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The California Legislature’s 201–2018 session just ended with an ocean of new laws inflicted upon its citizens. It’s actually difficult to discover how many new laws were passed. There were about 2,100 bills passed and signed by the governor, but many of them were bills supporting things like National Arbor Day or the Ritchie Valens Memorial Highway or Cinco de Mayo Week or Persian New Year. If you look up the legislative agenda there are about 50 pages of passed bills with 50 items on each page, of which about 7 pages of bills were vetoed by Governor Brown. I can’t tell you how many of them are “real” laws, but in the last session there were about 900 new laws. My guess is that there were more than 900 this session.

Does anyone seriously believe that these laws will materially improve our lives? What about the 900 passed last year? Or the 800 the year before that? What they will do is make life more complicated for Californians and drive businesses out of state.

The crown jewel of California’s Progressive-feminist policy this year was Senate Bill 826 which mandates publicly-held corporations to put women on their boards. It was passed and signed by Governor Jerry Brown. California now proudly leads the nation in identity politics. The law requires a minimum of one woman board member by 2019, and by 2020, two for boards with five members and three with boards of six or more.

The law’s goal is gender parity, but it is couched in financial terms suggesting that companies with women on their boards do better than those that don’t. Several studies are cited to back this claim (UC Cal, Credit Suisse, and McKinsey). Catalyst, a nonprofit that promotes women in the workplace, did a widely quoted study that claimed:

Return on Equity: On average, companies with the highest percentages of women board directors outperformed those with the least by 53% .

. Return on Sales: On average, companies with the highest percentages of women board directors outperformed those with the least by 42% .

. Return on Invested Capital: On average, companies with the highest percentages of women board directors outperformed those with the least by 66%.

This claim doesn’t meet the smell test and the overwhelming conclusion of scientific research in the field says that women directors have little or no effect on corporate performance. Much of the data supporting the feminist theory lacks empirical rigor and is coincidental (A happened and then B happened, thus A caused B).

Professor Alice H. Eagly, a fellow at Northwestern’s Institute of Policy Research, and an expert on issues related to women in leadership roles, commented on this issue in the Journal of Social Issues:

Despite advocates’ insistence that women on boards enhance corporate performance and that diversity of task groups enhances their performance, research findings are mixed, and repeated meta‐analyses have yielded average correlational findings that are null or extremely small. … Rather than ignoring or furthering distortions of scientific knowledge to fit advocacy goals, scientists should serve as honest brokers who communicate consensus scientific findings to advocates and policy makers in an effort to encourage exploration of evidence‐based policy options. [Emphasis added]

In other words, much of the research is advocacy rather than science.

A recent Wharton study (“Does Gender Diversity on Boards Really Boost Company Performance?”) summarized by Wharton management professor Katherine Klein, vice-dean of the Wharton Social Impact Initiative, concluded:

Rigorous, peer-reviewed studies suggest that companies do not perform better when they have women on the board. Nor do they perform worse. Depending on which meta-analysis you read, board gender diversity either has a very weak relationship with board performance or no relationship at all.

Klein cites two mega-studies: one reviewed results from 100 studies of firms in 35 countries and five continents and the other synthesized 140 studies of more than 90,000 firms from more than 30 countries. She said:

The results of these two meta-analyses, summarizing numerous rigorous, original peer-reviewed studies, suggest that the relationship between board gender diversity and company performance is either non-exist (effectively zero) or very weakly positive. Further, there is no evidence available to suggest that the addition, or presence, of women on the board actually causes a change in company performance.

Regarding the value of gender diversity in the board room, she says:

Commentators often suggest that corporate boards that include women will make better decisions than boards that include only men. The argument is that women differ from men in their knowledge, experiences, and values and thus bring novel information and perspectives to the board. They increase the board’s "cognitive variety." The greater a board’s cognitive variety, the theory goes, the more options it is likely to consider and the more deeply it is likely to debate those options. …

Klein says, based on rigorous research, that, contrary to feminists’ assertions, “… women named to corporate boards may not in fact differ very much in their values, experiences, and knowledge from the men who already serve on these boards.”

Getting back to the smell test, Catalyst’s claim that return on investment (ROI) is 66% higher for firms with the most women on corporate boards, implying that this rosy result is because of the women, is a ludicrous assertion. If that were the case, then I assure you, every corporation would have quickly jettisoned at least half of their male board members to keep up with the competition — their shareholders would demand it.

None of these studies suggest that women should be excluded from corporate boards because they are women. Rather, they say that women should not be appointed to boards just because they are women. One can understand women’s goal of achieving corporate recognition and support of equally competent women. The problem with these mandatory identity-politics issues is that they are divisive, they value identity over competency, and they are heavy-handed attempts to legislate Progressive agendas.

With this bill, one based on false assumptions, we can expect other “underrepresented” groups demand laws mandating the appointment of, say, African-Americans, Latinos, and those identifying as LGBTQ on corporate boards because of their group identity.

Contrary to what “underrepresented” groups say, there is a constant scramble for talent in the business world, and most publicly-held corporations are eager to appoint any competent, qualified person to their board. In our healthy, highly competitive business environment, competent people can only add to a company’s success.

California is setting itself up as a hothouse of identity politics which divides us rather than unites us. Laws like this are breaking down society into what social scientists have classified as essentially a form of tribalism, a thing that has plagued progress for millennia. This is a major step backward.

This latest attack on corporate sovereignty will drive companies and jobs out of California.