Last Friday, the 2020 California board diversity statute requiring publicly held domestic or foreign corporations whose principal executive office is located in California to have a minimum of “one director from an underrepresented community” on its board by December 31, 2021 was struck down by a Los Angeles County Superior Court judge as violating the Equal Protection Clause of the California Constitution.  Under the statute: “‘Director from an underrepresented community’ means an individual who self-identifies as Black, African American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian, or Alaska Native, or who self-identifies as gay, lesbian, bisexual, or transgender.”

From the inception of California’s predecessor 2018 statute that required gender diversity on corporate boards, many who cared about improving board diversity feared that the statute had state and federal constitutional vulnerabilities, including because California was purporting to regulate corporations that were domiciled outside California and thus intruding on their internal corporate affairs.  But the positive effects of California’s statute have been substantial as board diversity from underrepresented communities has increased markedly since its enactment.  It is our hope that corporate America will continue to focus on the need to increase racial, gender and other types of diversity and to capitalize on the full range of talent in our great nation, not just at the boardroom level, but from the ground floor up all the way through to the C-Suite.

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