On December 17, 2020, Belinda Vega was quoted in Corporate Secretary on the important role general counsel will play in advising boards, finding candidates, and devising disclosures in order to comply with new diversity requirements.
According to the article, investors are pressing companies to take specific actions to improve diversity within their organization, or at least to report on who makes up their board and workforce. A new California law is also moving the ball forward by requiring all public companies with headquarters in the state to have a minimum ratio of members from underrepresented communities starting December 31, 2021 and then new ratios from December 31, 2022.
Vega says general counsel will need to look at their company’s by-laws to determine what criteria they carry for board members, whether the board will need to be expanded to meet the law’s requirements, and what special actions they may need to take.
The law is expected to face legal challenges from critics who argue that it is unconstitutional for creating a mandatory quota related to race and sexual orientation. But Vega says she expects that once processes are in place to comply, companies will continue to do so while any challenges play out.