New California Legislation(Bill) mandating presence of women on board of publicly traded companies.
- Sponsored by State Senator Hannah-Beth Jackson
- Legislation signed by Governor Jerry Brown on September 30th
- Initial Deadline: December 31, 2019
- 3 Female Directors on Boards of 6 or More
- 2 Female Directors on Boards of 5
- 1 Female Director on Smaller Boards
- Final Deadline: 2022
Violations result in as much as $300,000 fines per year.
Legal Notes(according to THR report by Jonathan Handel)
- Public Companies Incorporated in Delaware
- State guards corporate law prerogative
- Incorporation vs. HQ Location
- Impairs Shareholder Rights
- Quotas may equal Reverse-Discrimination(UCLA Law Professor Neil Wertlieb)
Compliant Companies:
- Disney
- Netflix
Non-Compliant Companies:
- Apple
- Alphabet(Google)
- Live Nation
- Lionsgate
Out-of-State Companies
- CBS
- AT&T
- Comcast
- Sony
Analysis/Advice
- Precedence for Controlling Private Entities
- Return to Privately-Held Company
- Move State Incorporation
- Private Business Freedoms
- Legal Fight
- All-Female Companies with All-Female Boards
- Race, Sexuality, Religion
Quotes:
“With numerous independent studies showing that corporations with women on their boards are more profitable, SB 826 is a giant step forward for women, our businesses and our economy,” said Sen. Jackson in a release issued after Gov. Jerry Brown signed the legislation Sept. 30. That economic justification raises some eyebrows. “This bill is about the use of government power to obtain social change,” said Akerman law’s Jeffrey S. Horton Thomas.
“The bill has already had positive impact on companies across the country by elevating the discussion regarding the importance and benefits of diversity in the boardroom,” said Annalisa Barrett, corporate governance professor at the University of San Diego School of Business.
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