On February 24, 2021, Venable partner Belinda Vega was quoted in Law360 on litigation arising from the push to diversify corporate boards.
According to the article, the question of whether new state mandates and investor-driven pressure on businesses to diversify leadership may also lead to discrimination cases is unanswered. A hypothetical example of such a case might be an outside director on an all-white board being asked to step down and the board then nominating a person of color for the role.
Even though workplace antidiscrimination laws like Title VII of the Civil Rights Act don't cover corporate board directors, since they're not employees, that doesn't mean employers should ignore bias concerns if they oust a board member. "I would not be advising board members to kick off existing board members to add diversity to the boards," Vega said. "I would be advising them to expand their board number."
Shareholders have also sued companies, accusing them of effectively donning rose-colored glasses in their public communications about their diversity and inclusion commitments while not actually meeting their stated diversity goals, said Vega.
"What has happened with respect to a lot of the mandates — whether it's coming from the state legislators or whether it's coming from pressure among shareholders — there [are] some companies being sued under shareholder derivative suits for misrepresenting diversity in their executive C-suites and boards," Vega said.
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