Tom Kisken | Ventura

A California bill to would mandate that corporations add women to their boards of directors is stirring a fight over equality, profitability and the Constitution.

Senate Bill 826, co-authored by Sen. Hannah-Beth Jackson, D-Santa Barbara, would mandate that publicly traded corporations include at least one woman on their board of directors by the end of 2019. It passed through the state Senate on Thursday in a 22-11 vote, meaning opponents from the business world are preparing arguments for the Assembly about the bill’s constitutionality and use of a legal mandate to bring about change.

“The question is: How do you best achieve it?” said Chris Micheli, legislative advocate for the California Ambulance Association. “For us, we should look more at the carrot and less the stick.”

The bill from Jackson and Senate President Pro Tem Toni Atkins, D-San Diego, mandates five-member boards would have to include two women by July 31, 2021. Boards with six or more members would need at least three women by that date.

Companies that opt not to replace current board members could add new seats to meet the gender requirement.

{{props.notification}} {{props.tag}} {{props.expression}} {{props.linkSubscribe.text}} {{#modules.acquisition.inline}}{{/modules.acquisition.inline}} ... Our reporting. Your stories. Get unlimited digital access to exclusive content. Subscribe Now

The bill would authorize fines against companies that don’t comply. The first violation could bring a fine equal to the average annual cash compensation of the corporation’s directors.

Jackson said about 16 percent of board members on publicly held corporations based in California are held by a gender that makes up more than half of the state’s population. She also contended that companies benefit financially when women serve on their boards.

“To suggest that only men can do this job is misogyny at its worst,” she said.

Hate crimes: State auditors say California underreports hate crimes

The bill is opposed by a coalition of 30 businesses and groups led by the California Chamber of Commerce. Local organizations in the coalition include the Camarillo and Simi Valley chambers of commerce.

The opponents say they support equity but complain about the sole focus on gender, suggesting it obscures other aspects of diversity when corporations elect board members.

“SB 826 would require the company to choose the female candidate and deny the male candidate the position based on gender,” coalition members said in a position statement, later citing constitutional mandates that sex, race and creed not be used as barriers.

“The U.S. Constitution, California Constitution and California Civil Rights law all prohibit a business from engaging in the type of consideration SB 826 mandates,” they said.

The goal is to change the exclusive boys club culture of the so-called C Suite, said Jackson, noting such change often requires mandates and laws with teeth. She noted the Legislature passed her resolution in 2013 urging companies to elect female corporate board members.

The corporate world ignored the request, she said.

“These are just excuses,” she said of arguments offered up by opponents who say they promote diversity across the board. “The fact is they’re not willing to take the steps necessary to make it happen. It’s not going to happen on its own.”

She responded to the constitutional objections by noting that boards don’t have to replace men with women but can add new seats. She said the state of California owns jurisdiction over corporations based in the state but incorporated elsewhere, though opponents suggest the reach could also bring legal challenges.

The legal concerns make the bill vulnerable, said Micheli.

“Should the Legislature be adopting bills that could potentially be overturned by the courts?” he asked.

Jackson said corporations benefit from female leadership, suggesting research shows performance and profits improve.

“I think it’s a win-win,” she said.

The bill is sponsored by the National Association of Women Business Owners. Elaine Hollifield, president of the Ventura County chapter and a Simi Valley businesswoman, rejected opponent’s suggestions that law could lead to reverse discrimination.

“We’re not trying to take over the world or anything,” she said. “We just want a seat at the table.”

Now, the bill moves to the Assembly. Jackson predicted a tough path ahead but said she’s confident.

Micheli pointed to the Democratic majority in the Assembly and suggested the underdog role belonged to opponents of the bill.