California is the first state in the nation to pass a resolution urging public companies in the state to achieve gender-balance on their boards of directors by December 2016. Although it does not have the force of law, it puts public companies on notice that the state is watching and has a vested interest in corporate performance and shareholder protection.
This resolution, passed in both houses this month at the urging of the Women's Legislative Caucus, cites the growing research that companies with gender-balanced boards do better along a host of metrics than companies with all-male boards. This research makes the movement to open the boardroom doors to more women a business case, not just an issue of fairness. However, nearly half of the largest 400 public companies in California have no women on their boards.
The minimum recommendations are specific. On a board of nine or more there should be three women; boards of five to eight, two; boards of less than five, one. This formula recognizes recent studies that suggest it takes three women on a large board to really make a difference. That "critical mass" creates an environment where women are no longer seen as outsiders and are more confident and accepted as full participants in board discussions.
There's no longer any doubt that diverse voices evaluate data more thoroughly, consider a wider range of options, and make better-vetted decisions. Board members whose experience is quite different from that of older white males have much to contribute to discussions and decisions in an increasingly complex global arena.
California's resolution was introduced at the urging of the National Association of Women Business Owners (NAWBO) representing 1.3 million women business owners statewide. Betsy Berkhemer-Credaire, former president of NAWBO-CA and the author of The Board Game: How Smart Women Become Corporate Directors, was one of the architects. She says, "it's just as important to have women on public company boards as it is to have women on the Supreme Court, in the Congress and in the White House."
Co-owner of a retained executive search firm that specializes in placing women and minorities in executive-level positions and board seats, Berkhemer-Credaire is a life-long advocate for women's career advancement and is Southern California Chair of Women Corporate Directors (WCD).
The state of California adds its authority and credibility to the building momentum toward assuring a more equitable distribution of women and men on corporate boards. Institutional Investor groups, large pension funds, some State Treasurers and a growing chorus of very successful male CEOs are speaking out on this issue and using their influence to increase awareness and advocate for change.
That's why The Board Game book is so timely, advising board-ready women how to get on their first boards and urging young women to begin to make career choices that can ultimately lead to the boardroom.