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The Latino Corporate Directors Association (LCDA) recently released its review of 662 publicly-traded California headquartered companies, identifying 233 companies with all white board of directors.
In March 2020, LCDA announced its analysis of women appointed to boards following the enactment of SB 826, finding that the largest number of appointments, 77.9%, went to white women, followed by 11.5% to Asian women, 5.3% to African American women, and the lowest number, 3.3%, went to US Latinas. Alarmed at the lack of Latina appointments in a state where the Latino population is 39.4%, LCDA conducted further analysis of the ethnic and racial composition of all California public company boards.
LCDA's new review of all 662 California companies registered on the NYSE, NASDAQ, and AMEX concluded that 35%, or 233 companies have all white boards of directors. LCDA further concludes that SB 826, the California Gender Diversity Law, perpetuates the status quo of majority white board of directors. LCDA analysis of California public companies reveals that a number of corporations have chosen to comply with SB 826 by adding women that are not inclusive of ethnic and racial minorities, stated California LCDA Member and Former Secretary of the U.S. Small Business Administration, Maria Contreras-Sweet. The SB 826 mandate of women on boards has largely left out women of color on corporate boards in the most diverse state in the nation, underscoring the need to address fundamental flaws in the state legislatures efforts to diversify California corporate boards, added Contreras-Sweet.
"California lawmakers and corporate America must understand that gender diversity is not enough. An all-white male and female board of directors is not diverse. Board composition that lacks Latinos and African Americans, is not reflective of California diversity," stated Linda Griego, Former Deputy Mayor of Los Angeles and LCDA Member. Adding, "California Latinos are an economic powerhouse driving growth in every sector of our state's economy and we should be represented on every public company board in California."
Further analysis revealed of the 662 companies reviewed, 429 companies or 64% have at least one ethnic or racially diverse board member. Of the 429 companies considered ethnically or racially diverse 281 (66%) have at least one Asian, 105 (25%) African-American, 87 (20%) Latino, and 43 (10%) non-white/Other.
In October 2018, California enacted SB 826, the first national law to diversify public boards in the state by mandating female participation on those boards. According to data from Equilar which has been supplemented by LCDA research, 511 women have been appointed to the boards of 415 companies since the law was enacted.
Unfortunately, even though California is the most racially diverse state in the nation, nearly 78% of the women appointed to these boards are white women. Hispanics comprise more than 39% of California's population which means that one in five people in California is Latina. However, just 17 women, or 3.3% of the women appointed to boards during this period are Latina. The table below shows representation by white, Latina, Asian, and African American women, compared to the size of the population by race in the state.
The LCDA Latino Board Tracker shows the numbers are even smaller on Fortune 1000 boards where 1.1% of California seats are held by Latinas. On the Russell 3000 index, Latina representation is miniscule, with less than half of one percent of the nearly 4000 California board seats held by Latinas (based on LCDA's analysis of ISS data of Russell 3000 companies, July 2019).Learn more about LCDA's Latino Board Tracker methodology for identifying individuals of Latino ethnicity.
With only 1.1% of California Fortune 1000 board seats, Latinas are severely underrepresented.
77% of all Fortune 1000 companies do not have a Latino on their board
76% of California F1000 companies do not have a Latino on their board
In California, Latinos occupy 3.7% of all F1000 seats; Latinas, 1.1%
Latinos hold just 2.7% of board seats on the F1000 Latinas, .8%
The Latino population in California is growing at a much faster rate than the states non-Latino population. It is projected Latinos will comprise 43 percent of Californias population by 2030, increasing to 49 percent by 2060. Latinos will make up nearly half of all Californians by 2060.
California companies that fail to reflect this growing demographic in their boardrooms risk falling behind on building a board that is well-positioned to address a future where 25% of their workforce and customer base will be Latina.
These findings quantify what most diversity advocates already knew even in California, companies are largely selecting white women to achieve diversity on boards, as outlined in recent research published by Catalyst on Fortune 500 boards where women of color hold just 4.6% of all board seats.