New law in California requires companies to put women on their boards
California has become the first state in the nation to require publicly traded companies to have at least one woman on their corporate boards.
Gov. Jerry Brown has signed a law that requires public companies whose “principal” executive offices are located in California to have at least one woman on their board of directors. Companies must comply by the end of 2019.
By the end of July 2021, a minimum of two women must sit on boards with five members, and there must be at least three women on boards with six or more members. Companies that fail to comply face fines of $100,000 for a first violation and $300,000 for a second or subsequent violation.
“Given all the special privileges that corporations have enjoyed for so long, it’s high time corporate boards include the people who constitute more than half the ‘persons’ in America,” Brown wrote in a signing message.
The California Chamber of Commerce was among the groups that opposed the bill. It said it agreed with the bill's intent, but not how it proposes to implement its goal.
"It also likely violates the United States Constitution, California Constitution and California's Civil Rights Act, which places California companies in a legal predicament," the group said in a letter. It also noted that current law says companies are governed by their state of incorporation, not where their offices are located (the two can be different).
Some experts believe the bill faces serious legal challenges.
Gov. Jerry Brown has signed a law that requires public companies whose “principal” executive offices are located in California to have at least one woman on their board of directors. Companies must comply by the end of 2019.
By the end of July 2021, a minimum of two women must sit on boards with five members, and there must be at least three women on boards with six or more members. Companies that fail to comply face fines of $100,000 for a first violation and $300,000 for a second or subsequent violation.
“Given all the special privileges that corporations have enjoyed for so long, it’s high time corporate boards include the people who constitute more than half the ‘persons’ in America,” Brown wrote in a signing message.
The California Chamber of Commerce was among the groups that opposed the bill. It said it agreed with the bill's intent, but not how it proposes to implement its goal.
"It also likely violates the United States Constitution, California Constitution and California's Civil Rights Act, which places California companies in a legal predicament," the group said in a letter. It also noted that current law says companies are governed by their state of incorporation, not where their offices are located (the two can be different).
Some experts believe the bill faces serious legal challenges.