A study by an international team of scholars has concluded that California's imposition of a gender quota on publicly held corporations with their principal executive offices in the state resulted in a "robust and significantly negative stock market reaction".  von Meyerinck, Felix and Niessen-Ruenzi, Alexandra and Niessen-Ruenzi, Alexandra and Schmid, Markus and Davidoff Solomon, Steven, As California Goes, So Goes the Nation? Board Gender Quotas and Shareholders' Distaste of Government Interventions (August 31, 2021).   Specifically, these researchers found that the mean reduction in shareholder value amounts to $104.51 million and $328.31 million for non-California for California firms, respectively (based on the mean market capitalization in the two groups).

What I found most interesting was the authors' theory that "independent of the nature the quota, shareholders may have a general distaste of governmental interference with company affairs and do not appreciate legislation that forces companies to change their organizational structure to achieve non-monetary goals."   This should be something for the Securities and Exchange Commission to take into account when it considers mandating ESG disclosures.

California's gender quota mandate is codified at Sections 301.3 and 2115.5 of the California Corporations Code.   A constitutional challenge to the law is scheduled to go to trial on December 1.  Crest v. Padilla (Cal. Super. Ct. Case No. 19STCV27561.

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