California became the first state in the country to require public corporations to have women on their boards after Gov. Jerry Brown signed the bill into law on Sunday.
Taking a page out of Europe’s gender-parity playbook, male-monopolized companies must now let women into their corporate clubhouses by 2021 or face pricey penalties.
Norway or the highway
Gender diversity requirements are common in Europe: 12 European countries require at least 30% female board member representation.
Now, California companies with 5 board members must have at least 2 women, and companies with 6+ members must have 3 women.
The gender-equalizing policy seems to be working so far: The percentage of women on Norwegian corporate boards doubled after Norway passed a law requiring female board representation.
Sexism just got expensive
Hundreds of California companies have all-male boards — including 377 on the Russell 3000 stock index (which represents America’s 3k largest stocks).
If any of these corporations fail to get women at the table by 2021, they will pay a $100k fine (and potentially $300k for a 2nd offense).
The controversial law could still be struck down as unconstitutional — for discriminating on the basis of gender — by the courts. But if the law is implemented according to plan, 684 women will have to fill all the boards seats across the Russell 3000 by 2021.