Last week, I attended NAWBO-California’s annual Propel Your Business conference in Sacramento. I try to attend this conference every year because the dynamic and energy of the women business owners in the room is contagious! It reminds me of just a few reasons why I’m so proud to own my business.
One of the key items we discussed this year was California Senate Bill 826 – Corporate Board Gender Diversity, authored by Senators Jackson, Atkins and Leyva (all female senators). In short, SB 826 is a proactive approach to require more women directors on the boards of publicly held companies in California. The state is the 5th largest economy in the world, and as such, should set an example for responsible business globally.
Support for this Legislation
Research has shown that corporations with female directors on boards (as well as female leadership in the management ranks) outperform those who don’t have females in those positions. A 2016 McKinsey & Company study revealed that “nationwide, the companies where women are most strongly represented at board or top-management levels are also businesses that perform the best, in profitability, productivity, innovation, governance, better performance and workforce engagement.” Yet, one fourth of California’s over 400 public corporations have no women at all on their boards. As of June 2017, among the Russell 3000 companies headquartered in California, only 15.5% of board seats were held by women. Surprisingly, perhaps, California’s percentage of female directors is lower than the 16.2% found nationally. Europe leads the historic trend of encouraging women on boards. Norway in 2003 mandated 40% of seats to be held by women, followed by France and other European nations. Germany is the largest economy to have done so by requiring that 30% of board seats are held by women.
SB826 would provide for gender diverse representation on corporate boards by requiring each publicly held corporation headquartered in California to have at least one woman on its board of directors by the end of 2019. The bill does not legislate removing male members in good standing on a board and replacing them with females. Instead, it encourages companies to add a board seat to include women.
I don’t often use this platform to advance my political beliefs. However, in this case, I strongly support this bill (it is party-neutral) and I urge my readers to consider it as well and to take action to help move this through the California state legislative process. Like everything else, a letter to your elected officials in the California State Senate and Assembly is a huge step in the right direction. NAWBO (National Association of Women Business Owners) – California has been a supporter of this bill and its prior Resolution 62. The Resolution also called for an increase in the size of public company boards and adding women directors. While the Resolution did pass in 2013, there was no impetus for companies to make the changes. So, the Resolution was nice press but did not have the power of a law. As such, this time, the Senate Bill 826 comes through as legislation.
In the time of much discussion about gender equality, #MeToo, and other current national conversation about making things more equal, this is a bill that should receive honest consideration and ultimately be passed. While opponents will argue that more government regulation is not required, those in favor of passage would argue that sometimes the only way to truly affect change is to gain some ground via legislation. As indicated by the lack of action by corporations in the five years since passage of the Resolution, we need to swing a larger hammer at this.
Other Legislation Affecting Small Businesses
And while we are talking about bills, here are a couple others that will affect small businesses if passed. Take a look at what is going on in Sacramento and please consider adding your voice to the mix.
AB2841 – Employee sick time accrual – This bill adjusts an existing law (enacted 2 years ago as an amendment to Sec. 246 of the Labor Code) related to sick time which must be accrued by employers for non-exempt employees (including part time workers). Currently, if an employee meets certain thresholds, an employer must offer at least 24 hours of sick time per year. This bill would increase the required accrual to 40 hours per year. While I think employees should be allowed a certain amount of sick leave, I don’t believe that it should be legislatively increased. Business owners should decide if they wish to increase the sick time in order to stay competitive. Small businesses could face a hardship by this requirement to provide 40 hours to every employee. I vote NO.
AB2482 – Flexible hours/overtime – This bill would adjust the overtime rules legislated previously to allow for a more flexible workweek at the employee’s discretion. Current rules require employers to pay overtime for every day that an employee works more than 8 hours, even if they don’t ultimately work 40 hours in a work week. That requirement makes it difficult for employers to allow flexible work schedules (i.e.; a 4 day 40 hour work week, with three days off). This bill would give flexibility back to both employees AND employers and allow for an employee to work 10 hours in one day as part of a flexible work schedule without overtime. I vote YES.
Click here to check the status of any bill currently working its way through the California legislative process, whether introduced in the Senate or Assembly.
