California’s New Board Diversity Law: A Mandate for Change
Agenda published a bylined article, “California’s New Board Diversity Law: A Mandate for Change,” authored by Russell Reynolds Associates Consultant Nada Usina on strategies that boards should use to attract top female talent in light of the new regulation. The article is excerpted below.
Under a new California law, companies based in the state will need to have at least one woman on their boards by December 31, 2019. Non-compliance would result in financial penalties, ranging from one to three times the average annual cash compensation for directors.
The move in California is not a surprise, as Russell Reynolds Associates has seen a spike in both public and private boards’ bringing women into the boardroom. As of June 2017, 26% of publicly traded companies registered in California had zero women on their boards, so the state still has a long way to go before achieving gender balance. Given the influence of Silicon Valley, this mandate stands to have a positive impact on diversity not only within the state, but also on the tech industry and, more broadly, the world.
Several studies tie diverse boards to increased company performance, yet gender parity has failed to materialize in the boardroom. What can companies do to increase the diversity of their boards? The following strategies can help boards differentiate themselves in attracting top talent:
Approach women differently about opportunities
In the executive search world, women tend to wait to respond to an opportunity until after they have processed whether the role is truly interesting to them, how it will impact their current team, and how a move would affect their family.
Be patient when working to attract women to your organization. Prepare to have multiple conversations through multiple avenues, such as introductions through mutual friends or networks. And remember to address women's concerns directly and early in the process.
Cultivate partnerships with networking groups that promote diversity
Networking remains one of the most common paths to recruiting new board directors. Boards that struggle with diversity should take a critical look at the business and social circles their members participate in. Strategic partnerships with associations and affinity groups can expose you to executives who might otherwise have escaped your radar, and sends a strong signal that your organization is committed to attracting diverse talent.
To read the full article, click here.