Senators Pass Gender Diversity Resolution – Have They Read Ecclesiazusae?

In late August, the California Senate approved SCR 62 which encourages “equitable and diverse gender representation on corporate boards”.  The resolution also urges:

Within a three-year period from January 2014 to December 2016, inclusive, every publicly held corporation in California with nine or more director seats have a minimum of three women on its board, every publicly held corporation in California with five to eight director seats have a minimum of two women on its board, and every publicly held corporation in California with fewer than five director seats have a minimum of one woman on its board . . . .

The Vagaries of Vagueness

It’s hard to know what exactly the Senate is talking about in this resolution.  For example, constitutes a “corporation in California”?  Does this refer only to corporations incorporated in California (See Corporations Code Section 162)?  Does it also refer to foreign corporations with their principal offices in California or to foreign corporations that are registered with the Secretary of State to transact intrastate business?   What is meant by “director seats”?  Does this refer to the authorized number of directors or the number of directors in office?  What constitutes a publicly held corporation?  Must a publicly held corporation be traded on an exchange?  Is an unlisted corporation subject to the SEC’s reporting requirements, a “publicly held” corporation?  It’s also entirely unclear what would constitute “equitable” gender representation.

Does Dextrality Cause Criminality?

Despite these technical difficulties, the resolution is already attracting some public attention.  The resolution includes several studies that reportedly associate gender diversity with improved performance.  This illustrates one of the most common of logical fallacies: correlation is not causation.  The fact that more criminals are right-handed does not mean that dextrality causes criminality.

The resolution is currently in the Assembly which adjourns at the end of this week.


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