"From the Boardroom" with Jennifer Siebel Newsom
As First Partner of California, a social justice documentary filmmaker and mother of four kids, the future of our planet and our country is always on my mind. It’s why I’ve spent my career devoted to challenging gender stereotypes and norms and evoking large scale cultural change. It’s also why I co-founded the California Partners Project, which works to champion and track gender equity across the state, including on public company boards. During the past four years since Senate Bill 826 was signed into law, it became an undeniable success - not only for the women it opened board seats to, but also for the California businesses who have benefitted from having more female leaders at their decision making tables. It successfully disrupted problematic patterns that have long limited companies’ search for talent for their boards, and the result is that companies are now accessing an endless range of skills and perspectives to meet their full potential. By including women’s perspectives, companies have seen higher returns and positive impacts on everything from product safety to risk management and sustainability to greater employee retention and satisfaction. In fact, data analysis by BoardReady shows that among the 72 S&P 500 companies headquartered in California in 2021, companies with 30% or more women directors on their board correlated with higher revenue than companies with less than 30% women directors. That’s right, gender diversity on boards drives productivity and profits! I am a firm believer that California’s diversity is our strength, and that is exactly what SB 826 did for gender equity in our state- it put our values into practice. Besides the early data California Partners Project tracked that shows it’s good for business, SB 826 has been more effective than any previous effort in opening the boardroom door to qualified, deserving women leaders. The law’s success to date is irrefutable, and here are the highlights:
In four years, California has nearly tripled the number of public company board seats held by women - from 766 seats to 2,092 seats, as of October 5, 2022.
The percentage of public company board seats held by women has more than doubled - from 15.5% to 33%. That’s 5% higher than the national average.
In 2018, almost 30% of California’s public companies had all-male boards, and as of October 5, 2022, only 1% - nine companies - have all-male boards.
In 2018, 11% of California’s public companies had 3 or more women directors. Today that number is 67%. These companies have reached the critical mass threshold that allows women to more effectively influence board decision-making.
There is still more work to do to make sure women’s voices are represented in California’s public company board rooms. While the law’s future is being argued in court, there are 260 additional seats to fill with women directors in order to meet the original obligations of SB 826. It’s essential that those seats be filled by mothers and women of color in a much more meaningful way. Omitting their experiences and perspectives from the boardroom will only perpetuate the status quo and a society that privileges short term gain and the few at the expense of long term sustainability and the many. And truly, women leaders are a powerful force. They tend to focus on the triple bottom line: People, Planet and Profits. This leads to better environmental outcomes, improved benefits to employees and the community, and better overall governance practices that reduce risk. Additionally, women in leadership have the power to influence women-friendly and family-friendly corporate policies, as well as uproot the systemic gender stereotypes that have long existed about female leaders. A study from Stanford, Columbia and Duke business schools found that when companies have women CEOs or board members, it helps pave the way for other women at the company to overcome the deep-seated trade-off of being perceived as either competent or likable. Anecdotally, we’ve heard from business leaders that having women on their boards encourages them to think differently about a number of issues including how they address their consumer base, build and develop their staff, identify their blind spots and understand what to prioritize. Additionally, having the backing of a diverse board has given CEOs more confidence to skillfully navigate an avalanche of complex social issues over the last couple of years, in addition to steering their companies through the unprecedented global pandemic. If you care about the future of this planet and country, you have to care about corporate boardrooms, too. They are increasingly making decisions that impact climate change, gender equity, caregiving and economic disparities. Women and people from other underrepresented groups have been left out of the room historically. Just consider the benefits to society when their voices are valued at the tables of power. SB 826 has been transformational, but there’s much work left to do.