In the Wake of California Diversity Rulings, We Have Only Begun to Fight - Keith Dorsey

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3 min readOct 6, 2022

I recently wrote an article for NACD Directorship Magazine that provides insight into how the rulings against California’s diversity bills have reignited warranted concerns about losing momentum in the cause to improve board effectiveness. Determining how to proceed in the wake of these decisions requires some reflection and regrouping.

“The push for diversity on boards began with pressures ranging from corporate scandals to constant change. The increasing pace of change has emphasized the need for refreshment practices to assure that boards have the human capital needed for companies to fulfill their mandates and deliver ongoing value. These pressures have led businesses, institutional investors, stock exchange indexes, government leaders, and other policymakers to argue for increased gender and ethnic diversity among board members — ideally enforced through regulations.

“However, In May 2022, California Superior Court Judge Maureen Duffy-Lewis ruled that California Senate Bill 826 violated the right to equal treatment. The bill required every locally headquartered publicly traded company to have at least one female board director by the end of 2019 and at least one to three female directors by the end of 2021. The decision to overturn Senate Bill 826 came only weeks after another Los Angeles judge ruled similarly against California Assembly Bill 979, which mandated that corporations need to diversify their boards with at least one member from Black, Latino, LGBTQ+, or other underrepresented groups.

“Despite worries that diversity’s benefits, including improved governance, decision-making, and financial performance, are at risk in the absence of legislation, we must not forget the power of the many other stakeholders that have rallied behind the cause and created their own forces for change. For example, Nasdaq created its own Board Diversity Rule 5605(f) that required all Nasdaq-listed companies to have at least one director who self-identifies as a female by 2023 and an additional director who self-identifies with an underrepresented minority or LGBTQ+ group by 2025. In addition, with $8 trillion in assets under management, the Thirty Percent Coalition uses its shareholder leverage to influence companies to increase board diversity. Nonetheless, for change to continue, the pain of staying the same needs to exceed the pain of changing. Fortunately, there are several things we can do collectively and individually to support change.

“Board members must build on the efforts of the various stakeholders striving for board diversity. These efforts include examining your existing board members, identifying your specific diversity needs, and locating the needed candidates.

“We have come a long way since our early efforts to improve governance, but we still have more to do. We will achieve the change we need through our ongoing and concerted efforts.”

Keith Dorsey is currently a managing partner and the US practice leader of CEO and Board Services at Boyden, a global executive search firm with 75 offices in 45 countries. Keith holds a Doctorate in Organizational Change and Leadership from the University of Southern California, an MBA from Pepperdine Universitys Graziadio Business School and a Bachelors degree in business administration from Charter Oak State College. He has over 25 years of leadership experience in human capital management, executive, consulting, and board roles. He is a Board Member of the software firm Vimly Benefit Solutions, Pepperdine Graziadio Business School, and the Financial Advisory Commission of the City of La Quinta. He is a Certified Director and Governance Fellow, National Association of Corporate Directors (NACD) and a member of the Executive Leadership Council (ELC).

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