California Bill to Mandate Women on Boards Faces Challenge From Businesses

California Bill to Mandate Women on Boards Faces Challenge From Businesses

The California legislature is considering a bill that would make it the first state in the US to require women’s representation on the boards of companies headquartered there, but the business community is pushing back, saying the proposed mandate is unconstitutional and counterproductive, Antoinette Siu reports at TechCrunch:

SB 826, which won Senate approval with only Democratic votes and has until the end of August to clear the Assembly, would require publicly held companies headquartered in California to have at least one woman on their boards of directors by end of next year. By 2021, companies with boards of five directors must have at least two women, and companies with six-member boards must have at least three women. Firms failing to comply would face a fine. …

Yet critics of the bill say it violates the federal and state constitutions. Business associations say the rule would require companies to discriminate against men wanting to serve on boards, as well as conflict with corporate law that says the internal affairs of a corporation should be governed by the state law in which it is incorporated. This bill would apply to companies headquartered in California. … Similarly, a legislative analysis of the bill cautioned that it could get challenged on equal protection grounds, and that it would be difficult to defend, requiring the state to prove a compelling government interest in such a quota system for a private corporation.

Legislative mandates or quotas for women on corporate boards are rare, with only a few European countries having adopted them. Norway was the first to do so, introducing a 40 percent quota in 2003, while France, Germany, Iceland, and Spain have since introduced their own mandates. Sweden had an opportunity to join this group but declined it early last year, when the parliament voted down a proposal to fine listed companies where women make up less than 40 percent of directors. In these countries, quotas have proven effective at driving gender equality on boards; critics acknowledge this, but argue that making women’s representation a matter of compliance isn’t changing corporate cultures to really value women in leadership.

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Massachusetts Enacts New Restrictions on Non-Compete Agreements

Massachusetts Enacts New Restrictions on Non-Compete Agreements

After several years of legislative wrangling, Massachusetts Governor Charlie Baker on Friday signed a bill into law that will limit the conditions under which employers in the state can enforce non-compete agreements on their employees. The law goes into effect on October 1 and will apply to all non-compete agreements signed after that date. Lisa Nagele-Piazza outlines the law’s provisions at SHRM:

The Massachusetts law aims to prevent overuse of such agreements by prohibiting noncompetes with employees who are:

  • Nonexempt under the Fair Labor Standards Act.
  • Under age 18.
  • Part-time college or graduate student workers.

For a noncompete to be valid, it must be:

  • Limited to 12 months in duration (with some exceptions).
  • Presented to new hires either with an offer letter or 10 days prior to an employee’s start date, whichever is earlier.
  • Signed by the employer and the worker.

The agreement must also inform employees of their right to consult legal counsel before signing it. If employers want existing staff to sign noncompetes, they will need to offer “fair and reasonable” consideration beyond continued employment for the agreements to be valid.

The new law is also the first in the U.S. to require that employers offer “garden leave” pay to former employees bound by non-competes. The law requires to pay these employees 50 percent of the highest base salary they earned in the prior two years for one year after their departure, or some other “mutually agreed upon consideration.”

That alternative represents a huge loophole in the law, Michael Elkon, an attorney with Fisher Phillips in Atlanta, tells Nagele-Piazza. What sort of “consideration” counts as valid for the purposes of this law will likely be hashed out in court in the coming years, but Elkon notes that employers will expose themselves to a risk of litigation (before an unsympathetic judge) if they attempt to get around this provision by offering an employee a “consideration” that undercuts the law’s guidelines.

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Should For-Profit Companies Hire Social Workers?

Should For-Profit Companies Hire Social Workers?

As digital technologies become more prominent in how organizations work, employers are balancing the need for employees with digital and other hard skills with the need for employees with “soft” social, interpersonal, and communication skills. In fact, employers are increasingly prioritizing social and emotional skills; McKinsey, for example, predicts that skills such as communication, pattern recognition, logical reasoning, and creativity will be in high demand in the coming decades.

With these soft skills in high demand, Jake Bullinger proposed in a recent article at Fast Company that for-profit organizations consider hiring trained social workers to fill that need. Bullinger talks to Michàlle Mor Barak, a University of Southern California social work professor, who notes that companies today require expertise in societal good as they are increasingly under pressure to prioritize things like corporate social responsibility, work-life balance, and diversity and inclusion which weren’t on their radar a few decades ago. Social workers and other experts in social and emotional issues could be particularly helpful in people management and community engagement, Bullinger writes:

A human resources department staffed with therapists could better handle harassment claims, and recruiters working with social scientists could better target minority candidates. Corporate philanthropy arms would benefit, one can surmise, from case workers who understand a community’s greatest needs. The people best suited to run diversity and inclusion efforts might be those who study diversity and inclusion for a living.

I graduated with a master’s degree in social work in 2005 and have spent most of my career working in for-profit organizations. From my vantage point, social workers can provide an array of benefits, but organizations need to be realistic about what they can and can’t do.

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Diversity in Big-Company Leadership Shrinks as PepsiCo’s Indra Nooyi Prepares to Step Down

Diversity in Big-Company Leadership Shrinks as PepsiCo’s Indra Nooyi Prepares to Step Down

After 12 years at the helm of the multinational food and beverage conglomerate, PepsiCo CEO Indra Nooyi announced on Monday that she would retire from her position in October. Nooyi will be succeeded by Ramon Laguarta, the head of PepsiCo’s Europe and sub-Saharan Africa business, who has been with the company for 22 years. In an interview with the New York Times, the 62-year-old departing CEO said she was stepping down now in part to spend more time with her 86-year-old mother:

“You reach a point where you get tired,” Ms. Nooyi said. “Physically tired. And your family starts to demand more time of you. I’ve reached that point.” Inside PepsiCo, Ms. Nooyi was known for working incredibly long hours — as many as 20 hours a day, often seven days a week. When asked Monday whether she felt that made her a good role model for other women, Ms. Nooyi said, “probably not.”

“But you have to remember when I started working in this corporate world, there were hardly any women in the jobs I was in. At that time, 30 or 40 years ago, expectations for women were unreasonable. We had to produce a better product and do everything much better than the men in order to move ahead,” Ms. Nooyi said.

Nooyi’s departure will leave just 24 women leading S&P 500 companies, according to the non-profit organization Catalyst, though that number will bounce back up to 25 again when Kathy Warden takes up her new post as CEO of Northrop Grumman next January. Other women have stepped down from CEO roles at big companies this year, however, including Denise Morrison of Campbell Soup and Irene Rosenfeld of the snack food maker Mondelez International, so the gender balance of this exclusive club is on a downward trend.

Nooyi has discussed her remarkable path to corporate leadership in a number of interviews, as well as why more women don’t make it to the top. In her view, the dearth of women in the C-suite has less to do with sexist conceptions of what leadership looks like and more to do with a pipeline problem, Vauhini Vara explains at the Atlantic, pointing to an interview she gave on the Freakonomics podcast earlier this year. That’s because the critical point in many professionals’ careers coincides with the time in their lives when they become parents and raise their children—a responsibility that still falls primarily on women:

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On Black Women’s Equal Pay Day, Corporate Activism Focuses on Raising Awareness

On Black Women’s Equal Pay Day, Corporate Activism Focuses on Raising Awareness

Today is Black Women’s Equal Pay day, a date marking the pay gap between black women and white men in the US by representing how far into the next year a typical black woman has to work to earn as much as a typical white man earned in one year. It comes considerably later in the calendar than Equal Pay Day, which is observed in early April and symbolizes the gender pay gap irrespective of race; this illustrates the greater degree to which black women are disadvantaged in the American workplace than their white peers. McKenna Moore at Fortune highlights the salient statistics:

Women earn 80 cents for every dollar that men make, but black women make 63 cents for every dollar white, non-Hispanic men make. This means that black women also make 38% less than white men and 21% less than white women, according to a study published by the Institute for Women’s Policy Research. And the gap is only widening for women, both black and white. Extended over a 40-year career, the wage gap has black women earning $850,000 less than men’s median annual earnings, according to the National Women’s Law Center.

Studies show that the pay gap starts early. An data analysis of BusyKid’s app’s 10,000 users shows that parents pay boys a weekly allowance twice the size that they pay girls. By 16, black women are earning less than white men and the gap only widens as they age. As black women have families of their own, the gap means less money for their families, which is particularly harmful because more than 80% of black mothers are the main breadwinners for their households, according to the National Partnership for Women & Families.

The disadvantage lying at the intersection of racial marginalization and gender inequality is not limited to black women, either: Native American women don’t get their Equal Pay Day until late September, earning only 57 cents for every dollar paid to white, non-Hispanic men. Latina women suffer the greatest pay disparity at 54 cents to the white, male dollar; their Equal Pay Day doesn’t arrive until November.

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UK MPs Press for More Gender Pay Gap Disclosures, Action Plans

UK MPs Press for More Gender Pay Gap Disclosures, Action Plans

In April 2017, new regulations came into effect in the UK requiring all organizations with 250 or more employees to publish their gender pay gaps. One year later, the first round of mandatory reports showed that the median pay gap among those reporting stood at 9.7 percent, with 78 percent of firms paying men more than women. On a more granular level, the reports illustrated the great degree to which women’s underrepresentation in senior roles, especially those with high bonus potential, contributes to the pay gap in professional fields.

Now, a committee of MPs is urging the government to expand the reporting mandate to smaller firms, as well as to require companies to publish their plans for closing these gaps, the Guardian reported last week:

All companies with more than 50 employees should have to report their gender pay gap from 2020, said the business, energy and industrial strategy committee (BEIS). Currently only firms with more than 250 employees have to report their gender pay gap, leaving half of the UK workforce without knowledge of their workplace’s gap. The committee said the government had to take fresh action to close the gap, and should force companies to publish action plans and narrative reports about what they were doing to narrow it.

It also criticised the government for “failing to clarify the legal sanctions available to the EHRC [Equalities and Human Rights Commission] to pursue those failing to comply and we recommend that the government rectifies this error at the next opportunity”.

The committee called out those companies that excluded partner pay from their pay gap reports, including many of London’s major law firms, which its chair Rachel Reeves said “made a mockery of the system.”

Laura Hinton, chief people officer at PwC, told the committee that it was time for British businesses to start thinking about gender pay equity as more than just a compliance concern and couple their pay gap reporting with concrete action plans and accountability. The committee is proposing that boards of directors introduce key performance indicators for reducing pay gaps and that remuneration committees be required to explain how their pay policy decisions reflect their commitment to pay equity, according to Personnel Today.

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Study: Working Women Underestimate the Hidden Costs of Having Children

Study: Working Women Underestimate the Hidden Costs of Having Children

The high monetary costs of having children are well known to working parents and the employers looking to support them. According to US Census data, child care costs skyrocketed by more than 50 percent in inflation-adjusted dollars between 1985 and 2011. These costs have been blamed for holding women back in the workforce by making it challenging for couples to start families without scaling back one of their careers: in the case of heterosexual couples, that usually means the woman’s, as she typically earns less money than her male partner.

Yet a study recently highlighted in the Wall Street Journal suggests that the total costs of motherhood are difficult for many working women to anticipate. “The Mommy Effect: Do Women Anticipate the Employment Effects of Motherhood?” by economists Jessica Pan, Ilyana Kuziemko, Jenny Shen, and Ebonya Washington finds that some women in their childbearing years have “misplaced optimism” about their employment prospects after becoming mothers due to other hard-to-quantify costs associated with having children. As the Journal noted, a recent US government survey found that 64 percent of women with bachelor’s degrees and children under the age of six agreed that “being a parent is harder than I thought it would be”; fewer than 40 percent of similarly situated men agreed.

Beyond the financial costs are the time and emotional “costs” associated with having children that are harder to plan for.

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