California to become first US state with female boardroom quota | Business| Economy and finance news from a German perspective | DW | 01.10.2018
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California to become first US state with female boardroom quota

The US state of California has presented a landmark bill that will soon require the boards of publicly traded corporations to include at least one female representative. The quota is to increase in the years to come.

Come January 2019, California will become the first US state to mandate that women be included on the boards of publicly traded corporations based there.

Governor Jerry Brown signed a relevant bill after the state legislature had passed it in August.

"I'm signing Senate Bill 826 which requires a publicly held corporation, whose principle offices are located in California, to have a representative number of women on its board of directors," Brown said.

The law calls for corporations to have at least one woman on the board by 2019, with the minimum requisite to increase to two by the end of 2021.

Time for a change?

Brown acknowledged that while there had been "numerous objections and serious legal concerns" about the law, "recent events in Washington DC made it crystal clear that many were not getting the message." He appeared to refer to last week's Senate hearings involving Supreme Court nominee Brett Kavanaugh and Christine Blasey Ford, who had accused him of sexual misconduct.

"Given all the special privileges that corporations have enjoyed for so long, it's high time corporate boards include the people who constitute more than half the persons in America," Brown argued.

According to USA TODAY, the bill mentioned that one-fourth of California's public companies in the Russell 3000 index had no female directors. It also said that across the United States, half the 75 largest IPOs from 2014-16 were launched by firms with no women on their boards.

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