This bill requires board of directors of publicly traded corporation to have at least one female director and one director who is a member of an underrepresented community. Punishes violation of requirement with civil penalty of at least $10,000 for publicly traded corporations.
Personal Choice and Responsibility
The definition of “Female” means an individual who self-identifies as a woman, regardless of the sex assigned to the individual at birth. It seems a man can self identify as other than male and qualify. Women work hard to earn their place and this is offensive and belittling to a woman that would be appointed to a board for any other reason than ability. Underrepresented means an individual who identifies as having a low income or low income background, which includes about anyone except a straight white person, and they should feel the same about their ability to qualify.
California became the first state to legally compel public companies to add women directors in 2018. By December 31, 2021, boards with six or more directors must have at least three female directors, boards of five must have at least two, and boards with four or fewer members must have one. HB 3110 requires board of directors of publicly traded corporations to have at least one female director and at least one director who are a member of an underrepresented community, establishes violations of this requirement, sets civil penalties, and requires annual reporting by the Secretary of State on related factors and compliance.
This is a move of government to control the free market. Increasing the board number to comply is an accommodation and insulting to those filling those positions. It goes against business concept that shareholders elect board members. Shareholders have many interests, but first and foremost it is the financial health of the business. Companies have a fiduciary duty to shareholders to maximize their return on investment. That means that directors are chosen based on whether they will further the goal of benefiting shareholders, not the community at-large.