Can California lead the way toward greater diversity in corporate boardrooms or will its efforts further incentivize corporations to leave the state?
In recent years, California has adopted new laws to diversify the faces in publicly traded corporate boardrooms in that state.
California Gov. Gavin Newsom recently signed into law AB-979 which requires corporations to appoint directors from “underrepresented” communities on their boards by the end of 2121.
In 2018, California required corporations located in the state to appoint at least one woman to their board.
California’s efforts reflect the dismal representation of women and minorities on corporate boards but they also raise questions. What is the best way to effect change? Does this goal require a uniform national approach, with incentives and rewards, so that no single state suffers adverse consequences? Might California have sought out other states as allies, to achieve strength in numbers?
Corporations already are leaving California, which is ranked by The Tax Foundation as 48th in terms of regulatory and business climate. The financial services firm, Charles Schwab, is the latest to announce it is moving its corporate headquarters from San Francisco to Texas, which not only has a lower standard of living but is one of the states that is least friendly to workers.
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