Two Steps Forward, One Step Back

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Opponents of legislated gender and diversity targets score a hollow victory.

When it comes to gender and other diversity, the month of April had its ups and downs.

No, it wasn’t a prank: On April 1, the Los Angeles County Superior Court ruled that the state’s landmark legislation, which mandated the inclusion of underrepresented communities on boards, was unconstitutional. That legislation had created a timeline to establish thresholds and enforce compliance. Without citing all the legalese, California’s board diversity statutes, State Bill 826 and Assembly Bill 979, which had been enacted or signed into law over the past two years, were struck down by L.A. Superior Court Judge Terry Green as violating “the equal protection clause of the California constitution on its face.”

Well, if there’s egg on anyone’s face, it’s on the faces of those who think this latest judicial action will stem the inexorable march of activism driving gender, ethnic/racial, age and sexual orientation diversity on corporate boards and across the enterprise. Nonetheless, legal battlers on both sides of the equation swing back and forth with arguments and counterarguments that — depending on your point of view — suggest that diversity is a good and enforceable thing while deconstructing as unconstitutional interference any legislative effort to force behaviors by corporations and boards.

Judge Green, seizing on the irony, noted that a “member of the public might wonder” why the court would find against what advocates and many detractors had termed a thoughtful, well-crafted and achievable approach to mandating diversity on boards. “If the legislature has identified a social problem,” Green opined, “how can the court stand in the way of the obvious and direct approach to solving it?”
Green offered this as the compelling argument: “Fundamental values, whether personal or social, must be guarded. [But] only in very particular cases should discrimination be remedied by more discrimination. And that should happen only after obvious alternative measures have been tried. Sometimes, the direct approach should be the last resort, not the first.”

Stay tuned as this battle moves without delay into the appeals process.

Meanwhile, the storied Pine Valley Golf Club in Pine Valley, N.J., was sued by the State of New Jersey in late April for gender discrimination and property ownership rules that deny women the opportunity to join the club, where last July there were three women members out of a roster of 700 well-heeled golfers. Only after New Jersey launched its investigation a year ago did the 108-year-old club permit its first women members.

Speaking of launches, NASA passed a milestone in April and could not help crowing about one aspect of its Crew-4 launch to the International Space Station. In the four seats of the SpaceX Falcon 9 launch vehicle was the space agency’s first gender parity crew, with astronauts Jessica Watkins and Samantha Cristoforetti joining Robert Hines and Kjell Lindgren.
“This is one of the most diverse crews that we’ve had in a really, really long time,” said NASA space operations mission chief Kathy Lueders. Watkins is the first Black American woman scheduled for a long-duration spacewalk later in the crew’s half-year visit to the ISS. Cristoforetti is an Italian astronaut with the European Space Agency.

Diversity — on the links, in orbit or around the boardroom table — is an unstoppable tidal wave. Activists and watchdogs do not need laws to insist that representation in business should mirror real life. Old-school types should not expect any reduction in the effort to build more diverse, inclusive and effective boards.

Scott Chase manages the Directors to Watch annual series in Directors & Boards and Private Company Director magazines and has been on staff for 18 years.

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