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Gender Equality Increases by 1 Percent in California

Despite some recent high-profile hirings, the gender balance in high-level business positions hasn't changed much.
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Marjorie Scardino made headlines in early December when she became Twitter’s first female board member. The move was seen as the company’s response to recent criticism over the lack of diversity at the $24.9 billion giant. But as Wired’s Ryan Tate comments, “Her hiring doesn’t change the fact that the company spent the last year making a mockery of calls to diversify its board.” Adding one, albeit one very qualified, woman to a board does not make it gender-balanced. Scardino and other much-discussed women like Marissa Mayer and Sheryl Sandberg are outliers of female achievement in Silicon Valley. While their success puts a Band-Aid on their company’s image, these California-based tech giants are still far from being diverse.

As the recently released 2013-2014 “UC Davis Study of California Women Business Leaders” shows, gender equality at the highest levels of business is changing at a snail-crawl pace. Analyzing the largest 400 companies in California, it’s the most extensive survey of its kind in the U.S. and the only one to evaluate businesses for gender diversity in the state. Each company is ranked by the number of women on the board of directors and in the five highest-paid positions. While there is an increase of women in these positions, it’s hard to call the one-percent gain on last year’s results a victory.

"I had been lulled into a sense of feeling completely equal."

“We’re clearly not there,” says research specialist and study author Amanda Kimball. “When we look at the leadership in business as a whole, it is surprisingly homogenous. I mean, there’s a complete lack of gender diversity in corporate leadership teams, and these teams are making very important decisions that are impacting what products are out there in the world for us.”

Of the 400 companies, 107 have no women among their directors and highest-paid executives. While this is an improvement from the 127 companies from last year, only 23 of those businesses have three or more female directors. Overall, women make up just 10.9 percent of the board seats and highest-paid executive positions. Companies like Wells Fargo, which ranks in the top 10 most gender-balanced, aren’t actually all that diverse. Wells Fargo ranks eighth on the list, but only five of their 14 directors are women.

The most worrying trend is the rule of one—that just one woman placed on a board clears any mention of a company’s sexism. “It’s very popular to have just one woman,” Kimball says. “That disturbs me because if you are one person in a room of 10 people, you are clearly a minority voice and more importantly, you are viewed as a representative of an entire group instead of an individual with a complex perspective. I want to applaud companies that have one woman on their board, but what I really want to see is more diversity in general because the more mixed opinions you get, the better the decisions and the better the innovation.”

The numbers, though, have improved—if only slightly. For the first time in the study’s nine-year history, two companies have a female majority among their directors and highest-paid executives, Wet Seal Inc. and Annie’s Inc.—although the CEOs of both companies are male. Also, for the first time, are there more companies with at least one woman in these top positions than companies with no women.

Despite the small numbers, Kimball sees them as a growing cultural shift that’s hopefully aided by the California state legislature’s issuing of SCR-62 this past September (a resolution influenced by the 2012 University of California-Davis survey), which urges California businesses to up the number of women on the boards of publicly held corporations. “The Legislature acknowledges that the body of evidence to date concludes that companies perform better when their boards and executive leadership included women,” the resolution reads. “The State of California has a significant stake in both protecting the shareholders of publicly traded companies, as well as setting policies that enable them to perform better.”

UC Davis plans to continue their surveys in future years in order to establish a baseline of gender equality across these businesses.

“I had been lulled into a sense of feeling completely equal,” Kimball says. “Then all of the sudden I see the data and it just makes me really curious, you know, what’s going on here?”