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Californian companies are being fined if they don’t hire senior women

A new law says businesses need to have women on their board or cough up $300,000.

What it means: If you hang out in the business section of newspapers (no? Just us?) then you’ll have heard the term public company bandied around. It’s not an especially good name, because public companies don’t always work with the public, sell to the public, or actually let the public come anywhere near them. Instead, a company is public if it’s owned by shareholders (anyone who wants to buy part of the company on the stock exchange), as opposed to an individual or family. Only about 1 percent of US businesses are public, but they tend to be the biggest, richest ones.

Public companies have to obey certain rules. One is that they have a board of directors, who represent the shareholders and sign off on all big company decisions. They’re the top dogs - even company CEOs can’t do stuff without their say-so. Like many places of power, these board members are overwhelmingly (rich, white) men. Lots of people would like to change that, including California.

Currently, one-quarter of Californian businesses have all-male boards. But from the end of next year they’ll all need to have at least one female member. By 2021 they’ll need up to three (depending on how big the board is) or face a fine of up to $300,000. That sounds like a big number, but it’s not far off the wages big companies pay their board members, which might mean they find it relatively easy to swallow. If California’s law works though, the result will be more women with the power to influence thousands of jobs and billions of dollars.

Obviously lots of people aren’t happy about the law. One of the main criticisms is that it’s wrong to give jobs to certain social groups rather than the ‘best’ candidate for the job. Luckily, putting more women on boards is as good for business as it is for equality. Boards with more than three women outperform all-male boards on a whole host of different business-y things (basically, they create bigger profit and more sales).

 

 

Read our explainers on hierarchical workplaces and economic inequality.

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Reader Comments

  • RW

    Your right to a degree. You mentioned “the wandering Jew”.

    I elaborate that the Jewish people, historically have tended to migrate almost exclusively to locations that are economically and culturally vibrant already. I would speculate that Jews have thrived in these places and have often improved the bounds of their economies and knowledge base.

    You can also ask; how many massive entertainment conglomerates, Nobel winners or billionaires has Isreal developed? If Jews are so capable, why isn’t Tel Aviv the Rome of our time?

    Jews are successful because they value education, maintain a strong social cohesive, they actively monitor and have a good sense for Zeitgeist wherever they are and they carefully choose the places they settle and congregate themselves heavily in these choice locations.

    But most importantly (haulocaust increased the importance of this aspect), they actually designed their culture for success. They not only attend Harvard, they use what they learned to better the group as a whole. With as much, they studied intricate networking systems, adapted to it and in many cases improved upon them. (See how Japan acquired Aegis warships and made them better).

    Of course there is nothing wrong with any of this. It’s when you elaborately gain disproportionate power in any society where you would stand out, you must take care when attempting to make a society better (Civil Rights movement) and rewriting that society all together (mass immigration). Ask blacks in China, Mexico, Philippines or India how much opportunity they have? Go to businesses owned by their American diaspora and see how many blacks they hire. Go to Silicon Valley and see how many East or South Asian tech workers wish they could work with more black people. California might work as a state, but as a nation, I think your rolling the nuclear dice here. I hope we can succeed as a tolerant pluralistic superpower but at this stage in human societal development, it’s a pipe dream.

    And if Jews really are the icon for success, they would see that fundamental human successes happen over generations. Just look at the rest of the planet? Are we ready?