Bar Exams in the Pandemic JURIST Digital Scholars
California governor signs bill requiring companies to include women on boards

California Governor Jerry Brown [official website] signed a bill [text] into law on Sunday that will require public corporations to include more women on their boards of directors.

State Senators Toni Atkins and Hannah-Beth Jackson [official websites] introduced [ABC News report] Senate Bill 826, citing a report that one-fourth of California’s companies have no women sitting on their boards. According to their research, achieving gender parity would be impossible without government intervention.

The California Chamber of Commerce [official website] and several other business groups argued [NPR report] that the bill was unconstitutional because it does not consider other forms of diversity and attempts to manage the corporate boards of companies incorporated in a different state.

The bill states:

(a) No later than the close of the 2019 calendar year, a publicly held domestic or foreign corporation whose principal executive offices, according to the corporation’s SEC 10-K form, are located in California shall have a minimum of one female director on its board. A corporation may increase the number of directors on its board to comply with this section.
(b) No later than the close of the 2021 calendar year, a publicly held domestic or foreign corporation whose principal executive offices, according to the corporation’s SEC 10-K form, are located in California shall comply with the following:
(1) If its number of directors is six or more, the corporation shall have a minimum of three female directors.
(2) If its number of directors is five, the corporation shall have a minimum of two female directors.
(3) If its number of directors is four or fewer, the corporation shall have a minimum of one female director.

Any company that fails to meet these requirements will be fined [NYT report] $100,000 for their first violation of the law.

California is the first state to make gender inclusivity a requirement of corporate boards.