Hawaii Lawmakers Consider Requiring Gender Diversity On Corporate Boards
The Senate bill cites several studies that say gender diversity on boards is correlated with higher or equal profits compared with all-male boards.
Hawaiian Holdings has 12 members on its board of directors that oversee Hawaiian Airlines. All but two 鈥 鈥 are men.
That would have to change under a new law proposed by Sens. Karl Rhoads and Rosalyn Baker, which would require more gender diversity on boards of public corporations headquartered in Hawaii. Hawaiian Holdings would need at least three women on its board by 2024 to comply with the bill, if it passes.
The proposal, , has passed two Senate committees and is on its way to the full Senate. But it still has to pass the House before it can become law.
Majority Leader Della Au Belatti introduced a companion measure, in the House, but it failed to advance after being referred to the economic development committee, led by Rep. Sean Quinlan, and two other committees.
Quinlan didn’t call a hearing for the bill and didn’t respond to a message seeking comment for this story.
Belatti told Civil Beat in a phone interview that she thinks promoting more inclusive corporate boards is important, but she acknowledged it’s unlikely that SB 193 will pass this year either.
“It’s a big step forward if it happens, but I will also say it’s challenging 鈥 during a pandemic this might not be the bill that rises to the top of everything,” she said. “Yet I think this is important, which is why I introduced it.”
Rhoads noted the Senate version cites several studies that say gender diversity on boards is correlated with higher or equal profits compared with all-male boards.
“The private sector has had a thousand years to address this problem and they haven’t done anything,” he said in a phone interview. “I think it’s just time and at the very worst, it does no harm. Why not give everybody the experience that you gain by being on a corporate board?”
Bill Requirements
Some Hawaii companies already comply with the bill’s requirements. According to its website, including five women. First Hawaiian Bank’s board Central Pacific Bank has 11 board members and already meets the
But other companies that would be affected include Alexander and Baldwin, where the board , including five men and two women.
A spokeswoman for A&B declined to comment but noted that the company . A spokesperson for Hawaiian Airlines said the company is committed to recruiting a diverse workforce聽and has the highest percentage of women pilots out of U.S airlines.
鈥淲e value and foster diversity within our board of directors and across our company 鈥 from our flight crew to our airport and maintenance teams and in our corporate offices,鈥 spokesperson Alex Da Silva said.
SB 193 would require public companies headquartered in Hawaii that have at least six board members to include at least three women or nonbinary members and at least three men or nonbinary members. Nonbinary is defined as gender identity that is not strictly male or female.
Companies with at least five board members would be compelled to include at least two women or nonbinary people on their board. Companies with fewer than five board members would need at least one female or nonbinary member.
The bill would require companies to make those changes by Dec. 31, 2023. Penalties include a $1,000 fine for an initial violation and $5,000 fine for any subsequent violations within 10 years of the first.
Those penalties are minimal compared to a similar law that’s on the books in California. Gov. Jerry Brown signed the bill into law in 2018 and it went into effect last year. Companies that failed to comply faced a $100,000 fine, the nonprofit news site reported.
The California law sparked lawsuits against the state but also effectively forced dozens of California-based corporations to add more women to their boards.
Pros And Cons
SB 193 has received lots of positive testimony from women and groups representing women such as the Domestic Violence Action Center, Planned Parenthood Votes Northwest and Hawaii, Hawaii Women鈥檚 Coalition and American Association of University Women of Hawaii.
“Equal and fair representation builds strength and creativity,” Kailua-Kona resident Katherine Buckovetz wrote in her testimony.聽“Over 50% of the workforce are wahine, but they are severely underrepresented on corporate boards.”
The Hawaii Civil Rights Commission testified in favor of Rhoads’ proposal but said that the measure should also include race and ancestry diversity.
Michael Golojuch Jr., who leads the LGBT Caucus of the Democratic Party of Hawaii, wrote “the state should be advocating for gender diversity on corporate boards, in fact all boards in the state of Hawaii.”
But not all the feedback was supportive. Ty Nohara, commissioner of securities at the Hawaii Department of Commerce and Consumer Affairs’ Business Registration Division, raised concerns in testimony about the costs and resources needed to collect information from public companies in Hawaii to ensure that they are in compliance.
“This bill authorizes BREG to impose monetary fines on corporations that do not comply with this bill,” he said. “However, absent any standards to verify whether a corporation is compliant, BREG will not be able to enforce this bill.”
