LCDA Report Found Less than 1% Increase in Latino Board Seats Since Law’s Enactment
85% of California Public Company Boards Comply with AB 979
WASHINGTON, May 19, 2022 /PRNewswire/ — The Latino Corporate Directors Association (LCDA) released research documenting the successes and failures of California law AB 979 in its California Boardroom Equity Report: A Review of California Public Company Board Composition by Ethnicity, Race, and Gender.
As of December 31, 2021, AB 979 has been successful in reducing the number of all white boardrooms by more than 20%. But AB 979 failed to equitably increase the number of Latino directorships, adding less than 1% of board seats for Latinos and maintaining their status as the most underrepresented ethnicity or race in California public company boardrooms.
California Company Board Composition
On October 1, 2020, more than one-third (36.8%) of California public companies lacked any racial diversity on their boards.
- As of December 31, 2021, the number of all white boards fell to just 14.8%.
- More than 85% of California company boards were in compliance with AB 979 on December 31, 2021, having at least one director from an underrepresented community.
- The percentage of California company boards with Asian representation increased from 42% to 64%, and
- Black representation more than doubled from 16% to 35%
Nearly 80% of California public company boards lack a Latino director, even though 39% of California’s population is Latino. California public companies rank far below national representation when compared with Fortune 1000 company boards, where 47% of companies lack the perspective of a Latino director.
“While the large majority (85%) of California corporations were in compliance with AB 979 at the close of calendar year 2021, this report reveals that despite the mandate, Latinos remain the least represented on California public company boards–underrepresentation that is unacceptable in a state whose population is nearly 40%,” stated Esther Aguilera, President and CEO, Latino Corporate Directors Association.
Underrepresented Directors–Total Board Seats
The law’s effectiveness is also evident in the total number of board seats accumulated during this period. The percentage of white board seats has fallen 8% from 85.4% to 78.3%, while the percentage of Asian board seats has increased 4% from 9.7% to 13.6%, and Black boards seats doubled from 2.9% to 5.8%. Unlike their counterparts, Latino board seats increased less than 1%, from 2.1% to 3.0%, making the Latino community the most underrepresented in California boardrooms.
“California AB 979 had started to close the representation gap on public company boards. But progress is slow for Latinos who have dismally increased their share of board seats in the state from 2.1% to 3.0%. California corporations are best served by board members who represent their customers, employees and the growing Latino market,” said Elizabeth Oliver Farrow, Board Chair, Latino Corporate Directors Association.
Women Directors–Total Board Seats
Mandates from both AB 979 and SB 826 influenced board composition during the 15 months ending December 31, 2021. Latinas are by far the least represented in California boardrooms holding only 1.5% of total board seats, an increase from .7% on October 1, 2020. White women hold 22.2% of California board seats, an increase from 19.8% at the start of the period, Asian women hold 5% of seats, an increase from 2.4%, and Black women hold 2.9% of board seats, an increase from 1.5%. As a whole, women of color hold just 9.4% of all board seats in California even though they comprise more than 30% of the state’s population. Only 42.5% of all California public companies have women of color on their boards.
LCDA tracks all California public companies and has provided a list of those corporations that have added a Latino director to their board in the report.
LCDA partnered with fellow national Latino organizations to form Latino Voices for Boardroom Equity (LVBE) which reached out to every California public company that did not have a Latino on their board. Working one-on-one with corporate boards and their search firms, LCDA has challenged the myth that Latino board talent is difficult to find. LCDA tracks Latino board directors and C-level executives nationwide, and serves as a resource for public and private company boardrooms.
“LCDA and Latino Voices for Boardroom Equity are working directly with California public company boards, supporting their diversity efforts by identifying experienced Latino board talent with the skills boardrooms require. We are a resource for boards and their search firms in helping to identify Latino directors with the expertise, experience, and skills that boardrooms need now,” said Ana Dutra, Board Co-Chair, Latino Corporate Directors Education Foundation.
ABOUT California AB 979
On Friday, April 1, 2022, a Los Angeles County judge ruled that California AB 979 violated California’s constitutional equal protection clause. AB 979, enacted in September 2020, requires that California headquartered public corporations include directors from underrepresented communities on their boards of directors. The judge granted a summary judgment to Judicial Watch who argued that the law was unconstitutional.
ABOUT California SB 826
On Monday, May 16, 2022, a California Superior Court judge ruled that California SB 826 was unconstitutional because it violated the state’s constitutional equal protection clause. Enacted in September 2018, SB 826 requires that California headquartered public corporations include women on their boards of directors.
ABOUT Latino Corporate Directors Association (LCDA):
The Latino Corporate Directors Association (LCDA) is a national organization promoting C-level and board diversity to maximize business success. LCDA serves as an advocate and resource to corporate boards, search firms, private equity and institutional investors interested in gaining access to exceptional Latino board talent. Our program areas focus on growing the supply of high-caliber boardroom candidates and providing quality corporate governance programming for experienced and aspiring directors.
ABOUT Latino Voices for Boardroom Equity:
In September 2020, LCDA launched Latino Voices for Boardroom Equity, in partnership with a growing list of national Latinos organizations including the League of United Latin American Citizens (LULAC), UnidosUS, Mexican American Legal Defense and Educational Fund (MALDEF), the United States Hispanic Chamber of Commerce (USHCC), the Association of Latino Professionals for America (ALPFA), the Hispanic Alliance for Career Advancement (HACE), the National Hispanic Media Coalition (NHMC) and the Latino Donor Collaborative (LDC). This initiative asserts diversity without the inclusion of Latinos is not acceptable. The objective of the Latino Voices initiative is to triple US Latino representation on public company boards by 2023 by targeting corporations with no US Latino representation.
Monique Navarro (915) 790-7788
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SOURCE Latino Corporate Directors Association