In September of 2018, California Senate Bill 826 was signed into law by former Governor Jerry Brown, requiring all publicly-held corporations in the state to have at least one woman board member.

Companies with five board members are required to have at least two women board members and those with six or more are required three. They also have until 2021 to comply with the order or risk facing fines.

The goal of Bill 826 was to get more women in board rooms across the state in an effort to diversify them. 

However, a March 2020 study by the Latino Corporate Directors Association (LCDA) of women board room appointees at California’s 662 publicly-traded companies found that while the desired shift is happening, it is in turn further perpetuating the lack of racial representation in board rooms across the state.

Of all the women brought into boardrooms since Bill 826’s passing, 77.9% of them were white women, 11.5% were Asian women, 5.3% were Black women, and the least represented were Latinas at 3.3%.

That’s already concerning considering California is statistically the nation’s most diverse state, but even more so because Latinos have long surpassed whites in the state as the largest racial demographic. 

“A number of corporations have chosen to comply with SB 826 by adding women that are not inclusive of ethnic and racial minorities,” said Maria Contreras-Sweet, LCDA member and former Secretary of the U.S. Small Business Administration.

Seeing the major disparity between white women board members and Latinas, LCDA conducted another study looking at the overall racial diversity of California’s 662 publicly-traded companies.

The new study, released on July 14, found 233 companies, or 35% of California’s publicly-traded companies had all-white boards. 

Much like in the study of women entering California board rooms, Latinos also represented the smallest share of representation at 20%, or only 87 companies that have at least one Latino in their board room.

In response to the wider study, Linda Griego, former Deputy Mayor of Los Angeles and LCDA member, called out California’s leadership for stopping at legislating only gender diversity in the boardroom.“An all-white male and female board of directors is not diverse. Board composition that lacks Latinos and African Americans, is not reflective of California diversity," she said. "California Latinos are an economic powerhouse driving growth in every sector of our state's economy.”

Further towards Griego’s claims, a McKinsey study from Jan. 2018 found a strong correlation between a company’s financial performance and the racial and ethnic diversity of its corporate leadership. 

“Diversity in the boardroom, that is inclusive of US Latinos, contributes to improved decision making, increases employee engagement and enhances the corporate bottom line,” said Roel Campos, LCDA Chair and former SEC Commissioner.

In California, this same debate is also happening in higher education. 

In November, voters in the state will have the opportunity to repeal Proposition 209, which banned affirmative action in the state 25 years ago. 

Assembly Constitutional Amendment 5 (ACA5) passed the California Senate on June 24, sending it to the November ballot. 

The bill eliminates language from California’s Constitution that prohibits public universities, schools, and government agencies from using race or sex to determine admission, and hiring decisions.