More data is needed to determine if a California bill mandating gender equity on corporate boards is the right way to create meaningful results, said Melinda Gates, co-chair of the Bill and Melinda Gates Foundation, in an interview earlier this week with Squawk Box Anchor Becky Quick.
The California law — which would apply to publicly-traded companies with principal executive offices in the state — would require a company to appoint at least one woman to its board of directors by 2019 and for boards of more than five to include at least two women by 2021. It was passed by the state Senate 23-9 and the Assembly 41-26 last month. Now it just needs Governor Jerry Brown's signature, which could happen as soon as Sunday night.
Gates established Pivotal Ventures in 2015 to gather and analyze data related to improving gender and ethnic diversity and in key sectors such as technology, media and venture capital. Pivotal Ventures also acts as a Limited Partner, investing in venture capital firms that prioritize backing diverse founders.
"I put my money where my mouth is," says Gates, who added that she's watching the debate around the law and collecting relevant data.
At the 3,000 largest publicly traded companies in the U.S., 84 percent of corporate board members are male, according to data collected by 2020 Women on Boards, which advocates for increasing the percentage of women on U.S. company boards to at least 20 percent by 2020. In that same group, 17 percent did not have one female director, according to research firm Equilar.
That includes 86 companies in California.
"Sometimes quotas make sense for a time, to get things going," said Gates. "One of the countries that has the most number of women parliamentarians is Rwanda. It's because President Kagame came in and said, 'We will have at least 40 percent of women parliamentarians.' They are way over that now."
Advocacy groups behind the bill believe government-mandated quotes are the only way to go because change thusfar without them has been painfully slow.
"Women have been knocking on the doors of corporate board rooms for years — here in California, we had a resolution five years ago to urge corporations to listen to the drumbeat of the issue, but that doesn't work," said Betsy Berkhemer-Credaire, a corporate partner of the National Association of Women Business Owners owners, California, which co-sponsored the bill. Berkhemer-Credaire is also the chief executive officer at 2020 Women On Boards.
"Nothing works because the system is so entrenched," she said. "It is a historic decision — not just in the state but in the influence it would have in the country."
Gates said that while she remains unsure of whether quotas are the way to create real progress in the U.S., "I know we need to do something to accelerate women in business."