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New CA law requires female representation on board of directors

On Behalf of | Oct 17, 2018 | business litigation, Firm News

California business owners should be aware of a recent announcement by Gov. Jerry Brown. According to a law he signed last week, California will be the first state in the U.S. to require certain types of companies to have female representation on their boards of directors.

Currently, the measure applies only to publicly traded companies headquartered in California. However, it sends a message to every current and prospective entrepreneur that the business environment in this state is changing.

The reason behind the legislation

Currently, gender equality in the workplace is a highly visible and divisive topic. Debates regarding equal pay and sexual harassment have dominated news cycles; female representation in traditionally male-dominated industries like politics and S.T.E.M. continue to lag, though there has been progress.

These shifts and obstacles prompted legislators to propose and support the bill to require large companies in this state to have at least one female director on their boards. Supporters say that doing so is in the best interests of businesses and their customers.

What does this mean for business owners?

The actual impact of the legislation remains to be seen. However, it is possible that we will see appeals challenging the laws, as well as pushback from the one-quarter of California companies that will have to add at least one female to their boards.

We could also see companies embracing the measure. Instead of fighting it, there could very well be corporations that see it as an opportunity to expand leadership opportunities to deserving – but discriminated against – candidates.

Whether you agree with the legislation or not, it could very well affect your business. Even if your business is a small- or medium-sized entity, you may want to consider your own leadership structure and representation. Are you promoting diversity in your business? Are you giving every person equal opportunities for advancement? Are you considering all options for reducing harassment and discrimination in the workplace?

This legislation could present legal challenges to business owners in terms of complying with state regulations and avoiding the appearance of discrimination. Should any issues or disputes regarding these matters arise, legal guidance could become necessary.