CA Public Company Boards
Governor Gavin Newsom signs AB979
California has taken a leadership role in confronting the systemic exclusion of Latinos and other underrepresented groups in corporate boardrooms. Latinos make-up nearly 40% of California‘s population, but are the least represented at the executive level and board of directors of California public companies.
In building the case for AB 979, the bill cited LCDA‘s recent study of all 662 California-based public companies which found that 35%, or 233 of these corporations, had all white boards of directors; and, 87%, or 571 California public companies had no Latino representation on their boards.
These low numbers are in stark contrast to the size and economic strength of California‘s Latino population.
- California is home to 15.5 million Latinos with $320 billion in annual purchasing power, and 800,000 Latino business owners.
- US Latino consumers are the economic engine of the country, making up 18.3% of the population and commanding $2.6T GDP and driving consumption growth in every mass consumer category
233 CA-Based Public Company Boards Lack Racial or Ethnic Diversity
The Latino Corporate Directors Association (LCDA) recently released its review of 662 publicly-traded California headquartered companies, identifying 233 companies with all white board of directors.
This list is accurate as of July 1, 2020. LCDA recognizes that companies may add ethnically or racially diverse board members and we welcome updates to this database. Contact ogromadameza@latinocorporatedirectors.org.
In March 2020, LCDA announced its analysis of women appointed to boards following the enactment of SB 826, finding that the largest number of appointments, 77.9%, went to white women, followed by 11.5% to Asian women, 5.3% to African American women, and the lowest number, 3.3%, went to US Latinas. Alarmed at the lack of Latina appointments in a state where the Latino population is 39.4%, LCDA conducted further analysis of the ethnic and racial composition of all California public company boards.
LCDA's new review of all 662 California companies registered on the NYSE, NASDAQ, and AMEX concluded that 35%, or 233 companies have all white boards of directors. LCDA further concludes that SB 826, the California Gender Diversity Law, perpetuates the status quo of majority white board of directors. LCDA analysis of California public companies reveals that a number of corporations have chosen to comply with SB 826 by adding women that are not inclusive of ethnic and racial minorities, stated California LCDA Member and Former Secretary of the U.S. Small Business Administration, Maria Contreras-Sweet. The SB 826 mandate of women on boards has largely left out women of color on corporate boards in the most diverse state in the nation, underscoring the need to address fundamental flaws in the state legislatures efforts to diversify California corporate boards, added Contreras-Sweet.
LCDA's research finds that 571 of the 662 CA-based public companies do not have Latino representation in the boardroom. Concluding that 87% of California headquartered companies have no Latinos on their board of directors.
Despite California efforts to diversify boards, of the 511 seats filled by women on California public company boards since SB 826 was enacted, just 3.3% are Latina, compared to 77.9% white women
In October 2018, California enacted SB 826, the first national law to diversify public boards in the state by mandating female participation on those boards. According to data from Equilar which has been supplemented by LCDA research, 511 women have been appointed to the boards of 415 companies since the law was enacted.
Unfortunately, even though California is the most racially diverse state in the nation, nearly 78% of the women appointed to these boards are white women. Hispanics comprise more than 39% of California's population which means that one in five people in California is Latina. However, just 17 women, or 3.3% of the women appointed to boards during this period are Latina. The table below shows representation by white, Latina, Asian, and African American women, compared to the size of the population by race in the state.
The LCDA Latino Board Tracker shows the numbers are even smaller on Fortune 1000 boards where 1.1% of California seats are held by Latinas. On the Russell 3000 index, Latina representation is miniscule, with less than half of one percent of the nearly 4000 California board seats held by Latinas (based on LCDA's analysis of ISS data of Russell 3000 companies, July 2019). Learn more about LCDA's Latino Board Tracker methodology for identifying individuals of Latino ethnicity.
With only 1.1% of California Fortune 1000 board seats, Latinas are severely underrepresented.
- 77% of all Fortune 1000 companies do not have a Latino on their board
- 76% of California F1000 companies do not have a Latino on their board
- In California, Latinos occupy 3.7% of all F1000 seats; Latinas, 1.1%
- Latinos hold just 2.7% of board seats on the F1000 Latinas, .8%
Demographics:
The Latino population in California is growing at a much faster rate than the states non-Latino population. It is projected Latinos will comprise 43 percent of Californias population by 2030, increasing to 49 percent by 2060. Latinos will make up nearly half of all Californians by 2060.
"California lawmakers and corporate America must understand that gender diversity is not enough. An all-white male and female board of directors is not diverse. Board composition that lacks Latinos and African Americans, is not reflective of California diversity," stated Linda Griego, Former Deputy Mayor of Los Angeles and LCDA Member. Adding, "California Latinos are an economic powerhouse driving growth in every sector of our state's economy and we should be represented on every public company board in California."
California companies that fail to reflect this growing demographic in their boardrooms risk falling behind on building a board that is well-positioned to address a future where 25% of their workforce and customer base will be Latina.
These findings quantify what most diversity advocates already knew even in California, companies are largely selecting white women to achieve diversity on boards, as outlined in recent research published by Catalyst on Fortune 500 boards where women of color hold just 4.6% of all board seats.
Media Coverage:
On the verge of becoming law: These 2020 bills are up to California's governor from CalMatters
California corporations would be required to diversify their boards under bill sent to Newsom from Los Angeles Times
Newsom gets bills to study slavery reparations, require diverse corporate boards from San Francisco Chronicle
California Lawmakers Approve New Diversity Quotas For Corporate Boards from Forbes
California Law Adds Women to Boards But Leaves Latinas Behind from Bloomberg
AB 979 would put people of color on corporate boards in California. It deserves support from The Sacramento Bee
Corporate boards have been too slow to diversify; it’s time for bold change from CalMatters