On September 30, 2018, California Governor Jerry Brown signed California Senate Bill 826, amending the California Corporations Code to generally require publicly held corporations, whose principal executive offices are located in California, to have at least one woman on their board of directors by close of the 2019 calendar year. Specifically, the new law mandates, no later than the close of the 2019 calendar year, that “a publicly held domestic or foreign corporation whose principal executive offices, according to the corporation’s SEC 10-K form, are located in California shall have a minimum of one female director on its board.”
Further, by close of the 2021 calendar year, the new law mandates that “a publicly held domestic or foreign corporation whose principal executive offices, according to the corporation’s SEC 10-K form, are located in California shall comply with the following: (1) If its number of directors is six or more, the corporation shall have a minimum of three female directors. (2) If its number of directors is five, the corporation shall have a minimum of two female directors. (3) If its number of directors is four or fewer, the corporation shall have a minimum of one female director.”
Publicly held corporations that do not comply with the new law shall be subject to specified violations, including a violation of $100,000.00 for the first violation and $300,000.00 for a second or subsequent violation.
The text of the bill can be found at http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180SB826. Governor Brown’s signing message, which was copied to the U.S. Senate Committee on the Judiciary, can be found at https://www.gov.ca.gov/wp-content/uploads/2018/09/SB-826-signing-message.pdf
As Governor Brown’s signing message states, “serious legal challenges have been raised” to the bill even prior to its signing into law. While it remains to be seen whether those legal challenges will be successful, for now, publicly held corporations should be aware of this new California state law.
Heather is a Partner with PIB Law and focuses her practice on the representation of financial institutions in connection with financial services-related litigation matters.
Prior to joining PIB Law, Heather was a Partner at Kralik ...