Governor Jerry Brown of California recently signed Senate Bill Number 826, which requires all male corporate boards to have at least one women, in an effort to address the issue of gender equality within 165 public companies statewide.
The legislation has received criticism and praise from both sides of the isle, as such a drastic measure has finally brought awareness to an issue that has limited the professional ascension of women in the C-Suite.
Regardless of which side of the debate you may lean toward, no where in California has been more impacted by the lack of women on corporate boards than Silicon Valley. There is an assumption that Senate Bill Number 826 is aimed directly at the tech industry, which has notably been criticized for a lack of diverse perspectives.
More importantly, I dared to ask the question: Should gender inclusion be on any legislative agenda or is it just a private company issue? Did California get it right? To gain more perspective on the issue, I spoke with Tiffany Apczynski, VP of Public Policy and Social Impact at Zendesk, which is headquartered in San Francisco, to discuss how women in Silicon Valley are responding the legislation.
Here are the five key takeaways from our conversation.
The world is changing.
Tiffany stated the SB 826 is "one small step in dissolving the cycles of [bias] in the all male business world. In addition, it helps to change the landscape and bring more voices to the table, which brings equity across all aspects of the business model." Although the bill is a corrective measure that provides strict timelines for public companies in the state, the bill provides extensive data and research to support the value that women bring to corporate boards and the outlook for the future of the country.
Opens up internal policy discussions.
Two of the largest debates by far are parental leave and child care, which have placed women in high-level careers with limited options. Considering women are primary child care providers, and with no federal protection policies on maternity leave, it is difficult to present such a debate to an all male-corporate board. Apczynski added, "fewer people leave the workforce if you have better parental leave policies and child care subsidies. At the corporate level, we can have these discussions and implement policies that are best for the team."
There are diversity and inclusion experts, who believe that implicit biases are based on access within peer groups. Board members depend on the recommendation and advice of other board members to assist with filling vacancies.
Tiffany says that tech cannot be innovative or disruptive if the decision makers are not exposed to different experiences and people. She believes the legislation will open up the world view for the members of corporate boards to begin taking another look at diversity from the members that have a seat at the table.
Improves Corporate Culture.
Apczynski shared that "Zendesk does not have a problem with corporate culture." It is probably due to their commitment to gender equity, which has a board comprised of 50 percent women, exceeding the requirements of SB 826. Tiffany also stated, "we are not afraid of going against the status quo."
In addition, Zendesk has witnessed an improvement in corporate morale due to their social impact policies, which creates opportunities for their team to volunteer as an organization and gain first hand knowledge of how diverse perspectives impact the social landscape of the community.
Perhaps, California is taking a page out of Britain's push toward equal pay through regulating transparency. Britain's stance on publicly shaming companies for their unfair pay policies through an annual report, which must disclose their gender wage gap, is a push toward pay equality, and the first major corrective measure toward gender equity. "The submissions have made for uncomfortable reading for company executives," in a recent commentary in the New York Times.
California's legislation may create the same level of shame. According to the legislation, "one-fourth of California's public companies in the Russell 3000 index have no women on their boards of directors." In addition, companies with more women on their board are more likely "[to have] strong governance structures, demonstrate a high level of transparency, and avoid large-scale controversy," as mentioned in Women Create a Sustainable Future by UC Berkeley Haas School of Business 2012.
Tiffany added that transparency provides hope for women that there are advancement opportunities within an organization, which improves retention and provides women with the advocacy and support to advance professionally.
So, did California get it right? The law requires all companies within the state to have female representation by the close of the 2019 calendar year. For now, it is a major head-start in this ongoing debate.