A Road Map For Board Diversity Laws

It now appears—at least until the appellate dust settles—that California's statutory efforts to mandate board seats for females and individuals from underrepresented communities is on hold.

The recent defeats that two trial courts handed California suggests now may be an opportune time to rethink (and possibly reframe) statutory board diversity efforts to focus on disclosure, not mandates. The first ruling, on April 1, involved California's law mandating corporate board seats for underrepresented communities, while the second ruling, on May 13, dealt with the state's landmark requirement that corporate boards include women.

Both California courts rejected the evidence supporting the state's board diversity mandates. While the procedural avenues to these rulings differed slightly, their legal premises rested on the same failure of the state to prove these laws were narrowly tailored to address specific harms that the state had a compelling interest to address.