Written by Ilona van der Linden
California’s push for social justice—even if it means discrimination and subjugation of select groups—has perhaps reached new heights with legislation passed in late 2018. The bill, SB 826, requires all publicly traded corporations to include at least one woman on their board by the end of 2019. The requirements then increase in two years, requiring boards with five or more members to have at least two women, and boards with six or more members to have at least three women. If companies do not meet the quota, they are required to pay fines of up to $300,000.
A conservative group has sued California under claims that such a bill violates constitutional protections against employment discrimination. The lawsuit argues, “The legislation’s quota system for female representation on corporate boards employs express gender classifications… as a result, SB 826 is immediately suspect and presumptively invalid and triggers strict scrutiny review.” It goes on to contend that “any expenditure of taxpayer funds or taxpayer-financed resources enforcing or otherwise carrying out the quota system is illegal.”
Such a lawsuit certainly has its merits. In Article I, Section 31 of the California Constitution, it’s clearly stated that “the State shall not discriminate against, or grant preferential treatment to, any individual or group on the basis of race, sex, color, ethnicity, or national origin in the operation of public employment, public education, or public contracting.” This legislation extends to racial/gender quotas under the California Constitution’s equal protection clause, as established in Connerly v. State Personnel Board. SB 826 explicitly enacts gender quotas, and is thus unconstitutional.
Even setting constitutionality aside, SB 826 has a myriad of issues. The bill was formulated with two key goals: to increase the number of women on corporate boards and improve business profits to boost the economy.
The bill contents cite a number of independent studies in which companies with employed women reported higher earnings per share, higher average returns on equity, and increased business performance—all of which are from questionable studies and vague reports, at best. Alice Eagly, a professor of psychology at Northwestern University devoted to researching female leaders, exposed such studies for their discrepancies in her article titled “When Passionate Advocates Meet Research on Diversity, Does the Honest Broker Stand a Chance?”
She explains that higher profits are not associated with the hiring of women. First, the lack of control of the direction of causality: does hiring more women lead to increased profits or do increased profits lead to the hiring of more women? With this being unclear in the studies, there’s no indication that hiring women actually increases profits. Second, correlation doesn’t equal causation. Professor Eagly notes that the potential of a third variable affecting both issues can be responsible for the correlation. Her analysis of the data reveals that the impact that female board members have on profits is statistically insignificant. If it exists at all, it’s negligible, and by no means is a reason to mandate hiring women on executive boards.
Individuals still in support of actions like Senate Bill 826—despite its established unconstitutionality and questionable science—ought to wonder if this bill is truly as progressive as it seems.
For every company passionate about equal opportunity employment, there’s another that solely seeks to avoid the fines now associated with having a male-dominated board. The presence of a woman in a room makes it appear diverse on paper, but the coerced presence of a woman on a board does not equate to the constructive exchange of her ideas and perspectives. Are women the ones taking initiative, making presentations, and spearheading change, or are they just protection against fines?
The issue we see here is state-mandated tokenism: the inclusion of “minorities” in a group for the sake of looking diverse. Companies can give themselves a few “Good Ally” points for diversity and call it a day. This doesn’t encourage a diverse workplace, it hinders it. It characterizes diversity by a number or percentage, as if by reaching such an arbitrary quota, a company is certified as sufficiently progressive and no further action is necessary.
The “diversity” movement should not be characterized by mathematical equality, but by the perspectives brought to the table by unique individuals. Any quota forcing numeric equality encourages and even forces companies to tokenize minority groups.
With such rampant legal, economic, and social flaws in its reasoning, it’s a wonder that SB 826 retains any support at all. Those in favor of true gender equality must oppose this legislation and others like it.
