Report: Some California Corporations Ignore Law Requiring Females on Boards

California was the first state to require equitable gender representation on corporate boards, but not all companies are complying with the 2018 law, according to a report released this week by Secretary of State Alex Padilla.

According to the report, 295 of the state's 625 publicly held corporations required to file a 2019 Corporate Disclosure Statement– which reveals if they have complied with the 2018 law requiring at least one woman on their board – did not do so. And 48 of the 330 corporations that filed the statement didn't have a female on their board.

The 2018 legislation required publicly held corporations whose principal executive offices are located in California to have at least one female director on their boards by the end of 2019. By the end of 2021, corporations must add one or two additional female directors, based on the size of the company. According to Padilla's website, when the law passed in 2018, a quarter of California's publicly held corporations had no women directors on their boards.

Companies that don't report their board compositions to Padilla's office face a $100,000 fine, and companies that report but do not have a female board member can be fined $100,000 for the first violation and $300,000 for additional violations.

In addition to companies' failure to comply with the new requirements, the Golden State's law has been met by two legal challenges. The conservative activist group Judicial Watch filed a lawsuit in August, claiming that the law violates the California Constitution by spending taxpayer money to enforce the new requirements.

Pacific Legal Foundation, a libertarian public interest law firm, filed a lawsuit in November, arguing that the law violates the U.S. Constitution's equal protection clause. The firm is arguing that boards should not be based on sex.

Meanwhile, lawmakers are considering legislation in Michigan, New Jersey and Pennsylvania that follows California's lead in requiring companies to dedicate a certain percentage of board seats to females. Illinois, New York and Maryland are working to collect more data on gender diversity on company boards in their state.

A Hawaii bill that would require corporations to include women on their boards is advancing in the state's Senate, but some business advocates are not on board.

"I'll let you be the judge of whether this law would be more likely to achieve gender equality or chase executive offices out of the state," wrote Kelii Akina, president of the Grassroot Institute of Hawaii think tank, according to The Associated Press.