233 CA-Based Public Company Boards Lack Racial or Ethnic Diversity

SB 826 CA Gender Diversity Law Perpetuates Status Quo of Majority White Boards

News provided by

Latino Corporate Directors Association

Jul 15, 2020, 10:05 ET

WASHINGTON, July 15, 2020 /PRNewswire/ -- The Latino Corporate Directors Association (LCDA) 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 legislature's 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."

California Headquartered Public Company Boards Research
Findings:
662 California public companies were reviewed from May 26, 2020-July 1, 2020.

Of the 662 companies, 429 (65%) companies have at least one ethnic or racially diverse board member
Of the 662 companies, 233 (35%) companies have all white board compositions

Ranking by Ethnicity Of the 429 company boards considered ethnically or racially diverse:

662 (100%) have at least one White
281 (66%) have at least one Asian (including South Asian)
105 (25%) have at least one African American
87 (20%) have at least one Latino
43 (10%) have at least one non-white/Other

LCDA has developed a list of the 233 California headquartered public companies identified as having corporate boards with no ethnic or racial diversity and dedicated a webpage to this research. This list is accurate as of July 1, 2020. LCDA recognizes that companies may add ethnically or racially diverse board members and we welcome updates to this database. Contact [email protected].

A pillar of good corporate governance has been the diversification of company boards. According to a recent McKinsey study, there is a strong business case for gender, ethnic and racial diversity in corporate leadership. "With a pandemic and the persistence of racial injustice requiring an immediate response from corporate America, diverse leaders will provide an advantage to companies navigating the rapidly changing business landscape. Diversity in the boardroom, that is inclusive of US Latinos, contributes to improved decision making, increases employee engagement and enhances the corporate bottom line," said Roel Campos, LCDA Chair and former SEC Commissioner.

ABOUT THE LATINO CORPORATE DIRECTOR'S ASSOCIATION
The Latino Corporate Directors Association (LCDA) is a national, membership organization promoting C-level and board diversity. Our organization champions diversity at the highest levels of corporate leadership behind a critical mission: increase the representation of US Latinos on corporate boards. LCDA serves as an advocate and resource to corporate boards, search firms, private equity, and institutional investors interested in gaining access to exceptional Latino board talent.

Below is a summary of LCDA research findings and methodology.