California governor signs corporate boardroom diversity law

California governor signs corporate boardroom diversity law

SeattlePI.com

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SACRAMENTO, Calif. (AP) — Hundreds of California-based corporations must have directors from racial or sexual minorities on their boards under a first-in-the-nation bill signed Wednesday by Gov. Gavin Newsom.

The diversity legislation is similar to a 2018 measure that required boardrooms to have at least one female director by 2019. Like that measure, it could face court challenges from conservative groups who view it as a discriminatory quota.

Supporters evoked both the coronavirus pandemic that is disproportionately affecting minorities and weeks of unrest and calls for inclusion that followed the slaying of George Floyd in May in the custody of Minneapolis police.

After Floyd's death, many corporations issued statements of support for diversity, but many haven't followed through, said Assemblyman Chris Holden (D-Pasadena), who co-authored the bill.

“The new law represents a big step forward for racial equity,” Holden said. “While some corporations were already leading the way to combat implicit bias, now, all of California’s corporate boards will better reflect the diversity of our state. This is a win-win as ethnically diverse boards have shown to outperform those that lack diversity.”

By the end of 2021, the more than 660 public corporations with California headquarters must have at least one board director from an “underrepresented community," according to the measure.

Those who qualify would self-identify as Black, Latino, Asian, Pacific Islander, Native American, Native Hawaiian or Alaska Native, or as gay, lesbian, bisexual or transgender.

The measure requires at least two such directors by the end of 2022 on boards with four to nine directors. Three directors are required for boards with nine or more directors. Firms that don’t comply would...

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