Corporations Without Representation: The Constitutionality of Gender Diversity Mandates

Abstract

Biases and structural barriers contribute to the glacial pace at which women are represented on corporate boards. Even though companies with at least one female board of director outperform companies with no female directors, women only held 20% of board of director positions in 2019. Companies nationwide would not reach gender equality in the boardroom for decades without legally enforceable gender diversity requirements. In response, California Senator Jackson proposed SB 826—requiring California-based publicly held corporations to include at least one woman on their board of directors. However, conservative legal organizations filed lawsuits claiming California’s gender diversity mandate violates the California Constitution because the mandate perpetuates sex-based discrimination and is subject to strict scrutiny review. This Note proceeds by examining California’s gender diversity mandate and discussing the constitutionality of SB 826. This Note finds that SB 826 is constitutional under the Equal Protection Clause and beneficial to qualified female board candidates and the United States economy. SB 826 meets the intermediate scrutiny requirements because the gender diversity mandate is substantially related to a sufficiently important government interest and is narrowly tailored. However, this Note also argues that, paradoxically, if states ratify the Equal Rights Amendment (“ERA”), SB 826 would likely be unconstitutional because the ERA’s ratification will presumably change the standard of review for gender classifications from intermediate scrutiny to strict scrutiny. Under strict scrutiny, the Supreme Court would likely prohibit sex-conscious legislation designed to advance women’s equality. This Note ultimately urges courts to uphold California’s gender diversity mandate as a matter of public policy and law under the current intermediate standard. SB 826 does not question whether women are capable of getting into the boardroom; rather, it ensures that women have an opportunity to earn a spot at the table