Washington has followed California in mandating gender diversity on the boards of public companies. The amended Washington Business Corporation Act (WBCA) requires public companies subject to the WBCA to have a gender-diverse board of directors by January 2022 or comply with board diversity disclosure requirements.
A board will be considered diverse if it is comprised of at least 25% of women for at least 270 days of the fiscal year preceding the annual shareholders’ meeting. A company not sufficiently diverse by January 2022 will have to issue a statement or post on its website a board diversity discussion and analysis. If a company fails to provide a diversity discussion and analysis, a shareholder may seek a court order to require the company to provide shareholders with this information.
Similar legislation passed in California in 2018 was successful in significantly improving the board diversity of publicly traded corporations in the states. Other states have enacted board diversity reporting requirements like Maryland and Illinois, while others have mandated board diversity studies like New York. Several other states are considering similar legislation similar to California’s including New Jersey, Michigan, Massachusetts and Hawaii.