Editorial: SB 826 is an ineffective effort to close the gender gap in business
By Editorial Board
Oct. 3, 2018 11:33 p.m.
Despite what Gov. Jerry Brown thinks, the glass ceiling takes more than just a flimsy piece of legislation to crack.
Brown signed Senate Bill 826 on Sunday – despite serious concerns regarding its legality. The bill requires publicly traded companies in California have a minimum of one woman on their boards of directors by the end of 2019. By July 2021, these companies will be required to have at least two women on boards of five members, and at least three on boards of six or more.
SB 826 is an honest attempt at closing the gender gap in business. The problem is, it’s also an ineffective one.
The gender gap in corporations is, quite obviously, a large one. A quarter of publicly held companies based in California don’t have any women on their boards of directors, said state Senator Hannah-Beth Jackson, who introduced the bill.
The need for more gender diversity in the boardroom extends beyond the Golden State. There are 12 Fortune 500 companies with no women on their boards, according to Forbes. Only 25 Fortune 500 companies are led by female CEOs. And women hold just 17.7 percent of board seats at companies in the entire United States, according to Equilar.
Requiring corporations to hire and promote more women seems a way to address this enormous skew. But combatting institutionalized sexism requires an institutional effort – and SB 826 falls flat on its face in attempting that.
The gender gap is about more than just requiring companies hire and promote the bare minimum number of women. It means paying them fair and equal wages compared to those of their male counterparts. It means dismantling the institutional barriers that keep women from ascending into positions of corporate power. And it means bolstering hiring pipelines to ensure qualified women candidates are hired and retained.
SB 826 does none of those things. Instead, it’s a flimsy effort to tokenize women on boards in lieu of giving them an equitable stake within the companies they work for.
That’s in addition to the bill’s legal pitfalls, which Brown himself acknowledged. The bill’s gender requirement raises questions about its constitutionality, and some have criticized it for unfairly enforcing a gender bias in favor of hiring women. While the irony isn’t lost on the many women who’ve been rejected from positions they were qualified for, the bill even stands to hurt them as they seek positions of authority.
Even if this bill remains in law, companies will only be fined $100,000 for not meeting the requirement by 2019, and $300,000 after if it’s still unmet. It’s not hard to imagine obstinate companies just paying the cost of breaking the law instead of going through the hassle of hiring more women.
And should a company want to avoid the fines, it can just promote one woman to its board of directors and ignore any systemic gender disparities in its ranks.
Certainly, as Brown has framed it, any law drawing attention to the gender gap in business constitutes a step in the right direction. But addressing discriminatory corporate practices doesn’t require just any haphazard solution; it requires a calculated, genuine effort that addresses gender inequality from the ground up.
SB 862 indeed sends a message to corporations and the rest of the country that California is serious about achieving gender equality.
It also shows that the state doesn’t have a clue about how to break the glass ceiling.
