Just when you thought California couldn’t get any wackier, the looney state legislators go full nanny state, passing a bill mandating female board directors for all public companies headquartered here, even those that are incorporated elsewhere.
This is so wrong in so many ways I’m not sure where to begin. Let’s see …
The market is already all over this. All the big institutional investors on Wall Street – State Street, Vanguard, Fidelity and others – now require women directors or they will withhold their board votes. Let the free-freakin’-market take care of itself, damnit.
It violates the U.S. Constitution. Or maybe the bureaucrats in Sacramento haven’t heard of a little law called The Civil Rights Act of 1964 which prohibits workplace discrimination based on gender, race, yada yada. California’s gender mandate will be challenged and ultimately defeated in federal court.
What’s so great about being a board director, anyway? All the money and the action is inside the company at the executive level, not in governance. Directorship just gets you all the liability with none of the compensation. It’s not really even a leadership position.
It’s a slippery slope. Today it’s women. What’s next, mandating specific races? LGBTQ sexuality? What about short people? Plus-sized? Illegal aliens? Hell, why stop there? Why not fine companies that don’t at least interview one extraterrestrial life form?
Unintended consequences. Whenever governments mess with free markets there are always unforeseen consequences. Or have we forgotten about Sarbanes-Oxley which taxes companies with tons of bureaucratic bullshit and expense for going public.
What else can I say except, in the immortal words of the late great legendary VC L. J. Sevin, “I don’t know, this whole thing just makes my butt pucker.” Incidentally, there was a woman sitting right next to me in the boardroom when he said it.