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Key Unanswered Questions About California's Gender Quota Law


The California legislature has directed the Secretary of State to publish a report by March of next year on the number of corporations that are in compliance with the state's unique board gender quota law.  The legislature has also authorized the Secretary of State to fine corporations that violate the law.  Before the Secretary of State does either, however, it will need perforce to answer a number of questions, including the following:
  1. The law is applies to "a publicly held domestic or foreign corporation whose principal executive offices, according to the corporation’s SEC 10-K form, are located in California".  Cal. Corp. Code § 301.3(b). If a domestic corporation's principal executive offices are located in another state, is it subject to the law?
  2. No later than the close of 2021, the minimum number of female directors will depend on the "number of directors".  Cal. Corp. Code § 301.3(b).
    1. Is the "number of directors" the number of authorized directors or the number of directors then in office?
    2. If the "number of directors" changes during the year, how will the minimum number of directors be determined?
  3. The law defines "publicly held corporation" as a "corporation with outstanding shares listed on a major United States stock exchange".  Cal. Corp. Code § 301.3(f)(2).
    1. What is a "major United States stock exchange"?
    2. Must a corporation have shares listed during the entire year or does it become subject to the law if it has shares listed on any day during the year?
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