California to ban all-male boardrooms - should the UK follow suit?

California has become the first US state to mandate that all public companies must include women in their boardrooms.

The Bill, signed into effect by Governor Jerry Brown on Sunday, stipulates that all publicly traded companies with headquarters in California must have at least one woman on their board of directors by the end of 2019, USA Today reports. Corporations who fail to comply will be subject to fines of up to $100,000 (£76,500) for the first instance, and up to $300,000 (£230,000) for continued violations.

The new law also stipulates that by 2021, companies with five directors must have at least two female directors, and boards of six people will need to include at least three women.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

“It’s high time corporate boards include the people who constitute more than half the ‘persons’ in America,” Brown said in a letter announcing his decision to the California State Senate. “There have been numerous objections to this Bill and serious legal concerns have been raised.

“I don’t minimise the potential flaws that indeed may prove fatal to its ultimate implementation. Nevertheless, recent events in Washington DC – and beyond – make it crystal clear that many are not getting the message.’’

According to The Wall Street Journal, the move “puts Silicon Valley’s start-ups on notice to include women on their boards as part of any plans to go public”. The new law will also “require tech giants such as Facebook Inc and Google parent Alphabet Inc - which have two female board members each - to make sure to include a third within a few years, since their boards have more than six directors”, the newspaper adds.

In the UK, a 2016 government-backed investigation into boardroom practices - the Hampton-Alexander review - showed that women represented just 25.5% of directors in the FTSE 350, which comprises the 350 largest British companies. An initiative was subsequently launched to ensure that a third of board positions would be held by women by 2020.

However, earlier this year The Times reported that the companies were “likely to miss” this target. The only way they could hit this goal would be to appoint women to more than 40% of all their boardroom positions over the next two years, the newspaper said.

In May, the Department for Business, Energy and Industrial Strategy published a list of excuses given by FTSE 350 companies for not having sufficient female representation in boardrooms. They included claims that women don’t “fit comfortably” in the boardroom, and “don’t want the hassle or pressure”. Other exuses included: “We have one woman already on the board, so we are done. It is someone else’s turn.”

The then business minister, Andrew Griffiths, described the comments as “pitiful and patronising”. Brenda Trenowden, chair of the 30% Club, which campaigns for a minimum of 30% women on FTSE 100 boards, said: “If they’re so out of touch with the real world, I wonder if they’re really qualified to be doing those jobs.

“It’s backwards thinking, it’s wrong and if they honestly believe what they say, they’re not doing justice to the companies they’re chairing because they’re missing out on a huge talent pool and they’re going to get left behind.”