The Wall Street Journal: California set to require female directors on corporate boards

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California legislators on Wednesday passed a bill that requires major companies based in the state to put female directors on their boards.

If the bill is signed into law by Gov. Jerry Brown, a Democrat, publicly traded companies based in the state will need to have at least one woman on their boards by the end of next year and, on boards of five or more directors, two or three women by the end of 2021, depending on the board’s size. Those that don’t would face financial penalties.

The bill passed the state Assembly in a 41-21 vote. It is now headed to the state Senate, which approved an earlier version of the bill and is expected to approve the measure again there before it heads to Brown, who hasn’t indicated his position.

“One-fourth of California’s publicly traded companies still do not have a single woman on their board, despite numerous independent studies that show companies with women on their board are more profitable and productive,” said state Sen. Hannah-Beth Jackson. “With women comprising over half the population and making over 70% of purchasing decisions, their insight is critical to discussions and decisions that affect corporate culture, actions, and profitability.”

An expanded version of this report appears on WSJ.com.

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