California outlawed all-white-male boardrooms – reshaping corporate America
latimes.com
latimes.com
The answer is to Go Galt!
The speed of the courts depends on the political party of the offender, of course. See also: Executive Orders that can be removed and how swiftly they are removed.
My understanding was there is a smaller pool of qualified women to pick from due to career/family balance choices.
As much as I support equality and diversity, I'm even more strongly opposed government over-reach. The state shouldn't have a say in who gets a job at a private (non owned by state) company.
As the article state, I hope this will get over-turned by the courts.
This would set a bad precedent. If the state can dictate the kind of person gets a highly coveted job, what else can state dictate?
Yes, exactly. Which is what has happened to women and minorities in this country forever.
What do stocks have to do with it?
I understand the difference between equity and equality, but I don’t know what exactly you mean to imply here, and don’t want to draw any hasty conclusions about this comment.
But as the critical race theory worldview defines it, "equity" involves unequal treatment of people and discrimination (decisions made about how to treat people) on the basis of race.
The idea is to retroactively create equal outcomes, not equal opportunities in the present.
The problem is: a society can't create either equal outcomes or equal opportunities by intentionally discriminating one way or another, since doing so (1) fails to solve problems at their source and (2) creates new problems.
In other words, love is the answer, not hate.
Society can't create equal outcomes, period. People don't want the same things in life. Some want to be of service to other people, some want to be rich so they can buy a yacht. You can't just give yachts to everyone and call that equality.
We do need safety net and equal opportunities
Personally I think the whole idea of equality is stupid because it just makes people compare their life to others instead of thinking about what they want in life. But again if we have to have equality then it's equal opportunities and more importantly, safety net.
They aren't saying, "you have to hire this person". They're saying you can't hire exclusively this type of person that currently dominates the top of society.
Given that these boardrooms don't diversify themselves, what is the actual problem with it?
No one was fired.
I understand the appeals to equity vs equality. I'm saying this is a subtle distinction hinging on who is making choices and how. I don't want the government deciding who is diverse enough or historically oppressed enough or underrepresented enough. It will get it wrong far too often.
Plus, by making this a factor, you're just kindling actual racism by pitting white males against everyone else. The resentment created by rejecting someone for their gender or color of skin does not subside just because the attributes happen to be white and male.
I get the intention, but fighting racism with racism just doesn't work.
No, that's not what Federal anti-discrimination law says. It only says you can't refuse to hire certain people on the basis of a protected characteristic (of which race is one, but not the only one). It says nothing about refusing to hire certain people for other reasons that don't have to do with a protected characteristic.
(Btw, corporate boards of directors aren't even "hired"; they aren't employees. So it's not even clear what, if any, Federal anti-discrimination laws about hiring and employment would apply to them.)
> Given that these boardrooms don't diversify themselves, what is the actual problem with it?
There are two actual problems. One is that you can't have a government that only exercises its power wisely. For every mandate the government makes that happens to move things in the right direction, there will be many more that move things in the wrong direction. The people who are attracted to government jobs where they get to tell other people what to do aren't benevolent helpers; they're people who like power. All history shows that such people are precisely the people you don't want telling other people what to do.
The second problem is that dictating that people of certain races must belong to corporate boards is just as wrong as dictating that people of certain races can't belong to corporate boards. Both are looking at something that is irrelevant to the actual job, which means they aren't actually improving the corporations; the corporations can still do just as much damage as they did before, just now they'll be doing it with a "diverse" board.
The only real way to fix corporate governance is for people who would do better jobs than the board members of current corporations to form their own corporations and out-compete the current corporations.
I wasn't referring to Fed Discrimination Laws. I was referring to the California law. Sorry if that wasn't clear.
> The people who are attracted to government jobs where they get to tell other people what to do aren't benevolent helpers; they're people who like power. All history shows that such people are precisely the people you don't want telling other people what to do.
Why do you think that's not already the world we live in? Police officers are the epitome of this. I'm just not convinced things get much worse with this.
> The second problem is that dictating that people of certain races must belong to corporate boards is just as wrong as dictating that people of certain races can't belong to corporate boards.
I disagree with this. They are vastly different. One is completely excluding a group from the table. The other is ensuring that a group has a spot at the table. And boards, in particular, are the type of position where there are many qualified people. If we did a controlled study I'd be shocked if there was a negative difference in performance of companies with Black board members.
> The only real way to fix corporate governance is for people who would do better jobs than the board members of current corporations to form their own corporations and out-compete the current corporations.
In order to do that you have to fix a bunch of other stuff in society as well. Companies don't live in a meritocratic bubble.
Umm you can have an all white board with the new law.
In other words, you've just reinvented Plato's Republic. Historically, the closest things to this have been societies like the Puritans or Geneva under John Calvin, or in the 20th century, Nazi Germany and the Soviet Union. How well did those experiments in "managed care" work out?
The closest thing to it in today's world is probably China or North Korea. If you think that's a good idea, you're welcome to go live in one of those countries.
> Unfortunately short of that we’re likely to never have real equality.
We won't have "real equality" even with such a draconian plan, because the inconvenient truth is that every human being is a unique individual. There is no such thing as "real equality" because human beings are all different. You can't pigeonhole human beings into boxes. You can't "manage" their care so they fit into whatever preconceived utopian fantasy you happen to have. Human beings are free individuals and we all have to figure out for ourselves how best to use whatever we have been given. And since we all get given different things, we are going to end up wanting different things, needing different things, and making different choices. No central planner can possibly comprehend all that. And every time it has been tried, it has ended up costing a lot of lives and a lot of misery even for those who managed not to be killed outright.
I hope you’ll never be in any position of power to realize this “solution”.
It wasn't since you explicitly said "Federal government" in your previous post. I agree that state laws can say different things.
> Why do you think that's not already the world we live in?
I didn't say it wasn't. If you already agree that what I said is the case, then you should be all the more opposed to more of the same.
> I'm just not convinced things get much worse with this.
Any extension of government power makes things worse. If the increment of "worse" seems small with some particular change, well, the phrase "frog-boiling" wasn't coined for nothing.
> One is completely excluding a group from the table. The other is ensuring that a group has a spot at the table.
You are misunderstanding my point. The current state, where many corporate boards are all of one race and one gender, is not a product of government fiat; it's a product of private decisions. But there have been cases in the past where similar states were products of government fiat. Those past government fiats are now pretty much universally agreed to have been very bad things. My point is simply that this is the same kind of thing, and should be considered bad for the same reasons. The issue is not "spots at the table". The issue is government fiat.
> In order to do that you have to fix a bunch of other stuff in society as well.
Like what? If you mean, like certain corporations having huge advantages because they have privileged access to things like loans with government printed money, lobbyists with the ear of government officials, and so on, yes, I agree all those things need to be fixed--and they're all just more examples of government power being misused. As the saying goes, the root problem is not that politicians can be bought but that they have something valuable to sell. That is what needs to be fixed.
> Companies don't live in a meritocratic bubble.
In a free market, where the government did not play favorites at all, they would--they would either have to make and sell something people want to buy, or go out of business. That's the only kind of "merit" that matters to us as consumers. But we can't exercise that ultimate control if the government keeps getting in the way.
I sometimes watch professional sports, in particular basketball. There is very, very little diversity.
My son is in his first year of teaching elementary school. He tells me he is almost alone in the school, gender-wise.
I think this is a very complex topic, with lots of nuances.
Demographics are funny because they're really easy to satisfy. People come from many backgrounds.
This is just one of many restrictions on individual choice we make for the sake of social cohesion. All of us might choose to work for below minimum wage, but there are real risks there, so we ban it. All of understand how one might end up with a board of all white men, but there are risks there as well, so now it's banned. It does not seem like a meaningful restriction for any serious enterprise.
e.g. https://delong.typepad.com/sdj/2014/06/barry-goldwater-decla...
"The two portion so this bill to which I have constantly and consistently voiced objections, and which are of such overriding significance that they are determinative of my vote on the entire measure, are those which would embark the Federal Government on a regulatory course of action in the area of so-called "public accommodations" and in the area of employment--to be precise, Titles II and VII of the bill. I find no constitutional basis for the exercise of Federal regulatory authority in either of these areas; and I believe the attempted usurpation of such power to be a grave threat to the very essence of our basic system of government..."
This law is saying that you must take into account race and gender in your hiring decisions.
> The state shouldn't have a say in who gets a job at a private (non owned by state) company.
that's exactly what the Civil Rights Act does. The state has been telling you how you are allowed to make hiring decisions for a while now.
edit:
And here's Strom Thurmond on the Civil Rights Act:
"This bill would take away the rights of individuals and give to government the power to decide who is to be hired, fired and promoted in private businesses."
https://teachingamericanhistory.org/document/debate-on-the-c...
https://listingcenter.nasdaq.com/assets/Board%20Diversity%20...
You have to argue that the state shouldn't be able to impose requirements on the situations where it relaxes individual liability, not complain about about the natural rights of corporations (they don't have any).
Except for Native Americans, where active tribal affiliation is sometimes required, racial/ethnic identity in the US is generally purely self-identification, despite having legal significance for various purpose (e.g., government contracting and minority-owned business incentives/requirements.)
Today, I honestly feel sad to see the decrepitude of this once beautiful lady we were in love with. She does not inspire me anymore. Sad.
Nothing will really change here in practice.
I do not think it is unreasonable for a corporate board to be required to include at least one woman or at least one non-white person. I also think it's quite shocking that all-white-male boards are so common that this is even necessary. It's an artifact of institutional racism and sexism that is easy to observe in hard data, and so this law feels like a single step towards modern equity.
Example?
We've seen already in the US that culture trumps almost everything else. I've had people tell me that they'd rather their daughter marry a poorer white guy than a richer black guy.
That said, all this really ends meaning is that the all-white board hires a couple of tokens they provide no power to and make their lives hell. It's standard process.
They don't care for competence, pre-se, but connection.
Board room implies scale. If you don't have diversity at scale, in so many senses of the word, your doomed to fail anyway.
So many knee jerk reactions are a sad reflection of this community, though.
That's not necessarily true. There are plenty of organizations all over the world that are not "diverse" but those institutions manage to succeed. Not every company needs to have a board room that looks like a university admissions pamphlet in order to operate and respond to competition.
The market would have slaughtered tech firms if this were true.
Then why do we need a law banning it? If these white-male-only-board-led companies are doomed to fail, they should be outcompeted by sufficiently-diverse-board-led companies.
I have a feeling the physical attributes of the board doesn't actually matter when it comes to a company's performance.
If that were true, none of the tech giants in the US in the white male dominated '50s-'80s would have existed: IBM, AT&T + Bell Labs, Xerox + PARC, Digital Equipment Corporation, etc.
The ambiguous part of this law that this is employment (or something close enough to employment) contingent on race and gender. Imagine a single woman of color on the board resigns and the seat must be filled. If the best candidate is a white male, he will be rejected based on gender and race.
> quite shocking that all-white-male boards are so common
Not if you knew the distribution of wealth by race (and gender) in America. Black people in America are poor after being slaves unable to own property for generations. Until very recently (in living memory) widely denied due process, access to employment, social and labour organizations, etc. that would enable building wealth. To this day, still disproportionately denied. There is less intergenerational wealth to transfer. Less educational capital. And so on. A different but cousin tale for women.
This is one angle of systemic racism, I suppose. But to my eye the solution is mostly to address the poverty by the transfer of wealth, not legislate representation among the elites. Especially when you can do wealth transfer to poor people without legal racial classification systems, which is a notion that immediately evokes opposition from many.
Progressivism sometimes takes time and energy that previously went to helping the working and middle classes, and redirects it off into the aether to help the very top of the pile.
Get left enough and universal healthcare, universal college and universal child care become a lot more important than equality of CEOs.
Or are we pretending that the various different non-Anglo/WASPy "whites" in Europe have the exact same cultural & socio-economic headstart in the US as the US whites?
It's a stupid rule.
> are quite shocking
Sheesh, your hyperbole is showing.
I was born and raised in a poor, rural town with a high crime rate. Neither of my parents had a trade nor a university education. It is very obvious to me that I am culturally different from a lot of other educated people in tech. Hell, the military even covered my education. I don't hold the same values or interests as my peers, but I'm a white male so I get lumped into a "homogenous" group.
Reflexively, this sounds like a stupid law to me, but unless the LA Times is just lying, it sounds like it's been successful and similar policies are now being pushed privately, apparently by Nasdaq, Goldman Sachs, BlackRock, and even the U.S. Chamber of Commerce is behind an effort to do something similar but without actual punishment.
It's probably illegal, though, and seems destined to eventually be struck down whenever it gets to the Supreme Court.
I also share your surprise that all white-male boards were even common before this. Mostly white-male boards I expected, but not 100%, at least for publicly traded large companies. Anybody trying to say that was meritocracy is fooling themselves. There is no way in hell there is that much of a skew in merit across gender and race boundaries.
At the same time, I very much agree with the other comments saying this is focusing on exactly the wrong kind of progressivism. It feels like George Bush putting together the most ethnically diverse cabinet of all-time, but they were still uniformly war hawks, liars, and authoritarians. Making the 0.00001% of the world allowed to have power more diverse doesn't change that power is still way too centralized. It's fine for the extreme upper echelon of women and ethnic minorities but does nothing for the vast masses of actually underprivileged people.
It’s the long pipeline. Bias from 30 or 40 years ago determined who got a chance to earn executive experience and build connections to become qualified to hold a board seat today.
We should expect effectiveness, not fairness, from meritocracy, because merit was often not fostered fairly and much potential went undeveloped.
That said, there is hardly any company that would want to be the plaintiff in this case: "So, you're the company that led the lawsuit trying to keep corporate boards all white and male" is what the headlines will say, and no corporation would want to be branded as such.
Maybe we should discuss instead what's leading to such lack of diversity (misaligned incentives? lack of opportunities?)
We can solve our inequality problems without making us weak. The US army took equal opportunity seriously long ago, their model works and can be replicated.
Except that everywhere, including when admission is solely based on performance on a test you can study for, there end up being massive racial disparities.
Other races need to be shoehorned in.
This has often been called the "old boys club", and the persistent pattern of boards being overwhelmingly white and male is great evidence that there has a (predominately unconscious) bias in the selections.
Since the makeup of these boards affects the decisions made by these companies, and those decisions have a large impact on society, society (California) has decided that they have to clean up their act and make those decision makers at least vaguely reflect the makeup of that society.
1. If White is understood to be a "race," then racial groups can distinguish ethnicity, nationality, extended ancestry, phenotype, or self-identifying group. It's not clear what "white" is, legally speaking. There may be legal precedents set for other "races," for other purposes, but they shouldn't apply across the board (see 2).
2. The typical racial groups in the US are highly asymmetrical. Think of Latino, Hispanic, Black, White, Asian, Pacific Islander, Mixed, etc. In ordinary usage, these all pick out different combinations of dimensions. Compare this to another group predicate, such as color. When we identify colors, we use the identical process to distinguish pink from blue, green from orange, etc.
3. This should go without saying, but one should be able to earn a board seat no matter their race. Further, if we care at all about merit (boardrooms are peak capitalism, after all), it should be possible for a group of all Black, all White, all Chinese, or all Jewish to earn seats on a merit basis.
4. No matter how you cash out racial differences, they are ultimately superficial. Putting this much importance on superficial categories places more importance on race and (almost certainly) division.
5. The move toward "equity" is hollow. To me, it looks like rhetorical salad dressing for shifting equality to a different variable to favor one demographic over another. It's equality, but with respect to a different purpose/demographic. There is literally no way to make any law universally equal for everyone. Laws purporting equity, such as this, are passed at the expense of the majority and the *supposedly* powerful; let's stop pretending otherwise.
6. IANAL, but this is probably illegal.
Pure spectacle. We need workplace democracy and social services for everyone! Healthcare, housing, and integration on a local level. That's what it means to change society, not changing the paint on a machine that grinds people up and spits them out.
The country got worse thanks to Obama's presidency because he refused to even chip away at pure financial capitalism and let people get crushed in the financial crisis. His refusal to help people created the "liquidity trap" that strangles the economy because people have no money to spend in an economic system that requires a buyer and a seller.
> While Black representation on boards has grown amid the nation’s reckoning on race, people who are not white or straight still hold only 18.4% of the board seats in the top 1,000 public companies nationwide, according to data released in August by executive data firm Equilar.
> There were at least 115 California public companies that did not have a single woman on their board in 2017. Now there are only five...
https://www.pewresearch.org/fact-tank/2019/07/30/most-common...
So I wonder if that has some thing to do with it - once the later generations age into the "leadership" ages, boards should naturally become more diverse over time.
When did you ever have a job that you didn't learn 90% of what's needed, while on the job itself?
Cries for meritocracy are woefully ignorant for this fact alone.
If you want meritocracy, focus your energy on improving education. Until then, your worth is determined mostly by whether someone gives you a chance, which depends on your skin color, location, and last name, aka luck.
It's shockingly sad to see people defending state discrimination based on race and sex.
If the state continues to allow a small subset of the population to discriminate based on race and sex, isn't that also the state defending discrimination?
Example?
The older and more specialized my roles get, the less I'm learning about how to do the job on the job, and the more I'm just learning the small differences at the current location.
I assume that's why CEO's are routinely hired away from other companies. I assume the stuff they'll learn at the new job is the specifics of that company, but not "how to be a CEO".
I would assume the same of some board members (as I understand it, they don't all bring the same things to the table).
Nonsense. If you can code, you can start next week. You can set up a website and start selling things. If you make good music, people will come. If you solve a problem that saves people time or money, they will buy it.
Apart from people like you, most people don't care all that much about race.
"Johnson, as the youngest member, the board has decided that you must identify as a woman for regulatory compliance."
What are woke progressives going to do, deny that a man can identify as whatever gender she wants?
Can you just identify as a man on Monday, than a woman on Tuesday?
In other words, is sex a flag in your documents, or just something you say to be?
I am asking because I read that the racial identification is purely declarative.
I think it's important to remember that there's a difference between legal definitions and what the modern, en vogue morality is. (and keep in mind that the modern morality is not defined, but can change over time as new situations emerge)
In terms of legal documents such as what sex appears on one's drivers license, I imagine that somebody wanting to change their official sex designation can be done, but would require filing some change request or affidavit with the state.
In terms of modern morality, gender identity (gender is considered to be different from biological sex) is considered fluid and may change from day to day. I believe that some people may even choose to identify as non-gender, or multiple genders at once.
Racial identification is another question mark, particularly for Americans and is very convoluted. Look at questions 8 and 9 on the Census form as an example of how officialdom tries to determine race.
https://www2.census.gov/programs-surveys/decennial/2020/tech...
In America particularly, laws based on race are really dumb. What the hell do you do with somebody who is a mix of white and black or is a white person with a hispanic background? Do we need government committees to try and determine if somebody is too white to qualify for some job?
As far as the modern morality goes, there are some number of people who self-identify as trans-racial and seem to identify with a different racial group. I don't know what will come of that.
So there is a formal place where someone's sex is "assigned" (at birth, I presume). In other words you cannot claim for cases with a legal consequence that you are a man when it says "woman" in your papers.
i understand that you can declare yourself as whatever, but it does not change your rights and onbligations.
> Racial identification is another question mark, particularly for Americans and is very convoluted
Is there a similar thing for races? Is this "objectively" assigned (though your ancestry, for instance), or is it purely declarative (I am white, but declare to be black and therefore get access to, say, minority advantages)?
In France we legally have a few things that are non-discutable and part of you papers (sex, nationality, marial status, ...). This an change, of course, but requires going through a procedure that changes what is in the papers. We do not have anything "declarative" that would have a legal meaning (and that would open the door to advantages for instance)
Regarding US racial statistics, I don't know if there's any kind of official document that enforces what "race" you are and everything is essentially self-reported, as far as I am aware.
As I have argued, following Walter Michaels and others, within that moral economy a society in which 1% of the population controlled 90% of the resources could be just, provided that roughly 12% of the 1% were black, 12% were Latino, 50% were women, and whatever the appropriate proportions were LGBT people. It would be tough to imagine a normative ideal that expresses more unambiguously the social position of people who consider themselves candidates for inclusion in, or at least significant staff positions in service to, the ruling class. - Adolph Reed, Jr.
I think a lot of these dumb laws get pushed through because few people are willing to speak out against them for fear of being mischaracterized. The liberal Democrats are riding the wave of the cultural zeitgeist.
For example, and I'll link to an article for all of this at the bottom, Hispanic people are the biggest ethnic group in California, making up 39.4% of the state, but 83% of public companies boards have no Latino or Hispanic board member. Latino and Hispanic Board members make up 2.5% of the population of California board members of public companies, and in the 12 months from June 30 2020 to June 30, 2021, only 3.5% of new directors were Hispanic.
I don't think you get those kind of disparities in this day and age if board members are awarded entirely on merit. I think there are often many qualified candidates for any position, but historical and structural and cultural reasons often push people to hire people like themselves, thus perpetuating inequity.
Maybe you disagree, but at the very least it seems like board rooms don't reflect the state's population very well.
The article talks about people like the Chief Medical Officer at Merck becoming a board member now, and a Black division head at United Talent Agency with 40+ years of experience becoming a board member now. Not exactly people lacking experience and expertise, but not people who were being asked to serve on boards.
If corporations are people, and if a person was only hiring white men for a particular role at a company and not looking to hire equally qualified candidates who happened to be women or minorities, I would consider that the opposite of a meritocracy, and likely indicative of discrimination. And if that was what's happening, I don't think the problem was going to correct itself. If it was, I imagine it would have done so by now, or at least there would have been much greater progress.
Further, studies from Morgan Stanley and others linked in the article suggest that diversity is better for shareholders! If true, then these changes help pave the way for people who have more merit in terms of benefit to the corporation. I don't think diversity is some magic that makes companies run better, I think racism and sexism makes people ignore the value that people could bring in to a company in favor of choosing people more similar to themselves.
Corporations under these two laws have to have someone who is a woman and someone who is part of a minority community, and I believe they can be the same person, so it's not like white male board members are going to disappear just because a board seat or two is required to be more diverse.
A white male board member is almost certainly wealthy, so nobody is going hungry even if they lose a board seat, and boards can, I believe, just add additional seats, so nobody actually has to lose their position.
Ultimately it seems like this may make companies perform better, and promote racial and gender equity, and it doesn't cost taxpayers anything to make it a condition of a California corporate charter.
So what exactly is the real harm, when compared to the benefits?
https://www.reuters.com/business/sustainable-business/califo...