California Governor OKs Bill Mandating Corporate Board Diversity

Sept. 30, 2020, 9:59 PM

California Gov. Gavin Newsom (D) signed a bill Wednesday requiring public companies to include a minimum number of women and people of color on their boards of directors.

“This is an opportunity, really, to get people of color at the table where the decisions are made, where the culture is set,” Assemblymember Chris Holden (D), the bill’s author, said at the bill signing ceremony.

Under the measure (AB 979):

  • Holden said that two California companies, the Hewlett-Packard Co. and Bloom Energy, are already on track to meet the bill’s objectives.
  • At least three members of boards with at least six members would have to be women by the end of 2021, and at least one member would have to be from an underrepresented community by the end of 2021. By 2022, boards with at least nine members would have to include three minority members.
  • More than a dozen companies, including Zillow Group Inc. and Nextdoor, have pledged to add at least one Black director to their boards in the next 12 months, according to The Board Challenge, an effort to promote diversity on company boards.

  • A 2018 law mandates at least one woman director on California corporate boards.

  • The California Secretary of State would be required to publish an annual report on board diversity starting March 1, 2022.

Earlier: California Lawmakers Approve Racial Quotas for Corporate Boards

To contact the reporter on this story: Tiffany Stecker in Sacramento, Calif. at tstecker@bgov.com

To contact the editors responsible for this story: Tina May at tmay@bloomberglaw.com; Heather Rothman at hrothman@bgov.com

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