06 Oct

October 2020: Year-End Board of Directors Diversity Requirement

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What happened?
On September 30, 2020, Governor Newsom passed AB 979, which introduces requirements for employer board of directors.

What are the details?
AB 979 is a first-of-its-kind legislation requiring that no later than the close of the 2021 calendar year, publicly held domestic or foreign corporations, whose principal executive office is in California, include a minimum of one director from an underrepresented community. By the end of 2022 these corporations who have more than four but fewer than nine directors to have a minimum of two directors from underrepresented communities, and such a corporation with zero or more directors to have a minimum
of three directors from underrepresented communities.

Additionally, the bill requires the Secretary of State to include in their reports on their online website to include the number of corporations in compliance with the bill’s provisions. The Secretary of State will have the authority to impose fines for violations of the bill’s provisions.

The full text of AB 979 can be found here.

An article summarizing the bill can be found here.

What do employers need to do?
Employers should evaluate their board of directors and begin a process to include the required members of the communities mentioned in the bill.


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