California’s requirement for corporate boards challenged

Sacramento, California; November 22, 2021: A California law requiring shareholders of publicly traded companies to vote for board members based only on race or sexual orientation was challenged today by the National Center for Public Policy Research, a shareholder advocacy organization. AB 979 requires corporate boards to have a minimum number of members from “underrepresented communities,” meaning people of certain races or sexual orientations. It follows on the heels of SB 826, which requires boards to have a minimum number of women.

“California’s quota doesn’t remedy discrimination, it perpetuates it,” said Anastasia Boden, senior attorney at Pacific Legal Foundation. “This law forces shareholders to cast votes based on immutable characteristics that people were born into. The government should treat people as individuals, not based on immutable characteristics.”

In 2019, Pacific Legal Foundation filed a lawsuit challenging the state’s “woman quota” for corporate boards and received a victory at the Ninth Circuit, which ruled that shareholders have standing to challenge these quotas.

The case, National Center for Public Policy Research v. Weber, was filed in the District Court for the Eastern District of California.