BILL ANALYSIS �
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SENATE THIRD READING
SCR 62 (Jackson)
As Introduced July 11, 2013
Majority vote
SENATE VOTE :30-6
JUDICIARY 9-0
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|Ayes:|Wieckowski, Alejo, Chau, | | |
| |Dickinson, Garcia, | | |
| |Gorell, Maienschein, | | |
| |Muratsuchi, Stone | | |
| | | | |
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SUMMARY : Encourages equitable and diverse gender representation
on corporate boards, and urges that, within the three-year
period from January 2014 to December 2016, every publicly held
corporation in California with nine or more director seats have
a minimum of three women on its board, every publicly held
corporation in California with five to eight director seats have
a minimum of two women on its board, and every publicly held
corporation in California with fewer than five director seats
have a minimum of one woman on its board.
EXISTING LAW provides that the business and affairs of a
California corporation shall be managed and all corporate powers
shall be exercised by or under the direction of a board of
directors; vests the board with specified powers and duties; and
sets forth the procedures for appointing, electing, and removing
board members.
FISCAL EFFECT : None
COMMENTS : According to several studies cited in this
resolution, there is a positive correlation between a
corporation's economic performance and the number of women who
serve on the corporation's board of directors or in upper
management. Yet many of these same studies also show that even
where women make up 50% or more of the company's new hires, they
make up only a fraction (typically 16% or less) of that
company's board directors or executive officers. In other
words, well-qualified and well-educated women are obtaining
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positions in the corporate world in growing numbers, but they
are rarely making it into the corporate board room. A series of
articles that appeared in the Wall Street Journal reported that
this relative paucity of female directors and executive officers
exists even though the vast majority of corporate executives
believe that excluding women from corporate leadership positions
greatly reduces the pool of available talent and works to the
detriment of the company's bottom line. These articles
generally conclude that while the absence of women stems from a
variety of institutional, cultural, and psychological barriers,
these barriers can be alleviated where companies make
recruitment of women a conscious and articulated priority.
This resolution urges (but, as a resolution, cannot require)
corporations to make gender equity a priority and appoint more
women to their boards of directors. Specifically, this measure
urges every publicly held corporation in California with nine or
more director seats to have a minimum of three women on its
board, every publicly held corporation in California with five
to eight director seats to have a minimum of two women on its
board, and every publicly held corporation in California with
fewer than five director seats to have a minimum of one woman on
its board.
According to the author, "more women are needed in top
leadership positions. In an effort to bring gender equity in
the workplace, including fair representation, pay parity, safer
workplaces, and greater work-life balance, changes need to occur
at the top of the corporate structure. Women's high-level
involvement in corporations clearly provides a benefit to
corporations. This resolution, through various study citations,
makes clear the important role women have in the overall success
of a corporation. From an economic, a business and a fairness
perspective, diversity matters."
The nine chapters of the National Association of Women Business
Owners (NAWBO) in California unanimously support this
resolution. NAWBO claims that among "the 1.3 million women
business owners in California, there are accomplished women
entrepreneurs who have built, merged and sold their
corporations, many of whom are qualified to serve on corporate
boards." NAWBO believes "that corporations with at least three
women on their boards are better suited to make decisions that
impact business, the community and the citizens of California,
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reaching far beyond the borders of our state."
The California Women Lawyers (CWL) supports this bill because
"not only does it make good business sense, but it aids in the
advancement of women in business and society." CWL notes that
many women business owners in California, including lawyers,
have "the experience and qualifications to serve on corporate
boards."
Analysis Prepared by : Thomas Clark / JUD. / (916) 319-2334
FN: 0002777