California Bill Requires All Corporate Boards to Have a Token Woman

California might become the first state in the nation to force publicly traded companies to put women on their boards of directors.

After passing in the Assembly on Wednesday, SB-826 breezed easily through the Senate yesterday. Now it heads to the governor’s desk, where Jerry Brown has until the end of September to sign it into law.

Here are the legislation’s specific requirements, according to the Los Angeles Times:

The bill would require that publicly held corporations headquartered in the state include at least one woman on boards of directors by the end of 2019, and at least two by July 2021. Corporate boards with six or more members would be required to have at least three women on the panels by the middle of 2021.

Companies found to be in violation of the law would face a fine.

State Sen. Hannah-Beth Jackson (D–Santa Barbara), who co-authored the bill, says it’s necessary because women are underrepresented on California’s corporate boards.

“One-fourth of California’s publicly traded companies still do not have a single woman on their board, despite numerous independent studies that show companies with women on their board are more profitable and productive,” she said in a statement. “With women comprising over half the population and making over 70 percent of purchasing decisions, their insight is critical to discussions and decisions that affect corporate culture, actions and profitability.”

A coalition of business groups, including the California Chamber of Commerce, say in a joint statement that they’re all for gender equality but this isn’t the way to go about it. The legislation “requires publicly traded corporations to satisfy quotas regarding the number of women on its board or face significant penalties, which is likely unconstitutional, a violation of California’s Civil Rights statute, and a violation of the internal affairs doctrine for publicly held corporations,” the statement says.

While California would be the first state in the nation to adopt such a measure, other countries, including Norway and Germany, have similar policies.

The measure would affect 377 of California’s largest publicly traded companies, plus many smaller businesses.

If the bill becomes law, some of Silicon Valley’s biggest corporations might have to make changes. Facebook, Apple, and Alphabet (Google’s parent company) each currently have two women apiece on their boards. Each company would likely have to appoint an additional woman by 2021 in order to meet the quota.