AP

California official says women on boards law is toothless

Dec 2, 2021, 6:48 PM | Updated: 7:26 pm

LOS ANGELES (AP) — A California official defending the state’s landmark law that mandates women be placed on corporate boards testified Thursday that it was essentially toothless and there are no plans to penalize companies for not complying.

Under the 2018 law, publicly held corporations based in California have to appoint up to three women to their boards of directors by January and could face hefty fines for not doing so or for failing to file the required paperwork.

But Betsy Bogart, a division chief testifying in Los Angeles Superior Court on behalf of her boss, the secretary of state, said the law is not enforced.

“It’s required but there’s no penalty, so it’s essentially voluntary,” Bogart said.

The disclosure came on the second day of trial in a lawsuit by the conservative legal group Judicial Watch that claims it’s illegal to use taxpayer funds to enforce a law that violates the equal protection clause of the California Constitution by mandating a gender-based quota.

During opening statements Wednesday in Los Angeles Superior Court, a deputy attorney general said the office would not levy fines for not complying with SB826, the Women on Boards law.

“The secretary of state has no plans to draft regulations or implement fines in furtherance of the act,” Deputy Attorney General Ashante Norton said.

Norton defended the law as constitutional and necessary to reverse a culture of discrimination that favors men. She said no additional funding was spent implementing it and the law served a compelling government interest that improved companies bottom lines and the state’s economy.

The law required publicly held companies headquartered in California to have one member who identifies as a woman on their boards of directors by the end of 2019. By January, boards with five directors must have two women and boards with six or more members must have three women.

The law called for penalties ranging from $100,000 fines for failing to report board compositions to the California secretary of state’s office. Companies that do not include the required number of female board members can be fined $100,000 for first violations and $300,000 for subsequent violations.

Bogart said there were no penalties if a company lied about the makeup of its board and there was no follow up if they failed to file the required report.

Fewer than half the nearly 650 applicable corporations in the state reported last year that they had complied. More than half didn’t file the required disclosure statement, according to the most recent report.

A document entered as evidence revealed that then-Secretary of State Alex Padilla had warned the governor that his office couldn’t enforce the law as it was written.

Two weeks before then-Gov. Jerry Brown signed the bill into law in September 2018, Padilla wrote him a letter stating he supported the “admirable objectives” of the law but said his office didn’t have the capacity or authority to collect fines.

“Any attempt by the secretary of state to collect or enforce the fine would likely exceed its authority,” Padilla wrote.

Padilla said it would cost more than $10 million to create infrastructure for the program. Fines anticipated would be inadequate to fund the estimated $900,000 it would cost each year to maintain it.

He said the bill would only provide an incentive as long as there was enforcement.

Brown noted when he signed the bill that the law could be overturned in court but he wanted to send a message during the #MeToo era.

Supporters of the law said it has already been successful and a few other states have either passed similar legislation or were considering bills that would put more women on boards.

Before the California law went into effect, women held 17% of the seats on company boards in the state, based on the Russell 3000 Index of the largest companies in the U.S., according to the advocacy group 50/50 Women on Boards. As of September, the percentage of board seats held by women climbed to more than 30% in California, compared to 26% nationally.

Still, some 40% of the largest companies in California need to add women to their boards to comply with the law, the group said.

Bogart said the focus had been on education and outreach, sending a letter to corporations to notify them of the law. She said the office did not plan to send such a letter this year.

When asked if the secretary of state would never enforce the law in whole or part, she said she couldn’t say.

“I can’t tell you if we’ll never do it,” she said.

However, she repeatedly told Norton that there were no plans to implement regulations around SB826 or to collect fines.

She said they were enforcing the part of the law that required annual reports but that fines were discretionary.

The nonjury trial in Los Angeles Superior Court is expected to take six to seven days and will focus on a legal question. Judge Maureen Duffy-Lewis will rule whether the law is constitutional.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

An Apache group that has fought to protect land it considers sacred from a copper mining project in...

Associated Press

A US appeals court ruling could allow mine development in central Arizona on land sacred to Apaches

An Apache group that has fought to protect land from a copper mining project in central Arizona suffered a significant blow.

33 minutes ago

On Friday, March 1, 2024, the U.S. Food and Drug Administration said yogurt sold in the U.S. can ma...

Associated Press

Eating yogurt may reduce risk of type 2 diabetes, FDA says

Eating at least two cups of yogurt a week might reduce the risk of type 2 diabetes, the U.S. Food and Drug Administration said.

3 hours ago

Arizona will not approve new housing construction on the fast-growing edges of metro Phoenix that r...

Associated Press

Arizona Senate passes plan to manage rural groundwater, but final success is uncertain

A plan to manage rural groundwater passed the Arizona Senate amid concerns about the availability of sufficient water for future generations.

2 days ago

A woman pauses while shopping at a Kohl's store in Clifton, N.J., Jan. 26, 2024. On Thursday, Feb. ...

Associated Press

Federal Reserve’s preferred inflation gauge picked up last month in sign of still-elevated prices

An inflation gauge favored by the Federal Reserve increased in January, the latest sign that the slowdown in U.S. consumer price increases is occurring unevenly from month to month.

3 days ago

This undated image provided by Mikel Desmond shows his brother Marcus Tessier, who turned up in Dem...

Associated Press

Missing teen with autism found in New Mexico, about 200 miles away from his Arizona home

A missing teen with autism has been found in New Mexico — about 200 miles away from his home in southern Arizona.

3 days ago

A newly released report on last year’s fatal crash involving a pickup truck and a group of bicycl...

Associated Press

Report suggests steering of vehicle that caused fatal Goodyear bicycle crash worked fine

A new report on last year’s fatal Goodyear bicycle crash has cast doubts about the driver’s claim the vehicle’s steering locked up.

4 days ago

Sponsored Articles

...

Collins Comfort Masters

Avoid a potential emergency and get your home’s heating and furnace safety checked

With the weather getting colder throughout the Valley, the best time to make sure your heating is all up to date is now. 

(KTAR News Graphic)...

Boys & Girls Clubs

KTAR launches online holiday auction benefitting Boys & Girls Clubs of the Valley

KTAR is teaming up with The Boys & Girls Clubs of the Valley for a holiday auction benefitting thousands of Valley kids.

...

Sanderson Ford

The best ways to honor our heroes on Veterans Day and give back to the community

Veterans Day is fast approaching and there's no better way to support our veterans than to donate to the Military Assistance Mission.

California official says women on boards law is toothless