California governer Jerry Brown just signed a bill into a law that will diversify the boards of major companies headquartered in California.
This new law requires that major companies, including Apple, Snap and Tesla, need to have at least one woman on their boards by 2019. And for larger boards, they could require the presence of up to three women by 2021. Failure to comply will result in a $100,000 fine for the first violation and $300,000 per violation after that. And startups would also be required to add at least one woman to their board before going public.
Despite Brown signing it into a law, according to Recode, some business groups are already opposing it.
When Brown signed the message, he said the following:
“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.”
Having women on corporate boards has also been shown to have more effective business results. A study by MSCI showed that U.S. companies with three or more women directors reported 45 percent higher earnings per share between 2011 to 2016.