A Seat at the Table: Gender Diversity on Corporate Boards in Response to Legislative Mandate

Abstract

This qualitative study examines the impact of a legislative mandate on gender diversity for corporate boards headquartered in the US state of California. It explores the impact of Senate Bill [SB] 826 on the board governance ecosystem in California through the lens of boards, board members, prospective members, and those who work with boards on board governance and recruitment issues. This study indicates that while SB 826 may have accelerated the transition to more gender diversity on corporate boards within the state, other pressures, including those from large investment funds and public pension funds, had already started moving the gender diversity needle. Those who work with boards and potential board candidates also note that SB 826 raised the profile of the issue of gender diversity on boards, which, in turn, led more women to consider serving on boards, and several new programs were launched to help prepare women for board leadership. The study concludes that while California was the first US state to enact a requirement for gender diversity on corporate boards, other states are likely to follow in the near future, especially if the federal government takes no action on the issue. In addition, institutional investors, investment firms, and shareholders will continue the push for more board diversity, and they have already started to expand diversity goals beyond simply gender diversity.