California’s ‘Shame List’ of Corporations That Don’t Declare Diversity

Companies like Lions Gate Entertainment and Live Nation have not shown they met a California law that says boards of directors must be diverse.

A Los Angeles judge recently found the regulation illegal, but a public “shame list” still exists to show which firms have the most minority groups on their boards.

Publicly Shamed

This past week, Judicial Watch won a judicial challenge to 2020 legislation requiring publicly traded corporations to pick board members from a previously approved state list of underrepresented populations.

The needed number of directors varies.

According to Judicial Watch Senior Counsel Robert Sticht, “it’s revealing when the biggest firms in America refuse to cooperate with this federal Big Brother reporting plan.”

“I can understand people not wanting to be publicly shamed.”

According to the California Secretary of State’s website, just 301 firms indicated conformity with the “Underrepresented Communities on Boards” in a 2021 state disclosure form.

Along with many other Silicon Valley tech and medical businesses that did not file declarations, Fisker and Broadcom were among them. The refusal to file “timely” board member data is punishable by a $100,000 fine.

Tesla, Walt Disney, The Gap, Williams-Sonoma, and Visa were among the corporations that met the quota.

According to the legislation, 90% of chief executives in 2019 were white.

This Excludes Groups

On April 1, Superior Court Judge Terry Green decided to force the firms to elect directors who breach equal protection obligations. Three taxpayers claimed public funds were used to support illegal legislation.

Green slammed state attorneys for favoring certain groups over others.

The list includes people who are black, African American, Latino, Hispanic, Asian, Native American, Pacific Islander, Native Hawaiian, or Alaska Native.

It excludes Jews, Indians, and Muslims.

“The court brought this up first,” Sticht remarked. “Initially, Asians were not on the list. When questioned how the state chose the groups, they stated it was based on advocacy.”

Sticht added if someone may self-identify as LGBT, they may also self-identify as Native American to adhere to the state’s laws.

A pure quota is unconstitutional, he argued. Green stated his view, “In effect, the organizations were included because they requested it. Excluded groups didn’t turn up.”

The Capitol Rotunda in Sacramento with a corporate jet flying overhead.

He went on to say, “The legislature and the secretary attribute the problem with present board compositions to a ‘secretive, insular’ selection procedure. No effort has been made to enhance the process, and no good explanation has been presented.”

It has 60 days to appeal. Due to a statute deemed unlawful, the judge has not said whether the webpage would remain available.

“It’s a clear attempt to coerce compliance with a statute the legislature knew was unlawful,” Sticht said.

When questioned about the judge’s decision, Gov. Gavin Newsom’s office fully endorsed the diversity measures that have been set in place in California.