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Calif. Published ‘Shame List’ of Companies That Refused to Report on Diversity

'The Legislature and the Secretary blame a ‘secretive, insular’ selection process for the problem with current board compositions... '

(Headline USA) California is keeping a “shame list” of corporations that have failed to comply with a state law requiring boards of directors to meet a diversity quota, according to the Washington Examiner.

The law, which was struck down by a Los Angeles judge last week, required publicly held companies to select board members from a pre-approved state list of under-represented communities. Judicial Watch, a conservative watchdog group, took the state to court over the law and succeeded. 

But the California Secretary of State office still has a list on its website providing information about companies that refused to comply with the state law. The list, published on March 1, revealed that only 301 out of California’s 716 corporations reported compliance. Some of the companies that refused to report on the diversity of their boards to the state include: Fisker, Broadcom, Levi Strauss, and Tilly’s.

Under the law, these companies would be subject to a minimum $100,000 fine.

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However, Superior Court Judge Terry Green ruled on April 1 that forcing companies to elect state-approved directors violates the Constitution’s equal protection clause.

“In effect, the included groups were included simply because they asked to be. Excluded groups were excluded because they didn’t show up,” Green wrote.

“The Legislature and the Secretary blame a ‘secretive, insular’ selection process for the problem with current board compositions. Yet there has been no attempt to improve that process, nor has any good explanation been offered for that lack of effort,” he continued.

Green has not said whether California’s “shame list” should remain public, since the law is now invalid. The state has 60 days to appeal his decision.  

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Democrat Gov. Gavin Newsom signaled he intends to do just that.

“California’s diversity is our greatest strength, helping to drive our innovation, creativity, and leadership on the global stage — as well as better financial outcomes for businesses with a range of perspectives represented in the board room,” he said in a statement after Green’s ruling.

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