Diversity Quotas Aren’t Popular, but California Shows They Work

Bloomberg (February 29, 2020) Women are making inroads in the boardroom, thanks to a new state law requiring at least one at every public company. Maggie Wilderotter was never a fan of diversity quotas. Wilderotter, who has served on more than 30 boards in her career, has argued quotas can give companies an incentive to hire women who are unqualified or unprepared for the job. But after seeing the effects of a controversial California law mandating a woman on every public company’s board, she has come to realize that the technique can make a difference. California lawmakers passed the bill in 2018 requiring all public companies based in the state to have at least one female director by the end of last year. On Monday, the state is expected to publish the first official list of companies that failed to comply. They each face a fine of $100,000 and will have to pay three times that amount if they’re still in violation by the end of this year. Keith Bishop, a former financial regulator in California, said state officials were aware that the law was vulnerable to a legal challenge. “Other states recognize that,” said Bishop, now a corporate lawyer at Allen Matkins. “Whether the law is ultimately upheld or not, I think it’s had an effect.” Read More (subscription required)