A Conversation with Jennifer Siebel Newsom About the Representation of Women of Color on Company Boards
Q: You recently co-authored a report examining the representation of women of color on California’s public company boards. What did you find?
We have encouraging news to share! The biggest takeaway is that California businesses are taking advantage of more female leadership talent. Since 2018, we’ve nearly doubled the number of women serving on those boards, from 15.5 percent representation to 26.5 percent!
But companies are still missing out on so much top talent.
- Only 6.6 percent of board seats are held by women of color, even though females of color make up 32 percent of California’s population.
- And Latina’s are woefully underrepresented in public company board leadership at 1 percent despite being 19 percent of California’s population.
What’s interesting here is that nationally, Latinos contribute 25 percent to the U.S. GDP, but hold just 3 percent of the board seats for Fortune 1000 companies. So, imagine the value add to companies if they brought more Latinas onto their corporate boards.
Q: Why are Latinas so severely underrepresented even though they make up a significant portion of California’s population and workforce?
I think sometimes people are creatures of habit and tend to go with what they know and for a long time this meant men chose other men to fill board seats. California’s groundbreaking law to increase the number of women on boards helps reset that cycle and hopefully once we get to a certain number of women on boards, it will become second nature to pull directors from a wider pool.
There are, of course, a range of excuses out there about why boards aren’t more diverse. One that we hear most often is that there aren’t enough qualified women to fill these roles. I can unequivocally say that is not true. There is an enormous number of women, including Latina women and other women of color, who are currently being overlooked and will be incredible additions to boards.
One of the main reasons why we started the California Partners Project was to not only track progress on this issue, but also to provide resources to boards and women to debunk that myth.
California Partners Project has created a resource hub that companies can use to find women of color looking to serve on boards at CalPartnersProject.org
The resource hub also lists all the California-based companies that need to add a female director by the end of 2021, by industry sector and location. I encourage women interested in serving on a public company board to explore the 400+ companies listed at calpartnersproject.org, and bring your talent to CA board rooms.
Q: Why is it important to create boards that reflect the true diversity of our population—not only for women but for businesses and the state as a whole?
The decisions made in corporate boardrooms expand beyond companies into their communities and society and culture at large, and we need more women making these decisions. From improving environmental policies and how well our businesses react to crises, to impacting how companies support their employees, to enhancing stock market performance, all are better with gender diverse boards.
Two concrete examples come to mind; last year, a study from Lehigh University found companies with women directors announce dangerous product recalls 35% faster than all male boards — that’s a critical 28 days faster! And another fascinating recent study found that banks with more women on their boards commit less fraud. Everyone benefits when women are at the table.
Q: What will it take to correct these imbalances?
Great question! Change can be hard. It’s hard to move beyond the way you’ve always done things and try something new, even when you know it’s the right thing to do. It’s encouraging that this law is working in increasing women’s representation on boards, but the critical next step is to make sure we’re including all women. CPP’s report offers a number of strategies to help boards recruit and retain talented women candidates, and we are working with the Stanford VMWare Women’s Innovation Lab and business school on a set of toolkits that will help boards do just that.
Big picture, I am optimistic about the future! California’s leadership is being replicated in other states, and investors, employees, consumers, and even Nasdaq, are all taking a stand on gender diversity because it’s the right thing to do and it supports long-term value creation. And we know that when companies have more diverse boards, they start tapping into more diverse networks and talent, fueling the flywheel.
Q: California is a leader in inclusion and diversity in the workplace—in part because of Senate Bill 826. What does this bill require, and are there any signs that other states are beginning to follow California’s leadership?
California’s law requires that the boards of public companies headquartered in our state have at least one woman director. By the end of this year, companies with boards of six or more must have three women directors, boards of five must have at least two women, and boards of four or fewer must continue to have at least one.
And yes! California’s law and progress on this issue is already a model for other states — Washington has a similar law and other states are considering their own versions. I am proud of our state for leading on this issue and happy that other states are seeing the competitive advantage this law brings, and following in California’s footsteps.
Jennifer Siebel Newsom is the First Partner of California and Co-Founder of the California Partners Project.