On October 19, 2020, Belinda Vega was quoted in Agenda on how California boards will recruit new directors. According to the article, now that the state’s second board diversity law is official, one-third of the 662 public companies in California are on the clock to appoint at least one new diverse board member by the end of next year. That’s more than 200 boards that will have to find either a racial minority or a candidate who identifies as lesbian, gay, bisexual, or transgender (LGBT+). In two years, another portion of the law will kick in, and those numbers will have to double at small boards and triple at large ones.
Vega says, “I’m biased, but I believe that California is leading the way. I see that institutional investors are looking at what corporate boards and C-suites look like.” She points out that lawmakers in several states (including Hawaii, Massachusetts, Michigan, New Jersey, and Washington state) are considering laws to mandate gender quotas. In the meantime, New York and Maryland have statutes that require corporations there to report on the number of female directors compared to board members. Illinois, on the other hand, requires an annual report on the race and gender of board members.
Vega is advising California boards to spend time discussing how they’re going to recruit new directors. In addition, she says it’s important that they stay true to their processes and criteria when choosing board members, even if they need to outsource those searches. Vega also recommends that boards consider whether they can or should increase the size of their boards to fill the needed vacancies under the new law. If so, they should review their bylaws and committee charters to determine the necessary actions.