13 Aug DIVERSITY HAS BOARD, INVESTORS AND GOVT. ATTENTION
Why Should You Care?
California made the first move in 2018 by passing bill SB 826 to insure that publicly traded CA companies reflect gender diversity on their Boards. Currently, women hold 17.7% of Board seats in Public Companies, which is remarkable given research shows that companies who embrace diversity were 43% more likely to report above average profits. Currently, at least three other states are working to make Board Diversity a governmental mandate. More states will surely follow.
Not a surprise, the passage of SB 826 in California has broad implications for both public and private companies. This bill came on the heels of an increasing trend by institutional investors encouraging and/or requiring the companies they invest in to bring gender, ethnic and cultural diversity onto their boards. Massachusetts is crafting a similar bill, and the Illinois House of Representatives has just passed H.B. 3394.
The premise of these bills are to ensure publicly traded corporate boards reflect gender diversity. If they do not, attention getting penalties are enforced. In California, the first penalty is $100,000. A repeat violation is a hefty $300,000 per offense.
Today we’re diving into the topic of Board Diversity and how one of the largest Institutional Investors California State Teachers’ Retirement System (CalSTRS) is leading the charge on impacting positive progress!