Why SB826 Is Crucial for Providing Equitable Opportunities for Women AND Protecting Public Companies

"From the Boardroom" with Julie Castro Abrams



If you’re an executive woman working in California or for a California-based company, you’re probably worried about the recent lower court ruling of SB826, California’s landmark women on boards law, as unconstitutional. And you should be. The law, which requires all public companies in California to have at least three women on their board of directors (if the board has 6 or more directors total), has been an unqualified success since it was enacted in 2018. The reason being that it forces public companies to achieve true diversity of thought, an element of board governance that has been proven over and over to be quintessential to corporate success. According to a 2021 report by BoardReady, “companies with more than 30% of board seats occupied by women delivered better year-over-year revenue in 11 of the top 15 S&P 500 sectors than their less-gender-diverse counterparts. 54% of these gender-diverse companies delivered positive year-over-year revenue in 2020 compared to 45 percent of the companies with lower gender diversity.” Additionally, SB826 ensures that accomplished, deserving women executives with valuable experience and perspective to offer, are invited into the board room more often.


Because we believe SB826 is so important – not just to the companies it helps to protect, but also to the women it helps to lift up – we are launching a weekly LinkedIn content series called “From the Boardroom,” which will share a new perspective on SB826 from various female leaders and why it’s critical legislation we cannot lose.


As founder and CEO of How Women Lead, I am kicking off the series with my own perspective. I’ve long been a proponent of women helping women. How Women Lead’s guiding credo is: be fierce advocates for each other. As an influential network of more than 14,000 executive women globally, we have the power to catalyze change, most notably in progressing gender equity in leadership. As part of that mission, I have always been adamant that professional women begin scaffolding their journey to corporate board membership from an early stage in their careers. Women in their early twenties should start volunteering, in their mid-twenties start on committees, and by the time they're 30, should be on a nonprofit board. By then, friends and former colleagues may be starting companies; it’s a great opportunity to act as an advisor to those companies and add real value at an early stage. These are the stepping stones to executive leadership and corporate board seats. It’s also why How Women Lead offers a robust board readiness program that helps women identify the right kind of board that’s appropriate for them and their experience, and understand the pros and cons of different types of boards as well as the various committee structures. By going through the process, women begin to draft their own value proposition and following completion, they are equipped with the tools and support needed to begin pursuing a board seat.


But what good is all the preparation and hard work to get there if board seats are inaccessible to deserving women? SB826 was not just designed to make corporate board membership more equitable for women, it was enacted to help ensure sound board governance among public companies. Group think is very dangerous and diversity of thought and experience is key to mitigating risk. Shareholder activism has never been more prominent, and companies are being held accountable for their actions, which is why inviting more women into the board room is not only in their best interest, it’s also in the best interests of the companies as well.


SB826 legislation is crucial because it pushes compliance. Without it, public companies are not penalized and can continue to invite more like-minded candidates to join their boards - an all-too-common practice that is unacceptable because publicly traded companies have a responsibility to ensure board governance is sensible and well-grounded. Adding diverse leaders - in gender, race and expertise - to corporate boards is instrumental to success and benefits all involved.

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