California Considering AB 979 to Require Public Companies to Add Board Members from Underrepresented Communities

Fenwick corporate governance practice co-chair David Bell talked to the Silicon Valley Business Journal about California’s proposed Assembly Bill 979, which would mandate that public companies headquartered in the state appoint board members from underrepresented communities.

Bell told the Silicon Valley Business Journal that after the passage of Senate Bill 826 and with racial inequality occupying public discourse, it seems reasonably likely that some version of AB 979 will be signed into law.

Bell noted that he expects some criticism about the categories of diversity included in the bill. He also recommended companies don’t cite the proposed legislation as a reason for selecting a board candidate, given the possibility of a lawsuit alleging reverse discrimination.

“It is something that they have to be careful about—not creating more litigation for themselves that they don’t need,” he said.

Some companies may face a challenge in appointing a board member from an underrepresented community by the end of 2021 since the process of finding a new board member can be a lengthy one, Bell added.

For more information, please read the alert that Bell co-authored on AB 979.

The full article is available on the Silicon Valley Business Journal (subscription required).​