Last year, California Governor Gavin Newsom signed AB 979 (2020 Cal. Stats. ch. 316) into law. Consequently, no later than the end of this year, "publicly held corporations" with their principal executive offices in California are required to have a minimum of one director from an "underrepresented community". By the end of next year, these corporations with more than 4 but fewer than 9 directors will be required to have a minimum of 2 directors from "underrepresented communities", and these corporations with 9 or more directors must have a minimum of 3 directors from "underrepresented communities". A "director from an underrepresented community" is defined as 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". Cal. Corp. Code § 301.4(e)(1).
Recently, someone on twitter ignited a flurry of press stories by accusing Hilaria Baldwin of a "decade long grift where she impersonates a Spanish person". The ensuing brouhaha illustrates some fundamental problems for corporations subject to AB 979. Under the plain words of the statute, the director's actual ancestry, place of birth, or perceived physical characteristics matter not. All that is required is that the director self-identify as a member of a listed community. Seemingly, therefore, Ms. Baldwin would qualify as a member of an underrepresented community even if it is proved that she was not born in Spain and has no Spanish ancestry. Corporations claiming Ms. Baldwin as a member of an "underrepresented community" may nonetheless face criticism, and even litigation.
AB 979 does not provide definitions of the listed communities. This creates even more uncertainty and ambiguity for directors and corporations. Does classification as "Hispanic" depend or a person's origin, culture or both? Another California statute, for example, defines "Hispanic" as "a person of Mexican, Puerto Rican, Cuban, Central or South American, or other Spanish or Portuguese culture or origin regardless of race". Cal. Pub. Cont. Code § 2051(c). If "culture" alone can make one Hispanic, why couldn't someone born in Korea of Korean parents self-identify as Hispanic so long as he or she is devoted to Spanish culture? Indeed, according to this article in Vanity Fair, Ms. Baldwin has defended herself as someone who "grew up in a family that valued Spanish culture".