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"New California law, the first of its kind, requires racial diversity on corporate boards of directors"
"California Gov. Gavin Newsom signed a law requiring publicly traded corporations headquartered in California to appoint directors from underrepresented communities to their boards, the first law in the country to dictate the racial make-up of corporate boards.
It was inspired by first-of-its-kind legislation in 2018 that requires publicly held corporations headquartered in the state to diversify their all-male boards. It has faced legal challenges from conservative groups.
The legislation he co-authored would require people from 'underrepresented communities' to have at least one seat on corporate boards in California by the end of 2021.
In 2022, boards with four to nine people must have at least two members from an underrepresented community and boards with nine or more people must have at least three. Companies that don’t comply could face stiff fines.
Underrepresented communities are defined as people who identify as Black, Latino, Native American, Asian American, Pacific Islander, native Hawaiian or native Alaskan. Companies can also appoint directors who identify as gay, lesbian, bisexual or transgender.
The legislation did not draw significant opposition. No major groups were listed as opponents. Corporate attorney Keith Bishop testified against the bill, saying "it violates the Equal Protection Clauses of the U.S. and California Constitutions and the Commerce Clause of the U.S. Constitution."
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