The Women on Boards law signed by former Gov. Jerry Brown in 2018 required companies with more than six board members to have up to three female directors. When it was passed, the law was thought to be shaky in terms of the legal challenges it would face. A conservative legal group Judicial Watch claimed it was illegal to use taxpayer funds to enforce a law that violates the equal protection clause of the California Constitution by mandating a gender-based quota.
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Superior Court Judge Maureen Duffy-Lewis ruled that ’s landmark law requiring women on corporate boards is unconstitutional. California’s landmark law requiring women on corporate boards is unconstitutional, The Hill reports. If companies didn’t comply, the law imposed a $100,000 fine for a first violation and a $300,000 penalty for subsequent offenses. No fines were enforced, and there was no intention to do so.
California defended the law, stressing its importance in reversing a culture of discrimination that favored men and was put in place only after other measures failed. The state also argued there was no quota creation because boards could add seats for female directors without stripping men of their positions.
Even with the law’s promise, there has been an issue with company compliance relating to transparency.
Fewer than half the nearly 650 applicable corporations in the state reported last year that they had complied. More than half didn’t file the required disclosure statement, according to the most recent report.
While incremental, there seemed to be a gradual uptick in the representation of women as far as higher positions within the board room.
Before California’s law took effect, women held 17% of the seats on company boards in the state, based on the Russell 3000 Index of the largest companies in the U.S., according to the advocacy group 50/50 Women on Boards. As of September, the percentage of board seats held by women climbed to more than 30% in California, compared to 26% nationally.
Still, some 40% of the largest companies in California needed to add women to their boards to comply with the law, the group said.
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