Hawaiian lawmakers are contemplating introducing gender variations on company boards
Hawaiian Holdings has 12 members on its board of directors who oversee Hawaiian Airlines. All but two – more than 83% – are men.
That would have to change under a new law proposed by Sens. Karl Rhoads and Rosalyn Baker that would require more gender diversity on boards of public corporations based in Hawaii. Hawaiian Holdings would need at least three women on its board of directors by 2024 to comply with the bill if it is passed.
The proposal, Senate Law 193, has passed two Senate committees and is on its way to the entire Senate. But the house has yet to pass before it can become law.
Majority Leader Della Au Belatti introduced an accompanying measure in the House of Representatives, House Bill 1077, but it went no further after being referred to the Economic Development Committee, headed by Rep. Sean Quinlan, and two other committees.
Quinlan did not call a hearing for the bill or respond to a message asking for a comment on the story.
Belatti told Civil Beat in a phone interview that she believes promoting more inclusive corporate boards is important, but admitted that SB 193 is unlikely to be successful this year as well.
“It’s a big step forward when it happens, but I’ll also say it’s a challenge – during a pandemic, that might not be the bill that rises to the top of it all,” she said. “Still, I think that’s important, which is why I introduced it.”
Rhoads noted that the Senate version cites several studies stating that gender diversity on boards correlates with higher or equal profits compared to all-male boards.
“The private sector had a thousand years to address this problem and they did nothing,” he said in a telephone interview. “I think it’s just time and in the worst case scenario it doesn’t hurt. Why not give everyone the experience you get by serving on a company’s board of directors? “
Some Hawaiian companies already meet the bill’s requirements. According to their website, the Bank of Hawaii board of directors has 13 members, including five women. First Hawaiian Bank’s board of directors consists of eight members, including three women. The Central Pacific Bank has 11 directors and already meets the requirements of the bill for at least three women.
Other companies that would be affected are Alexander and Baldwin, where the board currently has seven members, including five men and two women.
A & B spokeswoman declined to comment, but noted that the company recently won a national award for diversity and inclusion. A Hawaiian Airlines spokesman said the company is committed to attracting a diverse workforce and has the highest percentage of female US airline pilots.
“We value and encourage diversity on our board of directors and in our company – from our flight crew to our airport and maintenance teams to our corporate offices,” said spokesman Alex Da Silva.
SB 193 would require public corporations headquartered in Hawaii that at least six directors include at least three women or non-binary members and at least three men or non-binary members. Non-binary is defined as gender identity that is not exclusively male or female.
Companies with at least five board members would be forced to include at least two women or non-binary individuals on their board of directors. Companies with fewer than five board members require at least one female or non-binary member.
The bill stipulates that companies must make these changes by December 31, 2023. Penalties include a $ 1,000 fine for an initial violation and a $ 5,000 fine for all subsequent violations within 10 years of the first violation.
These penalties are minimal compared to a similar law on the books in California. Governor Jerry Brown signed the bill in 2018 and it went into effect last year. Companies that failed to comply could face a $ 100,000 fine, nonprofit news site CalMatters reported.
California law sparked lawsuits against the state, but it also forced dozens of California companies to add more women to their boards of directors.
Advantages and disadvantages
SB 193 has received many positive statements from women and groups representing women, such as the Domestic Violence Action Center, Planned Parenthood Votes Northwest and Hawaii, the Hawaii Women’s Coalition, and the American Association of University Women of Hawaii.
“Equal and fair representation creates strength and creativity,” wrote Katherine Buckovetz, who lives in Kailua-Kona, in her testimony. “Over 50% of the workforce are Wahine, but severely underrepresented on company boards.”
The Hawaii Civil Rights Commission testified in favor of Rhoads’ proposal, but said the measure should include racial and ancestral diversity as well.
Michael Golojuch Jr., who heads the LGBT caucus for the Democratic Party of Hawaii, wrote, “The state should advocate gender diversity on corporate boards, indeed all boards in the state of Hawaii.”
But not all of the feedback has been supportive. Ty Nohara, securities officer in the corporate registration division of the Hawaii Department of Commerce and Consumer Protection, expressed concerns about the costs and resources required to collect information from Hawaiian public companies to ensure compliance.
“This bill empowers BREG to impose fines on companies that fail to comply with this bill,” he said. “However, without standards for checking the conformity of a company, BREG cannot enforce this bill.”
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