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It’s a cartel controlled by middle-aged white men who are loathe to give up their privileges.

Stanford law professor, Joseph Grundfest, makes a different market-based argument that has more relevance.

Specifically, all companies in California will be required to have at least one woman on their board by 2019.

Boards with five or fewer directors will need two female directors by 2021 and larger boards will need three.

Oxford finance professor, Renée Adams, has also written, on this site and elsewhere, that in order to reach the boardroom, women need to stay in the workforce.

She is not a fan of quotas, in general, but would rather see regulators focus on other structural initiatives that encourage women to stay in the workforce.

Brian Bolton does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

Kudos to California, where the state governor, Jerry Brown, recently signed into law new requirements for companies headquartered in the state to include more women on their boards.

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But because it’s human behaviour that we’re trying to change in this case, treating the symptom can be a big first step towards treating the disease.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.Non-compliant firms would be subject to (relatively small) fines.To assess the scope of the change, let’s review the statistics on diversity in the upper ranks of corporations.

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