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Newsom Signs Law Mandating Diversity Quotas for Corporate Boardrooms

• October 1, 2020 2:18 pm

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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.