On Tuesday, a bill that would set up mandatory minority quotas on California company board of directors was heavily amended once again as it awaits a hearing in the Assembly.
AB 979 minority quota minimums
Assembly Bill 979, authored by Assemblyman Chris Holden (D-Pasadena), would require companies to impose strict minimums on the number of African-American, Hispanic, and Native American board members a company must have. For companies with fewer than 4, then 1 member must come from one of those minority groups. For companies with between 4 and 8 board seats they must have at least 2 minority held seats, with any larger boards than that having at least 3.
Should AB 979 pass, the law would become active in 2022. Any company that fails to comply by then faces large fines from the office of the California Secretary of State.
AB 979 has also been compared to SB 826, a 2018 bill that was passed and signed by former Governor Jerry Brown in which it gives similar mandatory board quotas for women. Many in Sacramento have even noted that AB 979 has almost identical quotas in place.
Support for AB 979
Supporters of the bill have noted that few board members of companies in California are not white or of Asian ancestry. The bill notes that the Equal Employment Opportunity Commission (EEOC) has found that “highly ranked universities graduate African American and Latino computer science and computer engineering majors at twice the rate that leading technology companies hire them.” In the same study, the EEOC found that less than 1% of all Silicon Valley executives and managers were African American.
“Corporations have money, power and influence,” said Assemblyman Holden earlier this month. “If we are going to address racial injustice and inequity in our society, it’s imperative that corporate boards reflect the diversity of our state.
“Corporations with ethnically diverse boards have shown to outperform those that lack diversity.”
“Soon after the social unrest following the killing of George Floyd, many corporations publicly stated their support for diversity and Black lives. Critics, however, have pointed out that this public support for social justice movements often does not lead to long-term structural change in hiring and retention policies of a diverse staff and leadership.”
Assemblywoman Cristina Garcia (D-Bell Gardens), agreed with Holden on the issue.
“The lack of diversity on California’s boards and upper-level corporate positions is a challenge we urged corporations to address on their own during our time in the Legislature,” said Assemblywoman Garcia. “However, it is clear we can no longer wait for corporations to figure it out on their own. By ensuring diversity on their boards, we know the corporations are more likely to both create opportunities for people of color and give them the support to thrive within that corporation.”
Allegations of discrimination and not fairly choosing the best candidates from AB 979 opposition
Since being heavily amended from the education bill it originally was earlier this year, a large bloc of opposition has come out against the bill.
Charges of reverse discrimination, not allowing the best candidates to receive board seats, and Assemblyman Holden discriminating against other minorities such as Asians and Pacific Islanders (API) have been leveraged against AB 979.
“This bill is despicable,” noted Christina Tan, a Pasadena resident who works in a law firm, in a California Globe interview. “I feel betrayed by voting for Holden last time around. If we’re going to increase minorities in board positions, that should include all minorities, and here he is saying that we don’t deserve that. I can’t believe this.
“He wanted things to be fair for minorities, but now he’s saying that it should be more fair for other minorities. This is straight out of Animal Farm.”
“This just hurts whites, Asians like myself, and others who worked hard to get to these heights but are slammed back from those opportunities.”
“Does he have any decency left?”
Assemblyman Holden has responded to these allegations before in previous statements, but did not confirm API inclusion to AB 979.
“We are having conversations with leadership in the API community to figure out how to address their concerns,” Holden said this week. “AB 979 focuses on African American, Latino and Native American communities as a crucial first step. We took this approach because these communities have difficulty breaking into the white-collar and professional workforce, even though eligible candidates have completed the educational requirements and have the professional maturity to succeed in these industries.”
“We do recognize the glass ceiling for other groups, and will continue these important discussions as it relates to the bill.”
Others have also noted the discrimination concerns of AB 979.
“Jobs should go to the best candidates regardless,” William Clemens, a former board member of two Californian companies, told the Globe. “On boards, we look over everyone who can possibly take on the position. And board members, well, they need to be well-rounded in all facets of the company so everyone can be on the same page or have some working knowledge of every division or department.
“When quotas come into place, that means not having those well rounded candidates and ‘favoriting’ others. It can also mean fast-tracking people through, which companies would need more than a year to do. But that also means rising them above others who are working hard as well.”
“What we’ll see happen if this is passed is we’ll see a few employees, whatever minimum is needed, jump around different places to get the feel, with a few more on standby, so that they can be put in at any time. But it would otherwise be business as usual. That’s how most companies will get around this. Just pick a lucky few who are closest already and make sure they’re in with the company line.”
“It should always be about merit and experience, end of story. But under this bill, merit walks I guess.”
AB 979, having bounced around several Senate committees without a vote since being reintroduced last month, is currently awaiting a hearing in the Senate Banking and Financial Institutions Committee.
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