Changes to Board Room Requirements: More Female Inclusion

California legislators passed a new law which requires companies to hold a more even share of female directors on their board. The law was signed into effect with a contingency that the law could be repealed by a decision within the state judicial or legislative appeal because the signatory, ex-Gov. Jerry Brown feared that passing the law alone may trample company rights at the control structure level.

Requiring Women to Fill Board Seats

Women have been taking more board seats over the last few years, but they often receive lower pay for their duties and are less likely to be promoted to management, reaching up from lower management positions in company structure. Only 39% of low-level managers are female, and the number of women rising toward the C-level drop off substantially to only 23%.

Benefits of More Women in Board Seats

Companies are seeing increased productivity from building up teams and expressing more empathy for employees. Women tend to have a higher baseline capacity for empathy and, according to McKinsey’s 2018 study, more difficulty climbing the corporate ladder than the typical male executive. Employees are happier when they are listened to and understood. Among the chief benefits of onboarding female executives is a rise in employee satisfaction and retention. For restaurants, having more women in the upper ranks could help with the continued shift away from the “bro” culture of the kitchen that continues to plague the industry.

When Are the Changes Taking Effect?

The changes imposed by the new law take effect in 2020 and again in 2021. By 2020, every restaurant company headquartered in California will be required to have at least one woman on their board of directors. By 2021, all restaurant companies will be required to have a proportional level of females to the number of total board seats.

Women are continuing to fight for their right to climb the corporate ladder on fair terms with more even distribution of things like mentorship and social opportunities. One fear that some women have with the #MeToo movement is that they will be excluded from any social gatherings and mentorship opportunities with male leaders. A post on Forbes states that nearly half of male managers are uncomfortable engaging in one-on-one mentoring with a female subordinate.

Notable California Based Restaurant Groups: Chipotle, Jack in The Box, Taco Bell, Del Taco, The Habit Restaurants, Dine Brands and El Pollo Loco.


  • Subscribe to our latest insights


Are you capital raise ready?