Tag: boardroom

Conservative group sues to block California boardroom diversity law

LOS ANGELES (AP) — A conservative legal group announced Monday that it sued to block California’s first-in-the-nation law that requires hundreds of corporations based in the state to have directors from racial or sexual minorities on their boards.

Judicial Watch claimed in the suit filed Wednesday in Los Angeles Superior Court that the law is unconstitutional.

“The legislation’s requirement that certain corporations appoint a specific number of directors based upon race, ethnicity, sexual preference, and transgender status is immediately suspect and presumptively invalid and triggers strict scrutiny review by the court,” the group said.

Gov. Gavin Newsom signed the bill last week saying it was crucial to fighting racial injustice by giving minorities “seats at the table” of corporate power.

California already has a law requiring corporations to have at least one female director on their boards. Judicial Watch is also challenging that law in court and a trial is scheduled next summer.


The new measure cited statistics showing few of the 662 public corporations headquartered in California had Blacks or Latinos on their boards.

The measure requires at least two directors from different racial or sexual minority groups be appointed to boards with four to nine directors by the end of 2022. Three directors are required for boards with nine or more directors.

Firms that don’t comply would face fines of $100,00 for first violations and $300,000 for repeated violations.

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 lawsuit notes that a Senate analysis said the bill draws distinctions based on race and ethnicity, and therefore is “suspect.”

The group said the law is unconstitutional because the quotas don’t achieve a compelling governmental interest that is more narrowly defined than “the existence of general societal discrimination.”

Assemblyman Chris Holden, who coauthored AB 979, said research showed racial, ethnic and sexual minority groups were systematically excluded from corporate boards.

“No surprise!” Holden said in a statement about the lawsuit. “Some would rather maintain a status quo that doesn’t embrace diversity and inclusion.”

The lawsuit seeks to an order declaring it illegal to spend state funds to ensure companies comply with the law and to prevent the law from taking effect.

“California’s government has a penchant for quotas that are brazenly unconstitutional,” Judicial Watch President Tom Fitton said in a statement. “Gender quotas and now new quotas for numerous other groups for corporate boards are slaps in the face to the core American value of equal protection under the law.”

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Group sues to block California boardroom diversity law

LOS ANGELES (AP) — A conservative legal group announced Monday that it sued to block California’s first-in-the-nation law that requires hundreds of corporations based in the state to have directors from racial or sexual minorities on their boards.

Judicial Watch claimed in the suit filed Wednesday in Los Angeles Superior Court that the law is unconstitutional.

“The legislation’s requirement that certain corporations appoint a specific number of directors based upon race, ethnicity, sexual preference, and transgender status is immediately suspect and presumptively invalid and triggers strict scrutiny review by the court,” the group said.

Gov. Gavin Newsom signed the bill last week saying it was crucial to fighting racial injustice by giving minorities “seats at the table” of corporate power.

California already has a law requiring corporations to have at least one female director on their boards. Judicial Watch is also challenging that law in court and a trial is scheduled next summer.


The new measure cited statistics showing few of the 662 public corporations headquartered in California had Blacks or Latinos on their boards.

The measure requires at least two directors from different racial or sexual minority groups be appointed to boards with four to nine directors by the end of 2022. Three directors are required for boards with nine or more directors.

Firms that don’t comply would face fines of $100,00 for first violations and $300,000 for repeated violations.

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 lawsuit notes that a Senate analysis said the bill draws distinctions based on race and ethnicity, and therefore is “suspect.”

The group said the law is unconstitutional because the quotas don’t achieve a compelling governmental interest that is more narrowly defined than “the existence of general societal discrimination.”

Assemblyman Chris Holden, who coauthored AB 979, said research showed racial, ethnic and sexual minority groups were systematically excluded from corporate boards.

“No surprise!” Holden said in a statement about the lawsuit. “Some would rather maintain a status quo that doesn’t embrace diversity and inclusion.”

The lawsuit seeks to an order declaring it illegal to spend state funds to ensure companies comply with the law and to prevent the law from taking effect.

“California’s government has a penchant for quotas that are brazenly unconstitutional,” Judicial Watch President Tom Fitton said in a statement. “Gender quotas and now new quotas for numerous other groups for corporate boards are slaps in the face to the core American value of equal protection under the law.”

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California governor signs corporate boardroom diversity law

Gov. Gavin Newsom has signed a law requiring hundreds of California-based corporations to have directors from racial or sexual minorities on their boards

SACRAMENTO, Calif. — 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.

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 face fines of $100,00 for first violations and $300,000 for repeated violations.

At an online signing ceremony, Newsom said it was important for minorities to have a voice on the boards of powerful corporations.

“When we talk about racial justice, we talk about empowerment, we talk about power, and we need to talk about seats at the table,” Newsom said.

The legislation was part of a package of racial justice measures signed by Newsom before a midnight deadline. Others bar the use of peremptory challenges to remove potential jurors based on racial, religious or gender identity; allow judges to alter sentences that are believed to involve racial or ethnic discrimination; and set up a state task force to study the idea of reparations to African Americans for slavery.

The text of the corporate diversity bill cited the Latino Corporate Directors Association, which said 233 of 662 publicly traded companies headquartered in California had all-white boards as of this year. Nearly 90% didn’t have any Latino directors, although Latinos make up 39% of the state’s population. Only 16% had an African

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