Equilar GDI: California Sees Rapid Acceleration of Women on Boards Since Passage of SB 826

June 13, 2022

REDWOOD CITY, CA (June 13, 2022)— According to the Q1 2022 Equilar Gender Diversity Index (GDI), women now represent 27.2% of all Russell 3000 board seats, up from 26.7% at the end of 2021. The slight acceleration during the first quarter of the year pushed the GDI to 0.54, where 1.0 represents gender parity. Additionally, the latest GDI report examines the prevalence of women directors across each U.S. state.

The analysis shows that North Dakota has the highest prevalence of women on boards at 37.2%, though the state is home to just five Russell 3000 companies. Among states home to at least 25 Russell 3000 companies, California and Washington lead the way, with female representation at 32.3% and 30.3%, respectively.

California was recently dealt a blow in the path toward board diversity as two diversity-focused mandates for public companies (SB 826 and AB 979) were struck down and deemed unconstitutional. While the long-term effects of the decisions made by California’s court system remain unclear, Equilar data shows that the gender mandate was indeed having an impact on the state. When SB 826 was passed in 2018, California ranked just 29th among all U.S. states in terms of the prevalence of women on boards, with representation at 17.4%. The state now ranks fourth as women represent 32.3% of all Russell 3000 board seats in California.

The benefits of diversity on boards have been expressed continuously over the last few years. Experts argue that women who do join previous all-male boards tend to bring strong backgrounds to the table. “When the KPMG Board Leadership Center examined the backgrounds of the women who joined previously all-male boards after the California law was enacted, we found that most held C-suite positions and had at least one advanced degree, with many having two or more, bringing a wealth of experience and expertise to their director service,” said Susan Angele, Senior Advisor, Board Governance at KPMG’s Board Leadership Center.

Another milestone in the path toward diversity is 358 companies had at least 40% representation of women on their boards by the end of Q1 2022, up from 256 companies in Q1 2021. “It’s encouraging to see the 40% growth in companies with more than 40% of women on their boards this quarter,” said Brigid Rosati, Managing Director, Business Development and Corporate Strategy, at Georgeson “More U.S. companies are closer to achieving parity on their board this year.”

For more findings, read the full Q1 2022 Gender Diversity Index.

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