Legislator Proposes To Expand Definition of "Director From An Underrepresented Community"

Enacted in 2020, AB 979 requires publicly held domestic or foreign corporations having their principal executive offices in California to have specified minimum numbers of directors from "underrepresented communities". Cal. Corp. Code §§ 301.4 &...

"Disinterested" May Be Pretermitted In Delaware But Not In California

In this post, Professor Stephen Bainbridge posits that the Delaware Supreme Court incorrectly decided Fliegler v. Lawrence, 361 A.2d 218 (Del. 1976) by requiring that stockholder approval of conflicted transaction requires a majority vote of the...

Study Finds "A Robust and Significantly Negative Stock Market Reaction" To California's Gender Quota Mandate

A study by an international team of scholars has concluded that California's imposition of a gender quota on publicly held corporations with their principal executive offices in the state resulted in a "robust and significantly negative stock market...

Ruling May Be Imminent In Female Director Quota Challenge

Readers may recall that there are at least two challenges to California's female director quota mandate (aka SB 826).  In June, the Ninth Circuit Court of Appeals resurrected one suit by holding that the challenger has standing.  Meland v. Weber, 2 F....

Challenge To Nasdaq Diversity Rule Filed In Federal Court Of Appeals

Professor Stephen Bainbridge writes that the Alliance for Fair Board Recruitment has filed a petition for review with the Fifth Circuit Court of Appeals challenging Nasdaq's board diversity rule. Some readers may be wondering why the petition was...

When A Director Is Removed, Can The Shareholders Fill The Vacancy By Written Consent?

When a director is removed from the board of a California corporation, a "vacancy" is created. Cal. Corp. Code § 192. The board of directors cannot fill the vacancy unless the board is authorized to do so in the articles of incorporation or a bylaw...

New Challenge Filed To California Board Quota Laws

Earlier this month, a Texas non-profit membership association filed a complaint in the United States District Court for the Central District (Western Division) of California, Alliance For Fair Board Recruitment v. Weber, Case No....

9th Circuit: Shareholder Is Injured When California Requires Or Encourages Discrimination

In 2018, California enacted SB 826 to impose female director quotas on publicly held domestic or foreign corporation whose principal executive offices, according to the corporation’s SEC 10-K form, are located in California. At the time, it was...

Bylaws And Supermajority Board Voting Requirements

Yesterday's post concerned various provisions that, although not required to be included in the articles of incorporation, must be included if they are to be effective.  One of these provisions relates to supermajority voting requirements:

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