California’s boardroom diversity experiment delivers mixed results

March 4, 2020, 1:45 PM UTC
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Good morning, Broadsheet readers! The Supreme Court will hear oral arguments in June Medical Services v. Russo, Elizabeth Warren has a rough Super Tuesday showing, and we get the first results from California’s new boardroom diversity law  Have a wonderful Wednesday. 

– Mixed boardroom bag. California’s grand experiment to add women to corporate boards is well under way and the first signs of how effective it is are in. The results are mixed at best.

Of 625 companies listed on a report from the California Secretary of State earlier this week, 282 reported to have at least one female director, as required by the new law aimed at increasing boardroom gender diversity. The Secretary of State indicated that another 300 companies didn’t turn over the required information about board makeup, though some of those firms do appear to have at least one female director. Then there are 43 companies that reported no women on their board, indicating they are in violation of the new regulation.

Information about compliance—or lack thereof—with the new law is somewhat limited because California is currently engaged in litigation over it. If companies are eventually penalized for failing to fulfill the state’s new quota—the law enforces a $100,000 fee for the first violation and $300,000 for any violation after that—it will be the first-of-its-kind regulation in the U.S.

The new law, you’ll recall, tiptoes into territory that’s already well-charted outside the U.S.; countries like Norway, Germany, and France implemented quotas years ago. Yet such mechanisms remain hugely unpopular in U.S. boardrooms, with 83% of all directors opposing them, including more than half of women surveyed, according to PwC research. California is often a testing ground for progressive regulation, but so far no other states have followed its lead entirely (Illinois came close), perhaps due to the on-going lawsuits.

Nevertheless, there’s evidence the law is moving boardroom diversity in the right direction; women assumed 45% of new board seats at California-based Russell 3000 companies, versus 31% of board appointments nationwide, according to Bloomberg data.

And Keith Bishop, a former financial regulator in California, told Bloomberg that the law has been a wakeup for firms across the country, even as it’s challenged in court. “Whether the law is ultimately upheld or not,” he said, “I think it’s had an effect.”

In other California news, the state was one of 14 to hold Super Tuesday primaries yesterday. Elizabeth Warren, the only viable female candidate still in the Democratic race, did not win the contest there; what’s worse, she failed to claim victory in her home state of Massachusetts. The latter loss capped a disappointing evening for her campaign. More on that below.

Claire Zillman

Today’s Broadsheet was produced by Emma Hinchliffe


- A super eventful Tuesday. After Elizabeth Warren's disappointing showing in last night's primary results, the chorus—among Bernie Sanders supporters and even President Trump—calling for her to drop out has grown louder. Warren has so far resisted that pressure. The new frontrunner for the Democratic nomination is Joe Biden, who claimed victory in at least nine states, leading the delegate count. (He had an eventful night for other reasons too: Dr. Jill Biden and senior adviser Symone Sanders fought off an anti-dairy protester who stormed the stage.) Among closely watched down-ballot races, Jessica Cisneros lost her bid to unseat Rep. Henry Cuellar in Texas; Rep. Kay Granger fended off her primary challenger in the state; alleged child molester Roy Moore lost out on a runoff to appear on the ballot again in Alabama; and the race to replace Rep. Katie Hill in California is headed to a runoff, with Christy Smith at the top of the pack. 

- Justice(s) watch. The Supreme Court today is set to hear oral arguments in June Medical Services v. Russo, the abortion clinic case that could reshape abortion rights in America and leave Louisiana with only one clinic. It's the first time the Supreme Court will hear an abortion-related case since two justices appointed by President Trump joined the bench. The case will test the current court's approach to precedent (a similar issue was decided in 2016) as well as "the argument that abortion itself can be harmful to women, and that restricting access to the procedure therefore is beneficial to women." Wall Street Journal

- MPW IWD. Ahead of International Women's Day, tune into the Fortune 500 Daily wherever you get your podcasts for today's episode about Kohl's CEO Michelle Gass and tomorrow's covering Accenture CEO Julie Sweet. Fortune

- Turnaround and out. Helena Foulkes, the former CVS executive who as CEO of Hudson's Bay Company engineered an attempted turnaround of the business, will depart the post after finalizing a deal for the Saks Fifth Avenue parent to go private. She joined Hudson's Bay in 2018 and during her tenure sold off Lord & Taylor, Gilt, and some European operations. Wall Street Journal

MOVERS AND SHAKERS: Americares promoted Jenny Goldstein to SVP and chief development officer. Laura Newinski has been elected to serve as KPMG's next deputy chair in the U.S.; she currently serves as vice chair of operations.


- Kim speaks. Kim Yo-jong, sister of North Korean leader Kim Jong-un, made her first ever official public statement. In it, she condemns South Korea as a “frightened dog barking;” the country recently protested against North Korea's live-fire military exercise. Kim, who in January was named a first vice-department director of the central committee of the ruling Workers’ party, has in the past had a more friendly relationship with the South, and her statement signals "heightened pressure," experts say. Guardian

- Building history. The Pritzker Architecture Prize, or the "Nobel of the architecture world," went to two women, Yvonne Farrell and Shelley McNamara. The Irish duo co-founded the firm Grafton Architects and are the fourth and fifth women to ever win the prize. They're known for work that is sensitive to natural elements, from North King Street Housing in Dublin to the University of Engineering and Technology in Lima, Peru. NPR

- Parental leave report. U.K. Prime Minister Boris Johnson is expecting a child with his fiancée Carrie Symonds—the baby will be at least his sixth—and yes, he will take paternity leave. Johnson says he plans to take two weeks off after the child is born this summer; David Cameron and Tony Blair also both took paternity leave while in office. Guardian

- Behind the scenes. How did the jury come to decide to convict Harvey Weinstein? This story goes inside their deliberations. With Dunkin' Donuts and Sour Patch Kids strewn across the table, they decided to focus on whether each specific act happened and whether it was a crime—mostly disregarding the complicated relationships between Weinstein and the women who testified. New York Times


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