For more information please call  800.727.2766


California To Require More Diversity on Corporate Boards

In 2018, prompted by the #MeToo movement, California passed a law requiring that corporate boards include at least one female director. As that requirement has settled in, California has taken another step toward requiring equality. Following discussions across the country about race and social justice, California has passed a new law requiring that California corporations include a minimum of one director from an underrepresented community beginning in 2021.

To qualify as an underrepresented community member under the new law, the board director must be “an individual who self-identifies as Black, African-American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian, or Alaska Native, or who self identifies as gay, lesbian, bisexual, or transgender.”

By 2022, corporations with a principal executive office in the state and a board of five to eight directors must have at least two directors from underrepresented communities. Companies with nine or more directors must have at least three members from underrepresented communities. California’s Secretary of State will track compliance with the law and may levy fines for non-compliance. The Wall Street Journal has reported that after California’s law regarding female diversity went into effect, the presence of female board members increased across the country. Thus, California’s newest push for diversity could impact corporations across the country.