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The law will force heavyweights such as Apple, Facebook, Tesla, and Alphabet (Google) to revamp their boards to comply.Supporters believe increasing board diversity is important for both social and economic reasons; that a more diverse pool of directors creates a better board, with different and more innovative perspectives.In 2017, for the 1,500 largest US companies (all board statistics are my own, using data from advisory firm ISS): With such gender imbalances, most experts agree that board diversity needs to change. One concern comes from an efficient markets perspective.This argument suggests that if having more women on boards were best for business, greedy value-maximizing companies would already be doing it.Non-compliant firms would be subject to (relatively small) fines.

If wage discrimination is not the problem, then we need to stop focusing on the 78 cents ratio.Some of the difference is due to the jobs people choose; most of the difference is due to how jobs are compensated.She concludes that the income disparity is not due to wage discrimination but because the labour markets incentivize men and women differently.He suggests that the most effective way to bring change to the boardroom is for large, institutional investors—like the California Public Employees Retirement System (Cal PERS)—to exercise their capital markets influence and refuse to invest in companies that do not meet certain diversity, equity, or other standards.Non-compliant firms will see their stock prices fall and executives and directors will earn less money.

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