BILL NUMBER: AB 1491 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member V. Manuel Perez
FEBRUARY 27, 2009
An act to amend Section 318 of the Corporations Code, relating to
corporations.
LEGISLATIVE COUNSEL'S DIGEST
AB 1491, as introduced, V. Manuel Perez. Corporations: boards of
directors: diversity.
Under existing law, the Secretary of State maintains a registry of
distinguished women and minorities who are available to serve on
corporate boards of directors and authorizes the Secretary of State
to make this information available to a person or entity that
provides data base access or search services, as specified.
This bill would authorize the Secretary of State to make that
information available to a person or entity that provides those
services only if the registrant agrees.
Existing law requires the Secretary of State, in consultation with
the Senate Commission on Corporate Governance, Shareholder Rights,
and Securities Transactions, to report, at least once every 3 years,
to the Legislature on the registry's effectiveness.
This bill would instead require the Secretary of State to consult
with the relevant Senate and Assembly committees in preparing those
reports. The bill would also require the Secretary of State, on or
before June 1, 2010, to request recommendations from public pension
funds on how to improve the registry's effectiveness.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 318 of the Corporations Code is amended to
read:
318. (a) The Secretary of State shall develop and maintain a
registry of distinguished women and minorities who are available to
serve on corporate boards of directors. As used in this section,
"minority" means an ethnic person of color including American
Indians, Asians (including, but not limited to, Chinese, Japanese,
Koreans, Pacific Islanders, Samoans, and Southeast Asians), Blacks,
Filipinos, and Hispanics.
(b) For each woman or minority who participates in the registry,
the Secretary of State shall maintain information on his or her
educational, professional, community service, and corporate
governance background. That information may include, but is not
limited to:
(1) Paid or volunteer employment.
(2) Service in elected public office or on public boards or
commissions.
(3) Directorships, officerships, and trusteeships of business and
nonprofit entities, including committee experience.
(4) Professional, academic, or community awards or honors.
(5) Publications.
(6) Government relations experience.
(7) Experience with corporate constituents.
(8) Any other areas of special expertise.
(c) In addition to the information subdivision (b) requires, each
woman or minority who participates in the registry may disclose any
number of personal attributes that may contribute to board diversity.
Those attributes may include, but are not limited to, gender,
physical disability, race, or ethnic origin.
(d) In addition to the information subdivision (b) requires, each
woman or minority who participates in the registry may indicate
characteristics of corporations for which he or she would consider,
or is especially interested in, serving as a director. These
characteristics may include, but are not limited to, company size,
industry, geographic location, board meeting frequency, director time
commitments, director compensation, director insurance or
indemnification, or social policy concerns.
(e) Any woman or minority may nominate himself or herself to the
registry by filing with the Secretary of State the information
required by subdivision (b) on a form the secretary prescribes. Any
registrant may attach a copy of his or her resume and up to two
letters of recommendation to his or her registration form. Each
registrant's registration form, together with any attached resume or
letters of recommendation, shall constitute his or her registry
transcript.
(f) The Secretary of State shall make appropriate rules requiring
registrants to renew or update their filings with the registry, as
necessary to ensure continued accuracy of registry information.
(g) The Secretary of State shall assign each registrant a file
number, then enter the information described in subdivisions (b),
(c), and (d) into a data base, using the registrant's file number to
identify him or her. The registry data base shall not disclose any
registrant's name or street address, but may list the city, county,
or ZIP Code of his or her business or residence address. The
secretary shall make data base information available to those persons
described in subdivisions (i) and (j). The secretary may provide
that access either by permitting direct data base searches or by
performing data base searches on written request.
(h) The Secretary of State may , to the extent the registrant
has agreed, also make information contained in the registry
data base available to any person or entity qualified to transact
business in California that regularly engages in the business of
providing data base access or search services; provided, that data
base access will not be construed to entitle the user to access to
any registrant's transcript.
(i) The Secretary of State shall make information contained in a
reasonable number of registrants' transcripts available to any
corporation or its representative. A "representative", for purposes
of this subdivision, may be an attorney, an accountant, or a retained
executive recruiter. A "retained executive recruiter", for purposes
of this subdivision, is an individual or business entity engaged in
the executive search business that is regularly retained to locate
qualified candidates for appointment or election as corporate
directors or executive officers.
(j) The Secretary of State may also grant access to a reasonable
number of registrants' transcripts to any other person who
demonstrates to the secretary's satisfaction that the person does
both of the following:
(1) Seeks access to the registry in connection with an actual
search for a corporate director.
(2) Intends to use any information obtained from the registry only
for the purpose of finding qualified candidates for an open position
on a corporate board of directors.
(k) The Secretary of State may employ reasonable means to verify
that any party seeking access to registry transcript information is
one of those specified in subdivision (i) or (j). To that end, the
secretary may require a representative to identify its principal, but
may not disclose that principal's identity to any other person.
() Upon written request specifying the registrant's file number,
the Secretary of State shall provide any party entitled to access to
registry transcripts with a copy of any registrant's transcript. The
secretary may by rule or regulation specify other reasonable means by
which persons entitled thereto may order copies of registrants'
transcripts.
(m) Notwithstanding any other provision of law, no person shall be
entitled to access to information the registry contains, except as
this section specifically provides.
(n) The Secretary of State shall charge fees for registering with
the registry, obtaining access to the registry data base, and
obtaining copies of registrants' transcripts. The Secretary of State,
in consultation with the Senate Commission on Corporate Governance,
Shareholder Rights, and Securities Transactions, shall fix those fees
by regulation. Fees shall be fixed so that the aggregate amount of
all fees collected shall be sufficient to cover the total cost of
administering the registry program. Registration fees shall be fixed
so as to encourage qualified women and minorities to participate.
Fees shall be deposited into the Secretary of State's Business Fee
Fund.
(o) The Secretary of State may make any rule, regulation,
guideline, or agreement the secretary deems necessary to carry out
the purposes and provisions of this section.
(p) The Secretary of State may cooperate with the California
Commission on the Status of Women, the California Council to Promote
Business Ownership by Women, the Senate Commission on Corporate
Governance, Shareholder Rights, and Securities Transactions, women's
organizations, minority organizations, business and professional
organizations, and any other individual or entity the secretary deems
appropriate, for any of the following purposes:
(1) Promoting corporate use of the registry.
(2) Locating qualified women and minorities and encouraging them
to participate in the registry.
(3) Educating interested parties on the purpose and most effective
use of the registry.
The secretary may also prepare and distribute publications
designed to promote informed use of the registry.
(q) The Secretary of State may seek registrants' consent to be
listed in a published directory of women and minorities eligible to
serve as corporate directors, which will contain a summary of each
listed registrant's qualifications. The secretary may periodically
publish, or cause to be published, such a directory. Only those
registrants who so consent in writing may be included in the
directory. The printed directory shall be provided to any person upon
payment of a fee, which the Secretary of State will determine by
regulation, in consultation with the Senate Commission on Corporate
Governance, Shareholder Rights, and Securities Transactions.
(r) The Secretary of State shall implement this section no later
than January 1, 1995.
(s) At least once in each three-year period during which the
registry is available for corporate use, the Secretary of State, in
consultation with the relevant Senate Commission
on Corporate Governance, Shareholder Rights, and Securities
Transactions and Assembly committees , shall
report to the Legislature on the extent to which the registry has
helped women and minorities progress toward achieving parity in
corporate board appointments or elections.
(t) The Secretary of State shall notify each University of
California campus and each California State University campus of the
opportunity to maintain the registry created pursuant to this
section. If more than one campus of the university or state
university expresses interest in maintaining the registry, the
Secretary of State shall select a campus based on a competitive
selection process. If a campus is selected, the Secretary of State
shall transfer the information contained in the registry, free of
cost, to that campus. Any University of California or California
State University campus selected to maintain the registry shall do so
in a manner consistent with this section. Funds deposited in the
Secretary of State's Business Fees Fund pursuant to this section
shall be transferred to the university selected to maintain the
registry, and shall be used to administer the registry program. The
Secretary of State shall maintain the registry until a University of
California or California State University campus agrees to do so.
(u) On or before June 1, 2010, the Secretary of State shall
request recommendations from local and state public pension funds on
how to improve the effectiveness of the registry in increasing women
and minority membership on corporate boards of directors.