August 26, 2020

Diversity Legislation Sparking Conversation

HP’s CEO Stands for Change in California Public Companies

Diversity is a vital topic of conversation and change, especially for boards of directors. As a major facet of an organization’s social responsibility, diversity in the boardroom is being demanded across the business world. Some areas are circulating legislation that would push corporations in the direction of diversifying their board of directors. 

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Explanation of Bill in California State Senate

California’s proposed bill, AB 979 would prohibit all-white corporate boards. This bill follows in the footsteps of the law that mandated women in corporate boardrooms in 2018. California’s more than 600 public corporations would be required to have at least one person of color serving on their corporate boards by the end of 2021. This bill aims to improve the currently abysmal diversity statistics. Nationally, 19.5% of board members of Fortune 100 companies are people of color, according to a 2018 report  by the Alliance for Diversity. If enacted, the law would be the first in the nation to mandate the racial makeup of corporate boards. shared the following as an example of the corporations to be effected, “In California, many large corporations — including Disney, Apple, Intel, Tesla, Oracle, Chevron, Facebook, Wells Fargo, Cisco Systems and Alphabet Inc., the parent company of Google — already have at least one person of color on their boards. But some, like Monster Beverage Corporation and Chegg, Inc., have all-white board members.”

The Legislature has until Aug. 31 to pass bills unless Gov. Gavin Newsom calls lawmakers back for a special session. 

HP CEO rises in Support of New California Diversity Bill 

Enrique Lores, President, and CEO of the Hewlett-Packard Company (HP) recently took a stand in an article posted to his LinkedIn page. This followed HP’s strategy chief, Kim Rivera, expressing the company’s support for the bill in front of the California Senate. 

Here’s what Lores had to say on the matter:

“It’s an important piece of legislation. I urge the legislature to adopt it and Governor Newsom to sign it into law. But we shouldn’t have to rely on the Governor’s pen to make our boards more diverse. Business leaders should be doing that on our own.”

“This isn’t just the right thing to do. Study after study has shown how gender and ethnic diversity can help power innovation and strengthen a company’s performance. For example, McKinsey has found that companies with more women and more ethnic diversity at the executive level are more profitable, and they’ve also found that companies with more diverse boardrooms enjoy significantly higher earnings and returns on equity.”

As a company, HP backs up their CEO’s sentiments with its board of 58% minorities and 42% women as Lores noted in his post. 

Diversity as a Springboard for Connection

Whether legislation such as the bill proposed in California passes, or instigates bills with a similar purpose across America, the larger conversation surrounding diversity in the boardroom isn’t going away. Corporations can use this conversation and any disruptions it may cause as a launching pad for greater success and further connection with the community. 

Pro Tip: Check out our article on informed diversity discussions in the boardroom

Even organizations with existing diversity policies can use this example of legislation to shine a light on further improving their levels of diversity. Even organizations like HP, with a socially responsible focus, are striving to do better. “Yet, we also know we have a lot more work to do—as a company and industry—to finally shatter the barriers that have prevented true equality and fairness for far too long,” Lores wrote.

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