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Newsom Signs Law Mandating Diversity Quotas for Corporate Boardrooms

California governor Gavin Newsom (D.) on Wednesday signed legislation mandating publicly traded businesses to hire one diverse board member each by 2021.

Newsom signed a series of racial justice bills last night before their Oct. 1 expiration, including the boardroom diversity quota bill. In addition to adding one diverse member each by 2021, companies with four-person boards must have at least two diverse members, and nine-person boards must include at least three diverse directors by 2022 to meet the quota. California is the first state in the country to implement such a mandate. 

The bill defines a "director from an underrepresented community" as a person "who self-identifies as Black, African American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian, or Alaska Native, or who self-identifies as gay, lesbian, bisexual, or transgender."

Several corporations, including Zillow and Nextdoor, already pledged to add a black director to their boards earlier this year following a wave of racial justice protests. In August, Amazon, Google, and other companies collaborated on a pledge to hire 100,000 low-income or minority workers in New York City over the next 10 years.

California lawmakers created a slew of racial justice legislation following a summer of racial justice protests that began after the death of George Floyd in May. Newsom signed other bills Wednesday evening, one that established a government reparations task force, and another that now allows judges to change sentences if they are believed to be harsher due to racial bias or discrimination.