California Gov. Gavin Newsom signed a law Wednesday (September 30) requiring racial diversity among corporations' board of directors.
This law is the first of its kind in the United States and applies to all publicly-traded corporations headquartered in the Golden State. It mandates these corporations must have at least one person from an "underrepresented community" on their boards by the end of 2021.
“When we talk about racial justice, we talk about power and needing to have seats at the table,” Newsom said during a press conference.
In 2022, boards of four to nine people must have at least two members from an underrepresented community. If the board has more than nine people, it must have at least three.
If companies face heavy fines if they do not comply with this law.
The legislation was reportedly inspired from a 2018 gender-focused bill that required the California-based, publicly-traded corporations to include women on their boards. It faced legal opposition from some conservative groups, USA Today reported.
"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,” but this time, no major groups or organizations made a concerted effort to undermine the law’s passage," according to The Grio.
This comes during nationwide push to include more Black representation and presence in media, industries and other areas following the killing of George Floyd and protests against racial injustice.
USA Today also found that less than 2 percent of the top executives at the 50 largest companies are Black.
“The new law represents a big step forward for racial equity,” one of the bill’s authors, Assemblyman Chris 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.”
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