A study by KPMG Board Leadership Center Senior Advisor Annalisa Barrett assesses the early impact of California’s board gender diversity mandate.
Senate Bill 826, California's law mandating board gender diversity for public companies headquartered there, elevated the conversation about the importance of diversity in the boardroom. With the first deadline under the mandate now in effect—public companies headquartered in California and traded on the NYSE or Nasdaq were required to have at least one female director by December 31, 2019—we look at the law's early impact by studying the women who were added to previously all-male boards of companies headquartered in the state.*
The mandate led to the addition of many female directors to the boards of companies headquartered in California. On the first deadline of December 31, 2019, only 27 companies (4 percent) of California-headquartered companies had all-male boards. This compares to 29 percent that had all-male boards as of June 30, 2018.
— Signed into law by California Governor
Jerry Brown on September 30, 2018
— Requires public companies headquartered in California (as defined by the company's principal executive offices reported on Form 10-K) that are traded on the NYSE or Nasdaq to have at least one female director by December 31, 2019, and by December 31, 2021, to have:
– At least three female directors if the board has six or more members
– At least two female directors if the board has five members
– At least one female director if the board has four or fewer members
— For the purposes of the law, directors will be considered female based on individual self-identification of "gender as a woman, without regard to the individual's designated sex at birth"
— Companies that do not report compliance to the California Secretary of State may be fined $100,000 for the first offense and $300,000 for further offenses
— Nearly all (96 percent) public companies headquartered in California had at least one female director as of December 31, 2019.
— Nearly all of the female directors (94 percent) joined their boards as outside directors.
— Most of the female directors would not be considered overboarded, with 69 percent serving on only one board.
— Overall, the women added to previously all-male California boards during 2019 bring a wealth of education and experience to their boards.
– Most (73 percent) are actively employed in addition to their board service, commonly in C-suite roles.
– More than three-quarters (76 percent) have an advanced degree, with the MBA being the most common advanced degree held.
— Nearly three-quarters (73 percent) served on at least one board committee by the end of 2019.
For more information, download the full report below.
* For purposes of the report, "female directors" refers to the women who joined the boards of previously all-male California boards during 2019.
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