State Enlisting Cal State Fullerton to Help Corporate Boards Diversify

The California secretary of state’s office, moving to encourage corporations to place more minorities and women on their boards of directors, has lined up Cal State Fullerton to establish a database of qualified applicants and corporations seeking their services.

A computer will match candidates with companies based on candidates’ qualifications, experience and education.

Only one other state, Wisconsin, is believed to have created a similar state-funded center, although it has run into financial problems, state officials said.

“Putting women and minorities on boards enhances the richness of an organization,” said S. Irene Matz, a faculty member at Fullerton’s School of Business Administration and Economics.

Women and minorities are nearly invisible in the boardroom, said Paul Lapides, director of the Kennesaw State University Corporate Governance Center in Atlanta. Of the 80,000 board members at U.S. public corporations, fewer than 5% are women and 3% are minorities, he said.

The statistics are hardly better at some of America’s biggest corporations. Women comprise only 11% of the directors at Fortune 500 companies, Lapides said, adding that the majority of American firms “have almost exclusively white males over 60 on their boards.”

Fullerton’s Matz hopes the new California Corporate Board Registry will have 2,500 individuals and 300 to 400 companies by year’s end. Individuals pay a $200 fee to be included for two years. Corporations would pay a one-time fee of $500.

The individual membership fee is designed, in part, to weed out unqualified candidates. “I think people who have the qualifications and experience to serve on a board will be able to afford it,” she said.

Lapides, the corporate board expert, said he expected Fullerton’s program to increase board participation by women and minorities by giving corporations a place to find talented candidates.

Fullerton has donated office space and earmarked $50,000 for the program, enough to keep it operating for 18 months. However, the program might run into financial difficulties if it fails to attract corporate or nonprofit sponsors, Matz said.

Wisconsin’s program has been suspended since mid-1998 because of money problems and lack of participation. It placed 10 minorities and women on corporate and nonprofit boards between 1995 and 1998, said Helen Capellaro of the University of Wisconsin-Madison School of Business, which administered the program. Individuals were charged $30 to be listed on the database for two years.

In late 1998, the state of California solicited proposals from UC and Cal State universities to oversee the registry. Fullerton, which had previously expressed interest, was the sole school to respond.

A state law establishing such a registry has been on the books since 1993, but it had received no funding.

Secretary of State Bill Jones said he believed Fullerton would do a better job running the registry. “With its outreach programs and connections to the business community, I think Fullerton will have a chance of being more successful than the secretary of state, which is just a filing agency,” he said.

The secretary of state’s office registers corporations, certifies elections and keeps records of campaign contributions, among other duties.