BILL NUMBER: AB 1491 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JANUARY 13, 2010
AMENDED IN ASSEMBLY JANUARY 4, 2010
INTRODUCED BY Assembly Member V. Manuel Perez
FEBRUARY 27, 2009
An act to amend Section 318 of a
dd Section 318.1 to the Corporations Code, relating to
corporations.
LEGISLATIVE COUNSEL'S DIGEST
AB 1491, as amended, V. Manuel Perez. Corporations: boards of
directors: diversity.
Under existing law, the Secretary of State, or the University of
California campus or the California State University campus to which
the Secretary of State delegates the authority, maintains a registry
of distinguished women and minorities who are available to serve on
corporate boards of directors. Existing law authorizes this
information to be made available to a person or entity that provides
database access or search services, as specified. This bill
would authorize that information to be made available to a person or
entity that provides those services only if the registrant agrees.
The bill would also acknowledge that the Secretary of State
transferred the authority and duty to maintain the registry to
California State University, Fullerton, in January 1999.
Existing law requires the Secretary of State, in consultation with
the Senate Commission on Corporate Governance, Shareholder Rights,
and Securities Transactions, to fix fees for registering with the
registry, to report, at least once every 3 years, to the Legislature
on the registry's effectiveness , and to take other
actions.
This bill would instead require the Secretary of State to consult
with the relevant Senate and Assembly committees in taking those
actions.
This bill would set forth the background and history of the
registry, including that it was transferred by the Secretary of State
to California State University, Fullerton, which maintained the
registry from 1999 to 2002. The bill would also require the Secretary
of State to thoroughly investigate the present operational status of
the registry, including attempting to determine the extent of use of
the registry while maintained by the campus, why the campus
discontinued maintaining the registry, what has become of the
registry, and how might the registry most effectively be restored.
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 318.1 is added to the
Corporations Code , to read:
318.1. (a) The Legislature finds and declares the following:
(1) Section 318 of the Corporations Code, as originally enacted,
required the Secretary of State to develop and maintain a fee-based,
self-supporting registry of distinguished women and minorities who
are available to serve on corporate boards of directors. The
Secretary of State was authorized to charge fees to persons who
wished to be included in the registry and to persons or entities who
sought access to the registry for the purpose of identifying
qualified women and minorities as candidates for appointment or
election to corporate boards of directors.
(2) In 1998, the statute providing for the registry was amended to
require the Secretary of State to notify the campuses of the
University of California and the California State University of the
opportunity for one of them to maintain the registry. If more than
one campus expressed interest in maintaining the registry, the
Secretary of State would have been required to select a campus based
on a competitive selection process. If a campus was selected, the
Secretary of State was to transfer the information maintained in the
registry, at no cost, to the campus. The selected campus would then
be required to maintain the registry in a manner consistent with the
statute.
(3) In 1999, the Secretary of State transferred the authority and
duty to maintain the registry to California State University,
Fullerton. That campus operated the registry until 2002. Neither that
campus nor the Secretary of State presently operates the registry.
(b) The Secretary of State shall conduct a thorough investigation
into the present operational status of the registry. The Secretary of
State shall report the findings of the investigation to the
respective chairpersons of the Assembly Committee on Judiciary, the
Assembly Committee on Jobs, Economic Development, and the Economy,
and the Senate Committee on Judiciary. At a minimum, the Secretary of
State's investigation shall attempt to determine the following:
(1) How many individuals and entities paid fees to the registry
for its services while the registry was in operation at California
State University, Fullerton, from 1999 to 2002?
(2) Why did that campus discontinue maintaining the registry in
2002?
(3) What became of the registry database and fees that had been
collected from registrants or persons or entities seeking access to
the registry?
(4) How might the registry most effectively be restored in a
manner that effectuates the Legislature's original intent in enacting
Section 318 of the Corporations Code?
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.
( l ) 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 relevant Senate and Assembly committees,
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 relevant Senate and Assembly
committees, 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 relevant Senate and Assembly
committees.
(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 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) (1) 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.
(2) The Legislature recognizes that in January 1999, the Secretary
of State transferred the authority and duty to maintain the
registry, and all materials associated with the registry, to
California State University, Fullerton.