California Corporate & Securities Law

As noted in yesterday's post, Secretary of State Shirley N. Weber is asking U.S. District Court Judge R. Gary Klausner to dismiss a challenge to California's board quota statutes.   In her motion to dismiss, the Secretary of State advances the...

In July, 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. 2:21-cv-05644-RGK-RAO (July...

An "other constituency statute" permit, but do not require, boards of directors to consider non-shareholder interests (such as the interests of employees, the environment, et cetera) when making decisions.  California and Delaware are among a...

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...

The California General Corporation Law includes two provisions providing relief when a director is incompetent and/or felonious.  Section 302 of the Corporations Code permits the board of directors to declare vacant the office of a director who has...

Section 305 of the California Corporations Code sets forth the rules for filling vacancies on the board of directors.  Today's post discusses the somewhat confusing requirements of the statute as it pertains to the filling of of vacancies by the...

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...

Last year, the City of Pontiac General Employees' Retirement System filed a derivative suit against the Board of Directors and Chief Executive Officer of Cisco Systems, Inc.  The gist of the complaint was that the "Defendants publicly misrepresented...

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...