California is known as a trendsetter for the rest of the country.
Is the Golden State now setting a new trend for women in the corporate boardroom?
We should all hope so.
Just before adjourning recently, lawmakers in California overwhelmingly voted to pass legislation formally encouraging corporations to add more women on their boards of directors -- becoming the first state to ever pass such legislation.
Local lawmakers in other parts of the country are taking steps to encourage gender equality as well. In Philadelphia, for instance, the city council in June passed legislation requiring contractors seeking to do business with the city to disclose gender, race and geographic data about their board members and executive staff.
The California legislation -- Senate Resolution 62 -- urges publicly held companies with nine or more directors' seats to fill at least three of them with women over the next three years. Companies with 5-8 directors should have at least two women in that time frame.
This legislation doesn't set legally binding quotas, like some countries do. And it's simply a resolution, and does not come with penalties or sanctions.
That's what makes the California resolution even better.
Our country and our companies aren't ready for government-imposed quotas for women directors. Quotas might be wrong for any country, in fact. Some studies indicate that when gender quotas are imposed on corporate boards, companies meet those quotas without also taking simultaneous steps to properly fill the executive pipeline with women to replace them. That doesn't end "tokenism;" it encourages it.
But that doesn't mean we -- as employees, as customers, as shareholders, and yes, as governments -- shouldn't do everything we can to encourage companies to voluntarily put more women on their boards.
The California resolution makes it clear why. You really should read it for yourself here.
In addition to formally urging more companies to add women to their boards, the resolution cites numerous studies that show just how bad the problem is -- and why it needs to be addressed.
*There is only one woman for every nine men among directors and highest-paid executives in California.
*No company in the state has a gender-balanced board.
*Semiconductor companies -- the Silicon Valley firms that are supposed to be on the cutting edge -- tended to include fewer women on their boards.
If this is what the world looks like for women at companies in trend-setting California, what's it like at companies in other less-progressive states?
As lawmakers noted in the California resolution, study after study after study -- from McKinsey and Co.; Oklahoma State; Credit Suisse, others -- have found that a more women a company has on its board, the better its profits, stock prices and corporate governance.
Here's the bottom line:
We don't need the government to put quotas on companies and their boards of directors.
But we do need our government -- federal and state -- to encourage companies to do the right thing.
We also need to do it ourselves, as women, as men, as customers, shareholders, employees and managers.
We all need to do what we can to advocate for gender equality. Even if it's by doing something as simple as reading this blog and passing it along to others to help raise awareness.