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California’s board diversity law is struck down, but the gains women made are here to stay

May 17, 2022, 1:37 PM UTC

Good morning, Broadsheet readers! Macy’s launches a clothing line for Black sororities, France gets a new prime minister, and California’s board diversity law may be struck down, but its progress is here to stay. Have a lovely Tuesday.

– State of board diversity. Since 2018, California state law has required that public companies headquartered in the state place at least one woman on their boards of directors. Controversial at the time of its signing among those who object to government-mandated quotas, the law’s results are telling: women held 32% of board seats at California-based Russell 3000 public companies by the end of 2021, compared to 16% when the law was enacted.

Despite the law’s successful outcome, a judge ruled that the requirement is unconstitutional under the equal protection clause in the state’s constitution, striking down the 3-year-old mandate. Judge Maureen Duffy-Lewis sided with plaintiffs in a lawsuit, shepherded by the conservative organization Judicial Watch, stating that the law treats board candidates differently based on gender. That left the state responsible for proving that doing so was necessary, “narrowly tailored,” and met a “compelling public interest”—a burden Duffy-Lewis ruled it didn’t meet.

For those watching the case, the decision wasn’t particularly surprising. Last month, a different judge struck down a similar law mandating racial diversity on boards in the state. (That case was also brought forward by Judicial Watch.) But California’s women-on-boards law isn’t dead yet. The state will likely appeal, extending the legal battle beyond the Superior Court of California. And the California law has already influenced other states; Washington state implemented similar legislation in 2020 and lawmakers in other states, including Massachusetts, New Jersey and Hawaii, have introduced bills of their own.

Another report commissioned by Jennifer Siebel Newsom, California’s “first partner,” found that 670 board seats filled by women between 2018 and 2020 were a direct result of the legislation. “No matter what, the law has had a tremendous positive effect,” says 50/50 Women on Boards CEO Betsy Berkhemer-Credaire, who was one of the bill’s earliest supporters and testified in the 10-week trial that decided its fate. “It’s disappointing, but we expect the effort to put more women on boards to continue, and maybe even accelerate.”

With California lawmakers out of commission for the moment, it may be up to shareholders to maintain pressure on companies. Doing so is in their own best interest, Berkhemer-Credaire argues. “It has nothing to do with equal rights,” she says of why companies must have diverse boards. “It has everything to do with the interests of shareholders and investors.” The tide has turned, and all-male public company boards are passé—California mandate or not.

Emma Hinchliffe
emma.hinchliffe@fortune.com
@_emmahinchliffe

The Broadsheet is Fortune’s newsletter for and about the world’s most powerful women. Today’s edition was curated by Paige McGlauflin. Subscribe here.

ALSO IN THE HEADLINES

- Historic briefing. Karine Jean-Pierre held her first briefing as White House press secretary yesterday. "I am a Black, gay, immigrant woman," she told the reporters in the room, before addressing topics from the shooting in Buffalo to the ongoing infant formula shortage. "The first of all three of those to hold this position. I would not be here today if it were not for generations of barrier-breaking people before me." Guardian

- President picks PM. French President Emmanuel Macron named Élisabeth Borne as his prime minister. Borne is now the second female prime minister in French history. The 61-year-old most recently served as labor, employment and integration minister, and her appointment is seen as a form of outreach by centrist Macron to leftist voters. Washington Post

- Missed market. Macy’s expects to bring in $10 million in sales this year from its new clothing line for Black sororities in partnership with Kasper Group. The collection is available online and in 200 Macy’s locations, with an additional clothing drop likely to come next month. The retailer will also donate $1 million to the sororities’ education and research foundations. Bloomberg

- First interview. In her first interview since her Supreme Court confirmation, Judge Ketanji Brown Jackson discussed the gravity of being the "first." Jackson, who is set to become the first Black female Supreme Court justice, said being the first means "you feel the weight of wanting to succeed." The justice-designate also said that she was shocked by the Roe v. Wade draft decision leak and declined to comment on protests outside justices' homes. Washington Post

MOVERS AND SHAKERS: Alphabet’s drone delivery service, Wing, has hired Tesla associate general counsel Angela Chadwick as general counsel. Twilio has hired former Genesys chief marketing officer Joyce Kim as chief marketing officer. Foursquare has appointed Liz Brittain as chief financial officer. Former Aspira Women’s Health chief operating officer Kaile Zagger has joined Evolve Biosystems as CEO.

IN CASE YOU MISSED IT

- Travel trend. Starbucks will reimburse employees and their dependents who must travel over 100 miles to receive abortion services or gender-affirming care, according to a memo sent to employees on Monday. The Seattle-based coffee chain joins a growing list of companies offering travel expenses for abortion services, including Amazon, Microsoft, and Salesforce. CNBC

- Sweden’s in. Sweden announced its plan to apply for NATO membership on Monday, ending two centuries of military nonalignment for the country. Prime Minister Magdalena Andersson warned Swedish citizens to brace for Russian response as the country situates itself in a vulnerable position through the application process. Russia has previously warned Sweden and Finland, which announced plans to join NATO on Sunday, that there would be repercussions should they pursue membership. Associated Press

- Taxation negotiations. Treasury Secretary Janet Yellen met with Poland’s prime minister and finance minister on Monday as part of a push to get the country to approve a 15% minimum tax for large multinational corporations in countries where they operate. Poland is the only country in the European Union to hold out on approving the deal’s implementation. Wall Street Journal

- Significant survey. A survey of D.C.-area federal trial and appeals court clerks obtained by the Washington Post found multiple incidences of gender discrimination, racial insensitivity, and mistreatment by judges. Of the 400 clerks surveyed, 57 employees said they had personally experienced mistreatment, and another 134 witnessed misconduct or were told about it. Several reported that one judge, Karen L. Henderson, only hired men; assistants to another judge, Judith W. Rogers, reported verbal abuse, receiving the silent treatment, and comments about their weight, hair, and health. Court leaders have scheduled mandatory training this month, and are hiring workplace relations professionals. Washington Post

ON MY RADAR

Rep. Gwen Moore shares her abortion story Elle

Chelsea Woody on shattering stereotypes in surfing Bustle

Is it legal to fire someone while they’re on parental leave? Protocol

Anna Borkowski accused three men of rape. Why did prosecutors stop her? New York Magazine

PARTING WORDS

"There needs to be extensive federal action/legislation to address all aspects of the issue." 

- Katherine Massey, 72, who was killed in Saturday's shooting in Buffalo. She often wrote to publications including The Buffalo News advocating for stricter gun control. 

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