New California Law to Require Representation from “Underrepresented Communities” on Boards of Public Companies Headquartered in California

California’s Assembly Bill (“AB”) 979 is set to make waves both within the state and across the country as a groundbreaking new law that would require companies to diversify their boards and reserve seats for directors from “underrepresented communities.” The bill defines a director from an “underrepresented community” as “an individual 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.” The bill, which the state legislature passed on August 30, 2020, would require all publicly held companies with headquarters in California to have a minimum ratio of members from underrepresented communities. If the governor signs the law, it will be the first of its kind in the United States, as no other law mandates representation from deemed underrepresented communities among company board seats.

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