Diversity Across the Board
California has been at the forefront of working to increase the diversity of the board of directors for publicly held companies. In addition, several prominent asset managers such as State Street Global and BlackRock have championed the need to increase diversity on corporate boards. Their view is corporations with diverse boards tend to have higher performance compared to corporations with less diverse boards.
In 2018, SB 826 was signed into law and required publicly held corporations listed on a major US stock exchange whose principal executive offices are located in California to have a minimum of one female director on its board of directors by the end of the 2019 calendar year. The minimum requirements for female directors increase by the end of 2021 to two female members if they have five directors on their board and 3 female directors if they have six or more directors.
SB 826 requires the California Secretary of State to report annually on the number of corporations subject to the law that have complied and to impose significant fines for those corporations who have not complied.
Last year, AB 979 was passed and seeks to further expand the board of director diversity. By the end of 2021, publicly held corporations listed on a major US stock exchange with principal executive offices in California must have a minimum of one director from an ‘underrepresented community’. This is defined as a person “who self-identifies as Black, African American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian, or Alaska Native, or who self-identifies as gay, lesbian, bisexual, or transgender”. The number of board members from underrepresented communities must increase by the end of 2022 to two board members if the total number of members is between four and nine and three board members if the total number of members is greater than nine.
How Do You Handle Diversity and Inclusion in Your Workplace?
Greater diversity in the boardroom is not the only thing companies can do to support diversity in their workplace. As our country becomes more diverse, it will be important to ensure everyone will be considered and will feel included in the workplace if a company is going to stay competitive in the future. In addition, companies that do not respect diversity have learned it is difficult to promote respect among employees and have developed a hostile and sometimes toxic work environment. This has increased turnover, made it difficult to recruit the best talent and has sometimes led to the challenge of defending itself in court due to discrimination and harassment claims.
What is your company doing to ensure everyone feels included and is treated with respect? Do you have a strategy in place which could include developing a diversity and inclusion statement, ensuring managers are treating employees with respect and providing effective anti-discrimination and harassment workshops?
Often companies look at these types of activities as something to check off because they do not want to run afoul of the law, however, effective programs can do much more for a company! They can ensure employees have clear expectations on the company’s expectation of treating others with respect, help with opening up the lines of communication in the workplace and ensure companies are able to attract and retain the best talent they will need to be successful.
Celebrating Black History Month
Black History Month is an annual celebration of achievements by African Americans and a time for recognizing their central role in U.S. history. The event was the brainchild of noted historian Carter Woodson and minister Jesse Mooreland and it was first celebrated the second week of February 1926. February was chosen to coincide with the birthdays of Abraham Lincoln and Frederick Douglass. Since 1976, every U.S. president has officially designated the month of February as Black History Month. Click here to learn more about the history of Black History Month.
How SDHRC Can Help
Harassment prevention training should not be thought of as a requirement you just want to check off of your to-do list because its meaning is so much deeper than that. Harassment prevention training sends an important message to employees and demonstrates the mission behind your company. Conducting the training gives your employees a chance to become educated on diversity and inclusion as well as anti-harassment and discrimination policies. Our online and on-site options are not only convenient and educational, but they are also fun and encourage open honest dialog. Contact us today to learn more about our training services and ensure your company is up to date with the harassment prevention training.
