Companies headquartered in California can no longer have all-male boards

https://money.cnn.com/2018/09/30/news/california-requires-women-board-of-directors/index.html

by ajspencer • 8 years ago

77 112 8 years ago

money.cnn.com

jjeaff• 8 years ago

Shouldn't they also be required to have at least one black person, one Asian, one gay, one handicapable person and one non-cisgender member?

Imagine the job prospects of your average handicapped, transgender blasian lesbian? You could have your pick of any company board.

I kid, but I can't help but imagine there will be some unintended consequences of legislation like this.

ajspencer• 8 years ago

I agree. I support the principle behind this legislation, but it seems to set a dangerous precedent for giving the state government the authority to mandate demographics.

dsfyu404ed2• 8 years ago

Agreed. Allowing the governments to dictate the demographic makeup of private organizations is just asking for trouble. If we continue down this path I'm sure people will screw it up and use it for bad things (like universally bad, not just considered bad by the affected minority) within a generation or two.

egypturnash• 8 years ago

The perfect is the enemy of the good, darling. Give it time.

PopePompus• 8 years ago

Does this mean that all-female boards are also forbidden?

simcop2387• 8 years ago

I haven't been able to find the law itself to read it (probably not looking the in the right places), but all the reporting on it says that they must have at least 1 (or 2 or 3 depending size of the board) female member. I'm not sure how that's going to play out in the long run if it's actually worded that way since I suspect it would run afoul of federal EEOC set of regulations/laws. It'll be interesting to see the law itself and how it shakes out in the courts (regardless of how you feel about this law, I'm 110% certain it will end up in the courts).

throwaway938323• 8 years ago

I believe this is the law: https://leginfo.legislature.ca.gov/faces/billTextClient.xhtm...

cobookman• 8 years ago

I'm curious how trans people are counted as well. Say you have 1 Cis female, 1 cis male, 1 trans male, 1 trans female. Can the fifth person be a cis male or trans male?

azinman22• 8 years ago

It’s an interesting question, but I’d assume the law would say a trans female counts, a trans male does not. After all, if you’re transitioning into the gender you feel inside, then your birth sex is probably irrelevant from how you think and approach situations.

But that said, the vast majority of boards are all cis males. That’s the real thing being challenged.

androidgirl• 8 years ago

A trans woman is legally a woman and could be placed on the board to count.

A trans man is legally a man and would not count.

In California, transgender people are granted a lot of protections and rights, like the right to change their birth certificate gender, ID gender, etc. without surgery. It's one of the most progressive states on that issue.

dsfyu404ed2• 8 years ago

There's no way this doesn't backfire in the long term. We're gonna see "yes women" added to boards which will discredit the women who are there for reasons other than to just check a box.

exabrial• 8 years ago

They'll also likely choose a woman they can walk all over to accomplish this end.

I feel like this will hit the supreme court like a lead balloon fortunately.

TheDong• 8 years ago

As opposed to now where all the members of a board are qualified unrelated men, not a bunch of cronies of one of the members.

I wonder when the rampant cronyism among male-dominoated boards will discredit the men who are on boards for reasons other than cronyism...

gameswithgo• 8 years ago

sometimes two wrongs can make a right but I don't think this will.

WalterSear• 8 years ago

They will hire female cronies.

hueving4• 8 years ago

Why isn't the excuse of "representing the public" used to require certain members have a particular religion or race as well? What about income?

Board members are about as far from representing society as you can get (and that's not the purpose of a board anyway) so I don't understand why this is being mandated. Seems like a strategy for cheap political points rather than any kind of well-reasoned reform.

azinman22• 8 years ago

It’s a bold move, and I don’t know that I think it’s the right way to do things. That said, it should start to break down glass ceilings and likely lead to behavior changes by adding female perspectives into the mix. It’ll probably also trickle down in hiring practices and possibly even product changes that are less male-focused.

I’d prefer it if women could achieve this on their own because they’re good and deserve it, but so far society seems to be stagnating... and with the recent Kavanaugh hearing and what Trump says and who he backs, I fear women’s rights are in danger and role is receding. I’m very curious to see how this plays out and what meaningful changes (if any) come from it.

close043• 8 years ago

Seeing “quotas” in action already I can tell you they have the opposite effect than desired or imagined. Until now some people could imagine they didn’t get the job but she did because she’s a woman. Now they know and they’ll always hold this kind of law as proof.

This does nothing to further women’s rights but certainly does a lot to discredit the ones that deseved to be there by casting a shadow over whether they’re there to legitimize the board in the eyes of the law.

This legitimizes the question “was it the skills or the legal requirement”?

api2• 8 years ago

Did school desegregation work?

covermydonkey• 8 years ago

Quotas have been a disaster in my country. Instead of hiring the best people so that we can compete better we've had to optimize for this variable q and often those seats have been kept empty as we haven't found that special person.

roenxi2• 8 years ago

A slippery slope argument seems really justified here as this legislation applies to boards that are quite small in size. If women need this special advantage, we only have to find a few other deserving minorities (race, religion and age seem like reasonable choices) before it is illegal to use merit as the first criteria for making up a corporate board.

There is also a real concern with regulation like this is that the current climate of discussion is such that the negative effects are difficult to discuss in civil society. I wouldn't be surprised if most of the people who object to this are sexists.

EDITED because I'd interpreted the article wrong

AnthonyMouse2• 8 years ago

If women need this special advantage, we only have to find a few other deserving minorities (race, religion and age seem like reasonable choices) before it is illegal to use merit as the first criteria for making up a corporate board.

Adding other categories is actually worse than that, because it creates the need to specifically appoint an asian catholic female age 35-49. An asian catholic female in the 50-74 age group is no good because then the younger age group is underrepresented, a hispanic catholic female in the 35-49 age group is no good because then asians are underrepresented, etc. So the last board member not only can't be chosen on merit, they basically have to be ordered from a catalog of people whose function is to fit into whatever weird shaped box is formed by the composition of the existing board members. And if anyone leaves they either have to be replaced by someone of the same gender, race, religion and age or you have to discharge other existing board members and reconstitute the board.

hueving4• 8 years ago

I wouldn't be surprised if most of the people who object to this are sexists.

What? You point out the problems with how dumb this law is and then turn around and accuse anyone of objecting to it being a sexist?

throwaway00991• 8 years ago

Board members don't represent the public. In the U.S., they are elected by, and represent the shareholders. Evidently now for half the seats, the shareholders can elect whoever they want, as long as they identify as a woman.

throwaway938323• 8 years ago

This makes no sense.

So a company that has a target market of men must have a woman on the board? So an all woman board will be legal?

How female is female enough for them? Can someone just identify as a woman, or will there be a mandatory screening of what's between their legs (or what their DNA has)?

I predict the outcome will just be companies will move headquarters to another state (already happening because of taxes!) and/or the company will go private.

paulsutter• 8 years ago

Take a look at companies whose target customers are all women. Are you surprised to see a man on their board?

AnthonyMouse2• 8 years ago

Take a look at companies whose target customers are all women. Are you surprised to see a man on their board?

Are you surprised if they don't? Should they be required to?

throwaway938323• 8 years ago

Take a look at companies whose target customers are all women. Are you surprised to see a man on their board?

I actually agree with your point. I would mostly be surprised to see a man on their board. I also wouldnt expect legislation to require a man on their board.

However, the discussion also brings up the idea that a woman (and any other gender of person) could have expertise of value to that board despite their differing genderedness . The idea is like "You dont have to have cancer to be an oncologist" .

Still the idea of requiring it bothers me. I would have expected other forces to handle this situation instead of men w/ guns.

lawnchair_larry3• 8 years ago

This is one hell of an overreach and will absolutely not improve the problem that it tries to solve.

I am against identity politics on principle, but a much more amenable solution would have been something like offering tax incentives for companies who do.

But aside from being way too heavy handed for a state, are they planning to do this for every “protected” class? Why only women?

j0nathanB• 8 years ago

Why only women?

Women are the largest "protected" class and the most visible, so a good start on getting "protected" classes on more equal footing.

lawnchair_larry3• 8 years ago

If it's a start towards that, it's anything but good. Do you realize how many protected classes there are? And I'm sure that I could find a larger one than women.

ankushnarula• 8 years ago

Paradoxical how this so call "largest protected class" makes up the majority of the population, majority of college graduates, majority of purchasing decisions, etc - and yet it needs "protection" and laws to force equality of outcomes.

x0x0• 8 years ago

Curious - as article mentions - if this can be enforced on the standard Delaware C / California foreign that almost all of us work for.

Kalium2• 8 years ago

https://leginfo.legislature.ca.gov/faces/billTextClient.xhtm...

301.3. (a) No later than the close of the 2019 calendar year, a publicly held domestic or foreign corporation whose principal executive offices, according to the corporation’s SEC 10-K form, are located in California shall have a minimum of one female director on its board. A corporation may increase the number of directors on its board to comply with this section.

citrus1330• 8 years ago

Legislating people to make decisions based on gender? Wow! So progressive and nondiscriminatory!

en4bz• 8 years ago

Aren't most companies "based" in Delaware anyway for tax purposes?

shafyy• 8 years ago

A lot of tech companies are Delaware C Corps, but they are still headquartered in other states.

mujoco• 8 years ago

The article seems light on explaining the reasoning behind the law. Its proponents clearly want to increase the average female-male ratio on corporate boards. But that doesn't mean that a few boards being nearly all-male is necessarily bad. There must be a better, less blunt way to encourage companies to open more board seats up to women.

arcticbull14• 8 years ago

Hasn't happened so far but I'm sure they're taking suggestions. Feel free to raise some, and take it up with your legislature. But at least they're trying something.

repolfx2• 8 years ago

It does explain, but unfortunately the justification itself is light:

"despite numerous independent studies that show companies with women on their board are more profitable and productive"

The scourge of biased 'social science' strikes again. The politician believes that science has shown that women make companies better (but oddly, men don't make companies with all female boards better).

I've encountered a few studies over time claiming to show this. Every single one was junk. Common problems are:

1) No ability to replicate, e.g. citing private databases and then just asserting the outcome. This is a frequent problem with studies that come out of management consultancies and other such groups.

2) Dropping data points. One study I read that concluded women on boards = more profit started by excluding all the unprofitable companies from the analysis.

3) Confounding variables. It's typical for such studies to simply compare profitability against gender without controlling for other factors. For example they look at firms in the middle east (all men) and say, look, western firms are more profitable, it must be because of women. This is especially problematic when they include countries in the analysis where there are already laws forcing women onto boards - invariably it's the richest countries that do this i.e. those without bigger problems to worry about.

I have never encountered a study that showed with any scientific validity that companies make more money when they have women on the boards. Yet now these faux 'studies' are causing major law changes throughout the world.

This is of course exactly what the (invariably female) authors of these studies wanted in the first place. It is sickening and may eventually result in severe blowback.

userbinator• 8 years ago

This is only going to lead to "We don't have a female, let's just find one and put her there because the law says so."

First and hopefully last state, but I'm not optimistic...

arcticbull14• 8 years ago

No it's not, because board members are important. The conversation, at worst, will be "how can we find the best qualified woman we can to fill the board seat required." They can expand the board to meet this requirement so they won't be unable to hire anyone.

thisgoodlife• 8 years ago

How does the law prevent the founders from putting some of their wives to the board?

NeedMoreTea2• 8 years ago

Fascinating to see all comments against this at the moment.

Some level of mandatory female board presence seems to work OK in plenty of places elsewhere in the world without a great backlash. No visible campaigns to repeal because of the great damage or tokenism that's resulted.

mooseburger• 8 years ago

Which are the other places in the world that have done this?

skybrian• 8 years ago

Belgium, France, Germany, Iceland, India, Israel, Italy, Norway and Spain have quotas according to:

https://en.wikipedia.org/wiki/Gender_representation_on_corpo...

tokyodude• 8 years ago

neither pro or against but just googled it and this came up

https://en.wikipedia.org/wiki/Gender_representation_on_corpo...

patrickg_zill2• 8 years ago

Of these companies how many are competitive with American business?

arcticbull14• 8 years ago

I forgot how America's man-only board driven companies are the only competitive ones in the world :P Thanks for reminding me?

stmfreak2• 8 years ago

This outlaws freedom of association. If I am a woman creating a company for women’s products and want an all woman board, why should that be a problem or any business of the government? If the shareholders don’t like it, they can vote in/out whomever they want.

And if an all woman board is okay, then what hypocrisy is this new law?

arcticbull14• 8 years ago

Hey let's cross that bridge when we get there maybe?

cam_l2• 8 years ago

It would be great if all the comments in this thread could give full disclosure for their position. As you would for any other potential conflict of interest.

For my part, I think legislation like this could be immeasurably improved if there was a sunset clause once parity was reached (in the state). Which would prove that this is only instituted due to the compete failure of the status quo of the old boys clubs.

Full disclosure: blokes opinion.

doodliego• 8 years ago

Aren't most corporations incorporated in Delaware for tax reasons anyway?

neonate• 8 years ago

Is incorporated-in the same as headquartered-in? for the purposes of this law?

Kalium2• 8 years ago

https://leginfo.legislature.ca.gov/faces/billTextClient.xhtm...

301.3. (a) No later than the close of the 2019 calendar year, a publicly held domestic or foreign corporation whose principal executive offices, according to the corporation’s SEC 10-K form, are located in California shall have a minimum of one female director on its board. A corporation may increase the number of directors on its board to comply with this section.

sxcurry• 8 years ago

The comments so far might give insight into the terrible sexism of tech in general.

SamReidHughes• 8 years ago

This is no different than outlawing all-male marriages.

arcticbull14• 8 years ago

No, it's completely different.

outis3• 8 years ago

Honestly surprised at how many people are posting comments about this. You know you'll end up on some list, right? Maybe you think it's ok to debate this kind of measure now, but the line will keep moving. In three years you may have people scouring your internet history for past wrongthink to deny you that promotion, or to get rid of you. In five years, machine learning algorithms may take your comments as input for your Ethical Credit Score. Hacker News is not going to delete your comments if you come to regret them.

It's best not to think about these things at all. What can you do, anyway? Suppress your mind's wandering. Focus on that algorithm on that refactoring, someone needs to get that work done, and it's you. You need that promotion. You need to make a lot of money for the federal government, for the state of California, and for your landlord, and you better make enough that there is something left to save. You don't want to look back in ten years and realize your youth disappeared while you were sitting in front of a monitor, you're still unmarried, you don't own a house, and you haven't had an independent thought in a decade, right? At least you've got to have some money saved up, that's going to make it worth it. So put your head down and get back to coding.

testfoobar2• 8 years ago

Self censorship is a feature not a bug.

arcticbull14• 8 years ago

This reads to me as "don't say things that leave you on the wrong side of history" - a solid recommendation for life in general.

leereeves2• 8 years ago

You mean "on the wrong side of people who don't tolerate differences of opinion".

It's sad to see the left becoming so intolerant. In this very discussion we see people claiming that it's sexist to be against this law.

Personally, I think the law should treat all people equally, not single out groups for favorable treatment.

flukus• 8 years ago

Predicting the future is your solid life advice? Would you recommend a crystal ball, a ouija board or a magic 8 ball?

Should I only concern myself with the long term history or do I have to worry about regressions mixed in? A lot of people thought they were on the right side of history with gay rights in Leninist Russia, it didn't turn out well.

tuesdayrain• 8 years ago

This boils down to "don't be wrong" except far more subjective.

remarkEon• 8 years ago

This reads like the summary of an episode of Black Mirror.

lykr0n2• 8 years ago

It does, and it's shocking and saddening that it's not unrealistic.

dang2• 8 years ago

It's an abuse of this site to use HN primarily for ideological battle, which this account has been doing for a long time. Would you please stop?

We don't care about your ideology, but we do care about not letting a minority of users ruin this site for everyone else by turning it into a political tire fire—especially given what's happening on the rest of the internet, which people come here for refuge from. The rest of the comments in this thread are bad enough as it is.

https://news.ycombinator.com/newsguidelines.html

outis3• 8 years ago

I will obey your decisions as a mod.

However, I disagree with the assertion that my comment was about ideology or politics. My comment was about the very concrete conditions of life of someone working in the tech industry in California, which is why I thought it may be of interest to the readers of HN.

The situation I mentioned is not about following this or that political faction. It is a threat to free discourse, to the ability to have an intellectual life, and to folks' actual livelihood. And it is certainly relevant to many people who visit this site or comment on this article.

The only connection to a particular political side was the work "against" in the first sentence. I regret that, and I have replaced it with "about". If, with that change, you feel that it is still possible to identify a particular political or ideological faction which is responsible for the danger I mentioned, that is not something I can control. I can only say that the boot may be on the other shoe someday, and I would still be speaking up against it.

As for the rule against using HN primarily for ideological battles, I was not aware of it, and I apologize. Would it be better if I started posting more technical comments as well?

Also, how does your interpretation of the rules affect users that use "throwaway" accounts? If a user makes a throwaway to talk about a controversial issue, that account may only have one post, meaning that 100% of its posts are controversial. Would that not prevent people from discussing controversial issues at all? Which, in the end, is the same as the advice I was offering.

stmfreak2• 8 years ago

Six person board? “At least” three women. Says it all.

seivarden• 8 years ago

Six or more.

arcticbull14• 8 years ago

I (a man) for one am happy about this decision. Not because this, the intermediate state, is one I'm happy with, but because it creates female role models that girls can look up to. This in turn will show girls that it's something they can achieve and aspire to, and ideally, soon, this legislation won't be required anymore. It's a bootstrapping tool.

We're talking about a single board member. This isn't going to destroy companies. It's not going to force companies to do without the best and brightest, that's incredibly hyperbolic. If you really want to add a specific man, add a seat, or drop someone.

Especially since as the article points out, companies with female board members tend to be more profitable [1]. Correlation is not causation. On the other hand, there's no apocalyptic collapse coming because they let a lady into the boardroom, my lord, what's becoming of California?! I do believe I've got a case of the vapors.

It's really amazing how little empathy is being displayed here. I'm sure each of you would feel differently if 90% of board members were women. Maybe it's just the demographics on here? Maybe it's because as engineers we live in a world we can control by simply moving a letters around on a computer screen. The real world, society, is messy. It's not as simple as declaring meritocracy and suddenly equality arrives. Change requires making uncomfortable decisions, making compromises and taking real steps. And yes, rolling them back if they don't work out as planned.

[1] https://www.bbc.com/news/41365364

arcticbull14• 8 years ago

Hey to those down voters, maybe stop by an explain your position! I'd love a conversation.

justtopost2• 8 years ago

I can't downvote, but I can read.

Many people feel sexism, and bigotry in general is not solved by more of the opposite kind of bigotry. I feel their theory that it will somehow lead to more rolemodels is optimistic, but misplaced.

testfoobar2• 8 years ago

Requiring a private entity to spend resources in favor of one class of citizens is almost certainly unconstitutional. There are many actionable avenues available to California to promote equality in workplaces, by signing this soon to be struck down law, California’s leaders are exploiting politica division for political gain. Politicians going to politician.

lykr0n2• 8 years ago

Ignoring the intention, California is littered with big ideas that fell on their face months/years later. But that's the next guy's problem.

jandrewrogers• 8 years ago

How does something like this get implemented? A company has limited control over the gender composition of the board. The aggregate actions of myriad outside and independent shareholders may not align to produce the necessary result in aggregate. Furthermore, virtually all of these companies are foreign corporations, California has limited ability to modify the intrinsic nature of the board construction process -- it has no jurisdiction. The only obvious escape hatch that make this reliably executable in any sane legal framework is to guarantee that the CEO is female. Or to have a male member of the board exercise the "identify as female" clause if the shareholders in aggregate don't produce a board composition that meets this law. The whole thing is a setup for some absurd theatrics in the board room. I fail to see how this will produce a positive result for anyone.

That said, I am skeptical that this passes Constitutional muster. California has no jurisdiction over corporate law in the rest of the US, and (for good reason) nobody incorporates in California such that they would have jurisdiction. This is a publicity stunt that will stir up outrage by various factions and accomplish nothing.

SilverSlash• 8 years ago

But I thought gender was a social construct. So why include quotas based on gender?

animex• 8 years ago

They should have went all the way: 50% women, 10% african-americans, 5% asian, 5% choose-some-other-race, of which 5% must be LGBT, 20% catholic, 50% christian, 25% none/agnostic/atheist, 5% "other" and 99% should NOT be in the 1% :-)

I suspect a working-class Lesbian Asian Hindu is gonna find themselves in demand!

darawk• 8 years ago

This is just staggeringly stupid and makes me ashamed to live in California. I'm all for having women on boards, when there's a qualified female candidate. I am categorically not for forcing them to be on boards for some misguided sense of social justice.

smsm42• 8 years ago

I read in Wikipedia that:

As of August 2015, only 2% of S&P 500 companies had all male boards of directors

Is California trying to solve a problem that has already been solved?

gfredtech• 8 years ago

Imagine being a female on the exec board of a California company and knowing the reason why you're there.

cam_l2• 8 years ago

Imagine being a man on any other board and knowing why you are there..

kyriakos• 8 years ago

This is ridiculous. I hate discrimination but enforcing this I believe has the opposite effect.

seattle_spring• 8 years ago

I wish these laws would focus on the issues with the pipeline, instead of bandaid "fixes" like this. It's insane to me that we can look at women still being encouraged to study soft majors like art, history, teaching, etc, and then be surprised that they're not becoming board members of huge companies 20-30 years later.

There are SO MANY reasons that women are not becoming leaders of companies at the same rate as men, and the glass ceiling is such a small part of the larger picture.

This seems like an unbelievable lazy and dishonest attempt at fixing a real problem.

subjectsigma• 8 years ago

Extreme left-wing politics is basically defined by hypocrisy at this point. "Discrimination is bad... Unless we do it!" "Violence is bad... Unless you're punching people the mob deems Nazis!" "Free speech is good... Unless you say something we don't like!"

I'd like to imagine that most moderate liberals are seriously embarrassed by this kind of stuff. It seems from the thread that this is true, so that gives me hope that it's not all bad.

Companies headquartered in California can no longer have all-male boards

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