Come On Skechers! CA Mandates Women on Your Board

If half of the world population consists of women, one would think that having this demographic being represented on a company’s board would just be sound business. Right? However, in 2018, a fourth of publicly held corporations with headquarters in California don’t have any women on their boards of directors. This soon will change.

California has become the first state to require publicly traded companies to include women on their boards of directors, one of several laws that Gov. Jerry Brown signed. The measure requires at least one female director on the board of each California-based public corporation by the end of next year. Companies would need up to three female directors by the end of 2021, depending on the number of board seats.  Currently there are approximately 450 publicly traded companies in the state of California.

Ever wear Skechers shoes? Sure you have.  The third-largest footwear maker in the U.S. has nine men on its board, of which three are company employees (including CEO Robert Greenberg.) Under CB826, Skechers (SKX) would need to name at least three women to its board by 2021, the minimum requirement for boards of six or more members. The Manhattan Beach, California-based company employed 11,800 people as of January, and had 4.1 billion in sales last year. The California Chamber of Commerce has said the policy will be difficult for companies to implement and violates constitutional prohibitions against discrimination.

Some European countries, including Norway and France, already mandate that corporate boards include women. For larger Norwegian companies, the legislation requires that women make up as much as 40% of the board.  Regardless of how one sides on the issue, the fact that a company in this day and age where half of the world’s consumers are women decides not to have a women on its board is just a clear lack in the firm’s duty to act in the best interest of its shareholders.

As we manage client investment accounts, inheritances and IRAs we will continue to be sure to actively screen out companies who do not have women represented on their boards and executive level.

About Dale Wannen