California could become the first state in the nation to enact legislation promoting gender diversity in corporate boardrooms. On May 31, 2018, the State Senate of California passed a bill that would require public companies headquartered in California to comply with certain gender quota requirements with respect to board composition.

The bill, if enacted, would require any “publicly held” domestic and foreign corporation whose principal executive offices, according to the corporation’s Form 10-K, are located in California to have a minimum of one “female” on its board of directors no later than December 31, 2019. No later than December 31, 2021, the required minimum would increase to 2 female directors for corporations with 5 directors or to 3 female directors for corporations with 6 or more directors. The bill defines a “female” as “an individual who self-identifies her gender as a woman, without regard to the individual’s designated sex at birth.” A “publicly held” corporation is defined as a corporation with shares listed on “a major United States stock exchange.”

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