Judge strikes down California board gender quota law

California corporate boards do not have to include a minimum number of women, a California Superior Court judge ruled Friday, citing a lack of a “compelling state interest.” The state failed to prove that a gender-based requirement “was necessary to improve the economy, boost opportunities for women in the workplace, and protect California taxpayers, public employees, pensions and retirees,” according to the decision.

The California law, enacted in 2018, required public companies to have at least one woman on their boards by 2019.

In her ruling, Superior Court Judge Maureen Duffy-Lewis stated that she was swayed by arguments that there were numerous avenues for supporting economic growth and opening new avenues for women, and cited a lack of credible evidence that requiring a minimum number of women on boards would directly result in the promised results of growth and equity. The reams of research documenting a correlation between a greater number of women on boards and better company performance did not prove causation, the judge ruled.

The ruling is congruent with another released on April 23, which found unconstitutional a similar quota for racial and LGBTQ diversity on the boards of California-based, publicly held companies.  

Meanwhile, in March, the European Union advanced proposed legislation that would require companies with at least 250 employees to have women occupy 40% or more of non-executive director roles, or a third of board positions, by 2027, Reuters reported.

[More: Fund managers need to flex voting muscles to force boards to appoint more women]