As a veteran member of more than 20 corporate boards, including Volvo Car AB and Wynn Resorts Ltd., I hope that the bill that requires major companies based in California to put female directors on their boards (“State Pushes for Women on Boards,” U.S. News, Aug. 30) isn’t signed into law.
The marketplace is already working and we are seeing significant shifts in the addition of women joining public boards. For example, major index funds are now mandating that companies must have a minimum of two women directors or else they will withhold their votes.
We have experienced the pain of unintended consequences with the Sarbanes-Oxley Act of 2002, which resulted in a precipitous decline in initial public offerings because of the expense and burden the law puts on companies. The biggest risk in the California bill, which I see in blinking neon lights, is that even California-headquartered companies incorporated in Delaware would be subject to the new gender-diversity regulation. Corporations carefully review and select where they will incorporate based on the protections and regulatory framework a particular state offers. Delaware has long been the most business-friendly corporate framework and is widely embraced.
Diversity also needs to reflect ethnic, global, digital and technology diversity, not just gender. Corporate boards are strongest when there is a range of perspectives, experiences and viewpoints.
Chief Executive, Baja Corp.
Coral Gables, Fla.