One of the latest laws signed by Jerry Brown is SB 826, which requires that publicly held corporations with executive offices in California must have at least one female on its board of directors. By Dec. 31, 2021, the requirement moves up to a minimum of two female directors (if there are five on the board) and three female directors (if there are at least six on the board).
The new law goes into effect on Jan. 1, 2019. Businesses that are unsure if they qualify can look at their corporation’s SEC 10-K form to confirm their California location. The law applies to both domestic and foreign publicly held corporations.
The California Secretary of State will be responsible for enforcing the new law.
The SOS will be required to publish a report on its website by July 1, 2019, documenting the number of corporations that have at least one female director.
By March 1, 2020, the SOS must publish an annual report on its website stating:
- the number of publicly held corporations in compliance with the new law during the preceding calendar year
- the number of publicly held corporations that moved their U.S. headquarters into or out of California from another state during the preceding calendar year
- the number of publicly held corporations that are no longer publicly traded, and therefore no longer required to comply with the new law.
Companies that don’t comply with the law will be subject to stiff fines:
- $100,000 for failure to file board member information in a timely manner with the Secretary of State
- $100,000 for a first violation
- $300,000 for a second or subsequent violation.
To read more about the new law, go to the California Legislative Information website.
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