STEVE INSKEEP, HOST:
We follow up this morning on an attempt to legislate diversity. Last year, California required publicly traded companies to have at least one female board member or face a fine. Lily Jamali of KQED in San Francisco asked how that's working.
LILY JAMALI, BYLINE: When Silicon Valley-based Adesto Technologies invited Susan Uthayakumar to join its all-male board last year, she had no idea California had just passed a gender quota. She says she and Adesto were a perfect fit.
SUSAN UTHAYAKUMAR: The board itself is very welcoming, and they wanted a different perspective on the board.
JAMALI: She's a CEO in Canada with a background in the Internet of things, or IOT, which means things like your smart speaker or your Internet-connected doorbell.
UTHAYAKUMAR: I had the IOT experience. The background is there for me. So I'm actually being asked to give my voice quite a bit.
JAMALI: Lately, a lot of accomplished female executives have gotten similar calls. Out of 75 major California companies that had no female board members, two-thirds of them now have at least one. And now other states - Massachusetts, Washington and New Jersey - are introducing similar legislation. Shannon Gordon is the CEO of The Boardlist, a database that companies can search to find female candidates.
SHANNON GORDON: We saw an increase in the number of searches overall. And so I think there was kind of this halo effect simply because the topic has been discussed so much more in the last year or two. Companies are kind of coming around to the value of diversity on boards.
JAMALI: Multiple studies have shown companies with female directors are more profitable. In January, Goldman Sachs CEO David Solomon turned heads when he told CNBC that the bank would stop taking companies public unless they have at least one diverse board member.
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DAVID SOLOMON: I look back at IPOs over the last four years, and the performance of IPOs where there's been a woman on the board in the U.S. is significantly better than the performance of IPOs where there hasn't been a woman on the board.
JAMALI: In his announcement, Solomon cited his experience with his own board at Goldman Sachs.
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SOLOMON: We have 4 women out of 11. We have a black lead director. And I really value the diverse perspectives, you know, I'm getting, which are helping me run the company.
JAMALI: The California law hits companies that don't have a female board member with a $100,000 fine. Critics have lodged a handful of lawsuits claiming that's discriminatory and unconstitutional. Anastasia Boden is senior counsel at the Pacific Legal Foundation, which is suing on behalf of a male shareholder in California.
ANASTASIA BODEN: The law violates the 14th Amendment's promise of equal treatment before the law, and it actually forces people to make decisions on the basis of sex.
JAMALI: But some female board members say companies need a strong nudge like California's law to change business as usual. Former DuPont CEO Ellen Kullman is one of the four women on the Goldman Sachs board. She says companies have long chosen board members based on their network of friends and acquaintances.
ELLEN KULLMAN: And that's where I think the history has led to mostly male boards 'cause if it's word of mouth and you ask the men, historically, have given a lot of names of other men.
JAMALI: Kullman, who now serves on four boards, is doing something to crack the old boys club.
KULLMAN: I'm not taking on any more boards. I've got plenty. But if people come to me with opportunities, I want to be able to point to four or five or six different women that would be phenomenal for their board, depending on what they're looking for.
JAMALI: And many California companies could probably use the help. The state law is now pushing companies to go beyond having just one woman on a board. By the end of next year, the quota increases, and so will the fine. For NPR News, I'm Lily Jamali in Silicon Valley.
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