Tech, business and legal experts weigh-in as CA's 'Women on Boards' law ruled unconstitutional

In her opinion, the judge wrote "there was no proof that this law, SB 826, will improve opportunities for women in the workplace."

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Tuesday, May 17, 2022
Experts weigh-in as CA's 'Women on Boards' law ruled unconstitutional
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Tech, business and legal experts weigh-in after Los Angeles judge rules California's 'Women on Boards' law unconstitutional.

SAN JOSE, Calif. (KGO) -- California's "Women on Boards" law has been ruled unconstitutional by a Los Angeles County Superior Court Judge.

Senate Bill 826, which was passed in 2018, required all public companies headquartered in the state to eventually include a minimum number of women on their boards of directors. This was expected to be achieved through phased compliance.

Retired Superior Court Judge LaDoris Hazzard Cordell weighed in on Monday.

"This ruling basically says that gender balancing - which is what SB 826 attempted to do - to have gender balancing somewhat in the corporate boardroom does not remedy discrimination," said Judge Cordell.

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The Southern California judge ruled that SB 826 is unconstitutional under the California Constitution, and that it's a violation of the Equal Protection Clause in the California Constitution.

"She basically said there was no connection between women on corporate boards and corporate governance, meaning she did not find that women being on boards, their presence would in any way change or impact how corporate boards govern," Judge Cordell told ABC7 News.

She continued, "I would hope that there's plenty of evidence to the contrary, that when you bring in more diverse people into a setting, then the way that they govern themselves changes as well."

Continuing to address the ruling made by Los Angeles County Superior Court Judge Maureen Duffy-Lewis, Judge Cordell said, "Another thing that she said in the opinion was that there was no proof that this law, SB 826, will improve opportunities for women in the workplace."

Cordell addressed several of Duffy-Lewis's findings. In the end, Judge Cordell told ABC7 News, "I disagree with the ruling. And I do hope that it will be appealed. Clearly, this is a thinking of a judge who was very conservative, and that comes through in the decision."

Judicial Watch, which is the conservative foundation that challenged the law, issued a statement.

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"The radical Left's unprecedented attacks on anti-discrimination law has suffered another stinging defeat. Thankfully, California courts have upheld the core American value of equal protection under the law," Judicial Watch President Tom Fitton said.

However, San Jose State University professor and tech expert Ahmed Banafa said that as seen in Silicon Valley, the best ideas come from collaboration in environments where all voices are valued.

"I am talking about my experience with supervising hundreds and hundreds of students. If there is a mix of both genders in a way where it is balanced, you will have good decisions," Banafa told ABC7 News. "Because everybody looks at it through their own perspective."

He said the move is personal to him, considering he has a daughter who is studying business.

"So when I read the story, I said, 'What are the chances for her, one day, to be a board member?' I mean, I'm worried about that too," Banafa said.

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Experts called the landmark law necessary, considering a board's responsibility to oversee management.

"They make decisions like hiring and firing of senior management, compensation," Kaumudi Misra, Assistant Professor at CSU East Bay's Department of Management said. "They make the strategy of the company and basically are looking over the function, so that there's not too much internal control."

Misra said the law has led to change, and it is that progress that cannot be ignored.

"Research has actually shown that diversity on teams improves performance," she added. "Because different members from different backgrounds bring different ideas and perspectives."

Experts are also pointing to research that shows before SB 826 law took effect, women held 17% of the seats on company boards in the state. This is based on the Russell 3000 Index of the largest companies in the U.S., according to the advocacy group 50/50 Women on Boards.

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In September, the percentage of board seats held by women went up to more than 30% in California, compared to 26% nationally.

Judge Cordell signaling to CEO's that a law shouldn't be needed for a woman to have a seat at the table.

"They need the will. They need the political will, they need the desire. They need the understanding about how important diversity is to their own businesses," she said. "So that message, had it gotten through, we wouldn't have needed SB 826."

Senate President pro Tempore Toni G. Atkins released the following statement about the court ruling- which Pro Tem Atkins jointly authored with former Senator Hannah Beth Jackson in 2018:

"This disappointing ruling is a reminder that sometimes our legalities don't match our realities. More women on corporate boards means better decisions and businesses that outperform the competition - that's a studied, proven fact. We believe this law remains important-despite the disheartening ruling from the Los Angeles Superior Court-and it exemplifies equal access and opportunity, the very bedrock of our democracy. For those still afraid of women in positions of leadership, they need to work on figuring that out because the world is moving on without them."

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