Friday, August 16, 2019

California Board Composition Statute Challenged

California Board Composition Statute Challenged


Last year, California passed a statute requiring, for any public corporation either incorporated or having its principal place of business in California, that it have on its Board of Directors a minimum number of women. That minimum number is set on a sliding scale based upon the total number of directors. HERE IS A LINK to my earlier posting on that statute.

The legislative review of the statute indicated that there was a significant risk of litigation, Then Governor Brown, when signing the legislation, noted that “serious legal concerns have been raised” with respect to its requirements. He also noted that “I don’t minimize the potential flaws that indeed may prove fatal to its ultimate implementation.”

Those observations have turned out to be prophetic; suit has been filed in California challenging are their requirements. The complaint asserts that “the legislation’s quota system for female representation on corporate boards employees express gender classifications. As a result, SP 826  is immediately suspect and presumptively invalid and triggers strict scrutiny review.“


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