In California, about 25% of publicly traded companies reportedly don’t have a single woman on their board of directors. On Wednesday, the State Assembly passed a bill—the first of its kind in the U.S.—that would require such companies to change that. (A number of European countries have adopted similar measures.) Now the bill goes back to the Senate that already approved an earlier version, and then to Governor Jerry Brown.
If the bill is approved, here’s what it would mean for public companies in California:
- All public companies will need to have at least one woman on their board by the end of 2019. Boards with at least five directors will need two or three women by 2021; the number will vary depending on board size.
- Apple, Facebook, and Alphabet already have two women on their respective boards, but may be required to bring on more. A company like Netflix, which has six board members—of whom only one is a woman—would need at least one more woman.
- Companies that don’t comply would have to pay a fine.
- Private companies looking to go public may be forced to diversify their boards before filing for an IPO.
- Organizations that oppose the bill argue that it only addresses one type of diversity and could be a violation of the state or federal constitution if, say, a company has to turn down a male candidate or swap out a male board member for a female one.