Does California's Gender Quota Law Apply To All Foreign Corporations?

SB 826 (Jackson) is reputably the first state law requiring publicly held corporations to have a minimum number of female directors.  It is generally assumed that the law applies only to those publicly held domestic and foreign corporations having their principal executive offices in California.  But is that what the new law actually provides?

The bill adds two sections to the California Corporations Code.  The first, Section 301.3, expressly imposes a quota on "a publicly held domestic or foreign corporation whose principal executive offices, according to the corporation’s SEC 10-K form, are located in California".  This language is ambiguous as to domestic corporations.  Did the legislature intend to impose gender quotas on all publicly held domestic corporations or only those with principal executive offices in California?

The scope of law becomes even more muddied with respect to publicly held foreign corporations.  While Section 301.3 includes a requirement that the foreign corporation's principal executive offices be in California, SB 826 also added a new Section 2115.5 that provides:

"Section 301.3 shall apply to a foreign corporation that is a publicly held corporation to the exclusion of the law of the jurisdiction in which the foreign corporation is incorporated."

Noticeably absent from this section is any requirement that the foreign corporation's principal executive offices be in California.  Nonetheless, it is unlikely that the legislature believed that it could impose its will on foreign corporations with no connections to California.  Even should the courts read into Section 2115.5 a requirement that a foreign corporation's principal executive offices be located in California, this may not be sufficient to overcome a challenge based on the internal affairs doctrine.  See  Why California's Gender Quota Bill Is More Likely To Be Unconstitutional Than California's Pseudo-Foreign Corporation Statute.