Bill Text: CA SCR62 | 2013-2014 | Regular Session | Chaptered


Bill Title: Corporations: boards of directors: representation: women.

Status: (Passed) 2013-09-20 - Chaptered by Secretary of State. Res. Chapter 127, Statutes of 2013. [SCR62 Detail]

Download: California-2013-SCR62-Chaptered.html
BILL NUMBER: SCR 62	CHAPTERED
	BILL TEXT

	RESOLUTION CHAPTER  127
	FILED WITH SECRETARY OF STATE  SEPTEMBER 20, 2013
	ADOPTED IN SENATE  AUGUST 26, 2013
	ADOPTED IN ASSEMBLY  SEPTEMBER 12, 2013

INTRODUCED BY   Senator Jackson
   (Coauthors: Senators Corbett, Evans, Hancock, Liu, and Pavley)
   (Coauthors: Assembly Members Garcia, Lowenthal, and Skinner)

                        JULY 11, 2013

   Relative to women on corporate boards.


	LEGISLATIVE COUNSEL'S DIGEST


   SCR 62, Jackson. Corporations: boards of directors:
representation: women.
   This measure would encourage equitable and diverse gender
representation on corporate boards, and urge that, within a 3-year
period from January 2014 to December 2016, inclusive, every publicly
held corporation in California with 9 or more director seats have a
minimum of 3 women on its board, every publicly held corporation in
California with 5 to 8 director seats have a minimum of 2 women on
its board, and every publicly held corporation in California with
fewer than 5 director seats have a minimum of one woman on its board.




   WHEREAS, The 2012-2013 University of California, Davis, Study of
California Women Business Leaders found the following: (1) there is
only one woman for every nine men among directors and the
highest-paid executives, (2) no company has a gender-balanced board
or management team, (3) 44.8 percent of California's companies have
no women directors, (4) 34 percent have only one woman director, (5)
among counties with at least 20 companies, San Francisco County has
the greatest percentage of women directors (15.5 percent) and Orange
County has the least (7.7 percent), (6) firms in the semiconductor
industries and those located in the Silicon Valley tended to include
fewer women on the board and in the highest-paid executive positions,
and (7) firms in the consumer goods sector had the highest average
percentage of women directors and highest-paid executives; and
   WHEREAS, A McKinsey and Company study entitled "Women Matter"
showed that companies where women are most strongly represented at
board or top-management levels are also the companies that perform
the best, companies with three or more women in senior management
functions score more highly, on average, on the organizational
performance profile than companies with no women at the top, and
performance increases significantly once a certain critical mass is
attained: specifically, when there are at least three women on
management committees with an average membership of 10 people; and
   WHEREAS, An Oklahoma State University study found that board
diversity, including gender and ethnicity, is associated with
improved financial value and that study also found that a significant
positive relationship between the fraction of women or minorities on
the board and firm value; and
   WHEREAS, A report entitled "Women Directors on Corporate Boards"
found that gender diversity on corporate boards contributes to more
effective corporate governance and to positive governance outcomes
through a variety of board processes as well as through individual
interactions; that women directors contribute to important firm-level
outcomes as they play direct roles as leaders and mentors, as well
as indirect roles as symbols of opportunity for other women, and
inspire those women to achieve and stay with their firms, and that
more recognition is needed for the valuable contribution of women
directors to firm value; and
   WHEREAS, Credit Suisse conducted a six-year global research study,
commencing in 2006, of more than 2,000 companies worldwide that
showed that women on boards improve business performance by key
metrics, including stock performance, as demonstrated by the fact
that companies with a market capitalization of more than $10 billion,
whose boards have women, outperformed shares of comparable
businesses with all-male boards by 26 percent; and
   WHEREAS, The Credit Suisse report included the following findings:
(1) there has been a greater correlation between stock performance
and the presence of women on a board since the financial crisis in
2008, (2) companies with women on their boards significantly
outperformed others when the recession occurred, (3) companies with
women on their boards tend to be somewhat risk averse and carry less
debt, on average, and (4) net income growth for companies with women
on their boards averaged 14 percent over a six-year period, compared
with 10 percent for those with no women directors; and
   WHEREAS, According to the study entitled "Women Directors on
Corporate Boards: From Tokenism to Critical Mass" and a report
entitled, "Critical Mass on Corporate Boards: Why Three or More Women
Enhance Governance," attaining critical mass, going from one or two
women directors to at least three women directors, creates an
environment where women are no longer seen as outsiders and are able
to influence the content and process of board discussions more
substantially, and boards of directors need to have at least three
women to enable them to interact and exercise an influence on the
working style, processes, and tasks of the board, in turn positively
affecting the level of organizational innovation within the firm;
now, therefore, be it
   Resolved by the Senate of the State of California, the Assembly
thereof concurring, That the Legislature acknowledges that the body
of evidence to date concludes that companies perform better when
their boards and executive leadership include women, and that the
State of California has a significant stake in both protecting the
shareholders of publicly traded companies, as well as setting
policies that enable them to perform better; and be it further
   Resolved, That the Legislature, supported by the California
Legislative Women's Caucus and the National Association of Women
Business Owners California, encourages equitable and diverse gender
representation on corporate boards, and urges that, within a
three-year period from January 2014 to December 2016, inclusive,
every publicly held corporation in California with nine or more
director seats have a minimum of three women on its board, every
publicly held corporation in California with five to eight director
seats have a minimum of two women on its board, and every publicly
held corporation in California with fewer than five director seats
have a minimum of one woman on its board; and be it further
   Resolved, That the Secretary of the Senate transmit copies of this
resolution to the author for appropriate distribution.
                  
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