California Gov. Gavin Newsom signed legislation Wednesday that will require the boards of publicly traded companies based in the state to have at least one racially, ethnically or otherwise diverse director by 2021.
The new quota is the first of its kind in the U.S. and follows a similar California measure enacted two years ago that mandated female directors on all boards of the state’s public companies. The law is expected to have wide-ranging impact within the state’s borders and beyond, potentially sparking fresh debate and legislative efforts in other parts of the country.
“We have a vision about how this state could be an example for the rest of the country,” said Assemblyman Chris Holden, a co-author of the bill. ”This is an opportunity to get people of color at the table where the decisions are made, where the culture is set.”
Under the new law, individuals who identify as Black, African-American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian or Alaska Native, or who identify as gay, lesbian, bisexual or transgender, would be considered eligible for meeting the requirement.
The bill passed 56-8 in the assembly at the end of August; dissenters said it would violate equal protection provisions of the law.
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