"From the Boardroom" with Mercedes De Luca
Thanks to Senate Bill 826, publicly traded companies in California were required to open more board seats for women during the four years it was active. Throughout that time, many decision-makers were forced to change the way they sourced board candidates, reaching beyond their networks to open the door to qualified, diverse contenders. The revelation? There is a rich pool of impressive, more-than-qualified women and people of color ready to serve on boards–companies just need to know how and where to find them.
Historically, corporate boards have been a closed network—not very friendly towards women or people of color. As both a woman and a member of the Latinx community, I consider myself one of the beneficiaries of SB826, securing my first public board seat in 2019. And what the law provided was simply the opportunity to interview. No standards were lowered or exceptions made, it merely required companies to look harder for candidates that broke with the homogenous nature of most corporate boards.
The law also minimized a major barrier women have traditionally faced in securing board seats at publicly traded companies: lack of experience. Like me, many women and BIPOC executives gained years of board experience at private companies or non-profit organizations, but were unable to make the leap to public company board governance. And the issue is really a “chicken and egg” scenario; with the lack of opportunities for women and people of color to serve on publicly traded boards, how would the experience needed ever be gained? With the law in place, this prerequisite took a significant backseat to other, more important qualifications.
And the best part? The female and BIPOC candidates appointed to boards have shown they are just as competent and qualified to hold the positions as their typical white male counterparts, who also once had no public board experience, but were given that same opportunity via a personal network. When I was interviewing for my current board seat at a public company, one of the board members I met with voiced how impressed he was with the candidate pool of women, stating the board could be reconstituted with the caliber of women he’d interviewed.
The reversal of the law is disappointing, but I am hopeful that the door is opened wide enough for the change it catalyzed to continue. If corporate boards truly want to sustain the progress made in inviting more women and people of color to the boardroom table, there are some simple best practices to follow:
Diversify within the nomination and governance committee. If there are women and BIPOC board members already in the mix, they should work to be part of the nom/gov committee. Their involvement will automatically provide access to a more diverse network of candidates and will give them more of a voice in how the slate is selected.
Take advantage of organizations that can help identify and source candidates from underrepresented communities. While the ruling was in place, many companies figured out how to find qualified, diverse candidates and benefited from it. Below are just a handful of organizations that do this.
How Women Lead – Focuses on women
The Alumni Society – Focuses on Latin leaders
The BoardList – Focuses on Board Ready women
Athena Alliance – Focuses on women on boards and C-Level execs
Practice diverse networking. When attending events, make an effort to meet at least one person that is “different” from you. And be open to first-time board directors, who may in fact be some of your most conscientious board directors.
It’s no longer a viable excuse to say that there are not enough women and BIPOC executives qualified for corporate board membership. It’s a myth that SB826 has debunked, and we must use our power to ensure the progress made for more equal representation is not lost with the overturning of this legislation. And not just because it’s fair, but because it’s proven to be better for board performance itself—resulting in better decision making, improved risk oversight and higher profits.