Building diversity on corporate boards

Photo by Eli Sagor via Flickr (CC BY-NC 2.0)

By Elizabeth Castillo


AB 979 would require people from “underrepresented communities” to have at least one seat on corporate boards in California by the end of 2021. People who self-identify as Black, African American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian, Alaska Native or gay, lesbian, bisexual or transgender qualify as someone from an underrepresented community. The proposal was amended to include people who self-identify as LGBT. The bill, by Assembly members Chris Holden, a Pasadena Democrat, and Cristina Garcia, a Bell Gardens Democrat, was inspired by a similar 2018 law that mandated women in boardrooms. If enacted, it would be the first law nationwide to police the racial makeup of corporate boards. The requirements grow in 2022, when boards with four to nine people must have at least two members from an underrepresented community and boards with nine or more people must have at least three.


State Controller Betty Yee and State Treasurer Fiona Ma are supporters. Others include the American Civil Liberties Union of California, California’s Black and Hispanic Chambers of Commerce and other advocacy groups representing people of color.


Keith Bishop, a listed opponent and a corporate law attorney, says the bill is unconstitutional. No major business groups, such as the California Chamber of Commerce, are listed as formal opponents.


Nationwide 19.5% of board members of Fortune 100 companies are people of color, according to a 2018 report. The Latino Corporate Directors Association reported that 86% of California-based public companies have no Latinos on their boards even though 39% of the state’s residents are Latino. The state law mandating women on corporate boards has faced legal challenges, so if this bill becomes law, it will likely face similar objections.


Newsom signed the bill on Sept. 30. He said the CEOs of HP and Bloom Energy tracked down his cell phone number to advocate for the bill. “That’s very meaningful when you have leadership by example in those two iconic California-based companies,” he said.