to push it, because it makes it live."

Mr. McCord's mixed feelings reflect the dilemma faced by some lawyers who want to advance the cause, but not necessarily by a new law.

The California Chamber of Commerce is much more adamant in its opposition, writing a statement warning the bill "puts California companies in a difficult legal situation."

While subscribing to the legislation, the Chamber argues that SB 826 considers only one element of diversity – gender – and may violate the constitutions of the United States and the States.

"Politically, it's about managing a board of directors, and it should be up to the shareholders to determine what's best for the company," said Jennifer Barrera, Senior Vice President, Corporate Affairs. in the House. "And in legal terms, it faces a number of legal obstacles and challenges."

A "life" to target gender parity

Opposition advocates say that government intervention is appropriate to change a well-established culture of male-dominated power that shows little sign of recovery. They also highlight the successful inclusion of women on the boards of European countries that have set minimum quotas of up to 40%. Germany, France, Spain and Italy are among them.

Some independent studies show that companies with at least one female director perform better than others.

A global analysis of more than 2,000 companies conducted by Credit Suisse from 2006 to 2012 found that female indicators, including stock performance, were better valued by women. Shares of companies with female directors and market capitalization of more than $ 10 billion outperformed similar businesses by 26% with male-only advice.

However, the movement towards gender parity in the United States – where there is no minimum mandate – has at best progressed glacially.

The bill quotes statistics from 2017 showing that a quarter of California's 446 public companies in the Russell 3000 – an index that attempts to serve as a benchmark for the entire US stock market – did not have of single woman. Women held only 566 seats out of a total of 3,655, or 15.5 per cent.

At the national level, nearly half of the 75 largest IPOs from 2014 to 2016 were launched by companies without women. Fortune 500 companies, Only 24 have women CEOs.

California State Senator Hannah-Beth Jackson, a Democrat from Santa Barbara who sponsored the legislation, drafted a non-binding resolution in 2013 urging businesses to diversify their councils. Over the past five years, the percentage of women's council seats in the state has risen from 15.5 to 16 percent.

Senator of the State of California, Hannah-Beth Jackson, speaks at an event organized by "Families Together" on June 30, 2018 in Oxnard. (Photo: Juan Carlo / Ventura County Star / USA TODAY Network)

"At this rate, it will take a lot of lives to reach this level of parity," Jackson said. "When we let the market forces work, this glass ceiling can not be penetrated. Even with all the data showing that adding women to boards is good for business, we have not been able to succeed in this case. "

The bill would never have been drafted if more female executives were working in a position similar to that of Kirsten Wolberg, chief technology and operations manager at DocuSign, which sits on three boards.

Wolberg found a willing sponsor of former Silicon Graphics CEO, Jorge Titinger, who was so impressed by the list of candidates that he found while seeking to diversify his board that he added Wolberg and Nina Richardson at the same time in January 2016.

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This facilitated their entry, but Wolberg did not forget the years she spent as the only female voice at the technology industry leadership meetings and the conflict that this dynamic has engendered.

She is part of a group of women who have advocated for more diverse advice for at least 10 years and cites statistics showing that 87% of positions are filled through membership networks.

"Since the majority of the boards are male and the majority of men have men in their networks, I do not think that an organic solution will produce results at the required pace. "said Wolberg, a strong supporter of the bill. "It's time to introduce penalties. I much prefer the carrot than the stick, but the carrot does not work. "

Wolberg said that she has heard from peers that relatively inexperienced women on boards are now in high demand, but that those who have never sat on one of them do not receive a call, even though their list contains many references.

Other states could follow

This is partly why supporters like Meesha Rosa say that SB 826 is necessary and could lead to similar legislation in other states. Rosa manages the advisory services of Catalyst, an organization that champions women in the workplace and helps promote them in leadership positions.

"This was happening at a very slow and gradual pace without legislation, and now is the time to take bolder approaches to advancing women in the conference room," Rosa said. "This is just one example and could serve as a model for moving forward."

A handful of states, including Massachusetts and Illinois, passed non-binding resolutions such as the one Jackson originally promoted in California. Observers believe that states with progressive leadership are required to follow if Brown signs the bill. The Governor has until September 30 to decide and has not indicated how he relies.

Even in a liberal state like California, widespread acceptance is far from assured and Jackson acknowledges that a court challenge is possible and possibly probable.

Lori Nishiura Mackenzie, executive director of Stanford University's Clayman Institute for Gender Research, says that gender equality "is a social good, just as clean air is a social good."

However, she notes that opposition to this type of mandate is rooted in national cultural norms.

"Basically, Americans do not like quotas," Mackenzie said. "I think Americans would resist any kind of quota. It's not really our way of doing things. This is more the way Europeans do things. So I understand the resistance, and I'm just wondering if this quota will allow companies to move in a direction that suits them. "

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Others note that gender parity at the executive level has gained momentum through a series of forces, including shareholder pressure and the #MeToo motion, and is calling into question the wisdom of the need to legislate.

Mark Rogers is among them. The CEO and founder of BoardProspects.com, a Boston-based recruiting network, said the effectiveness of setting quotas was unclear.

What can not be disputed, he added, is improving the performance of various companies. Reasons range from their ability to better represent their clients and staff to the more innovative and innovative thinking engendered by the inclusion of diverse voices in the decision-making process.

According to Rogers, shareholder activism in investment companies such as Vanguard, BlackRock and Fidelity is spearheading changes in favor of greater equality, albeit at a slow pace .

"These institutional investors are exerting very positive pressure on boards of directors today in terms of composition, which is there," said Rogers. "I think you'll start to see this pace accelerate over the next two to three years. … I think companies that do not have women in their boards realize that they can not exist like that. "

People are watching the "Fearless Girl" girl statue in Lower Manhattan. The statue was installed by a Wall Street Financial Corporation as part of the 2017 International Women's Day to draw attention to the lack of diversity and the gender pay gap. . (Photo: Justin Lane, EPA)

"People are getting it now"

According to the Equilar Gender Diversity Index, the percentage of women on Russell 3000's boards rose from 16.9 to 17.7% in the first to second quarters of 2018.

And with 35% of new director positions attributed to women in this second quarter, 80.5% of Russell 3000 companies have at least one female director, but often only one. The vast majority of seats – over 82% – are held by men.

McCord said three years ago that she was not receiving any calls to join boards of directors. In 2017, she received four and this year she has five.

"People now understand that if your board is full of young white men and your product addresses your mother, you will probably want advice and representation from people with expertise and / or consumer experience of the product. . "

In addition, Equilar estimates that, if current figures are true, nearly 80% of California companies would not meet the 2021 standard of at least two or three women directors per board. This last figure is considered the tipping point for maximum impact.

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And if the legislation is passed, some people are wondering if it might encourage some companies to leave or decide to move to California.

Jackson responds that 70% of consumers are women and that for years they have outnumbered men.

"It would shock me if companies decided not to come to California because that would mean they should have women on their boards," Jackson said. "It's 2018! We should not have to face that. "

By tackling the problem and putting it in the forefront, proponents believe they have already advanced the cause.

Wolberg said several women executives in her network sent out celebrity e-mails when the bill was withdrawn from the legislature.

"Even if Governor Brown does not sign this in legislation," she said, "the fact is that California companies have a clear message: if they do not take unregulated action, there will be a response. regulated. . & # 39; & # 39;

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