Sacramento State Capitol building on Capitol Way. Photo: Jason Doiy/ALM

A bill signed into law this week by Gov. Jerry Brown has made gender diversity on company boards not just a moral issue, but a legal one for companies in California.

Companies headquartered in the Golden State will need to have at least one woman on their board by 2019. Larger boards will be required to have more women, two out of five or three out of seven directors, and be given until 2021 to comply.

California's Senate Bill No. 826 comes a year into the #MeToo movement, which has prompted discussions on workplace gender equity. It's the first time a U.S. state has set a quota for women on boards, a rather controversial approach to boosting diversity.

Susan Keating, the chief executive officer of WomenCorporateDirectors, an international organization of women on boards that works to increase diversity, said that even among her group, there are differing views on gender quotas.

“We have members that are in California who not only supported the bill but were engaged in writing the legislation, and we have other members that ardently stand for deregulation,” Keating said.

She said WCD has focused on increasing the pipeline of diverse candidates rather than quotas. That's in part because California's mandate is the first of its kind in the U.S.

But California is far from the first jurisdiction globally to have a gender quota for boards. For a decade Norway has required corporate boards to be at least 40 percent women. Italy, France and other European countries have similar quotas, which have upped the number of women on boards. However, the board quotas did not seem to move the needle for women in other gender equity areas.

The Economist reported that in the decade since Norway's quota went into place, fears of unqualified women being appointed to boards mostly did not come to fruition and that qualified women were not stretched any thinner than their male counterparts.

In California, as in European countries with board quotas, companies that don't comply will be fined. For companies in California, the fine is $100,000 on first offense and $300,000 for subsequent violations.

Olga Mack. Photo: Jason Doiy/ALM

Olga Mack, the vice president of Quantstamp Inc., founder of Women Serve On Boards and a longtime in-house lawyer, said she believes having the quota as law will bring gender equity sooner.

“When it's illegal not to find women they tend to be found,” Mack said.

Mack advocated for the bill. She said that, because the number of women required increases by board size, there should not be a single token female board member, a concern of some quota critics.

Without regulation, women may still find a place in leadership—but that could take a century, Mack said, and the new law will help bring equity now.

“It's predicted for us to reach parity on corporate boards it will [take] 40 to 100 years, so it will not happen during my lifetime and not during my daughters' lifetime,” Mack said. “So I'm convinced we should be doing something on a policy front to change it in our lifetime, because one lifetime or two lifetimes is a long time to wait.”