Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Denver news in your inbox

Catch up on the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Des Moines news in your inbox

Catch up on the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Minneapolis-St. Paul news in your inbox

Catch up on the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tampa Bay news in your inbox

Catch up on the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Charlotte news in your inbox

Catch up on the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Illustration: Eniola Odetunde/Axios

California’s unprecedented law requiring all public companies headquartered there to have at least one female board member by 2020 is drawing lawsuits.

Why it matters: Pressure to diversify corporate boards has historically come from shareholders and special interest groups. With California's law poised to take effect — and at least three states weighing similar legislation — critics are raising the question of government overreach.

Driving the news: The California law, signed last year by then-governor Jerry Brown, sets a penalty of $100K in fines for public companies that don't have at least one woman on their board by yearend 2019. The looming deadline has drawn two lawsuits.

  • One, filed last week by an investor in a company that makes X-ray security scanners and other products, argues that the "women quota" law is "not only deeply patronizing to women" but also "plainly unconstitutional."
  • The investor is represented by the Pacific Legal Foundation, a libertarian nonprofit.
  • The other lawsuit was filed in August by Judicial Watch, a conservative activist group.
  • It argues "that spending taxpayer money to enforce the law would violate the California Constitution," according to the AP.

Opponents are hoping to block the law before it gets stricter: By 2021, companies with five-person boards will have to have at least two women, while boards of six or more will have to have three.

  • Companies that refuse to comply more than once will be fined $300,000 per seat that should be filled by a woman.
  • A coalition led by the California Chamber of Commerce, said in a letter to lawmakers that by focusing "only on gender," the law "potentially elevates it as a priority over other aspects of diversity."
  • In the Pacific Legal Foundation case, lead lawyer Anastasia Boden told AP: “The law mandates exactly what the equal protection clause forbids — taking into account things like sex or race“ in hiring.

The law may already be working: Corporate stragglers are racing to expand or switch up their boards.

  • Skechers, the footwear company, has been pressured to add women to its board since at least 2014 — but didn't take action until seven months after the law was signed.
  • OSI Systems, the manufacturer whose shareholder sued California last week, doesn't currently have any women on its board but will ask shareholders to vote to add one before this year's deadline.
  • According to new data by the nonprofit 2020 Women on Boards, California saw the biggest annual increase of all U.S. states in companies with boards that are at least 20% female.

Yes, but: Most big companies subject to the law — like Google, Wells Fargo and Disney — have had women on their boards for years, prodded, in some cases, by backlash against all-male boardrooms.

  • Facebook added Sheryl Sandberg to its previously all-male board in 2012, amid pressure from pension fund CalSTRS and others.
  • But: Come 2021, Facebook six-person board will need to include one more woman to be in compliance.
  • 70 of the 602 publicly traded companies headquartered in California were not in compliance as of July, according to research by Clemson University and University of Arizona.

The backdrop: Investors are getting louder about companies without diverse boards.

  • BlackRock says it wants companies to have at least 2 women directors on every board (but never threatened any consequences, like divestment).
  • The last S&P 500 company without a female director appointed one this year.
  • Other countries, like Norway and France, have laws similar to California's.

What they’re saying:

  • The latest lawsuit strikes "at one of the principal areas of vulnerability that was identified when the law was passed,” Teresa Johnson, a partner at law firm Arnold Porter, tells Axios.
  • “The state will also have to show that the quota solution under the law is the least restrictive way to remedy past discrimination.”
  • When he signed the law, Brown said, "It's high time corporate boards include the people who constitute more than half the 'persons' in America."

What’s next: Lawmakers in other states, including Massachusetts, New Jersey, and Washington, hope to follow California's lead.

Go deeper:

Go deeper

Updated 3 mins ago - World

Russian police arrest over 3,000 protesters demanding Navalny's release

Photo: OLGA MALTSEVA/AFP via Getty Images

Russian police on Saturday arrested more than 3,300 people as protesters nationwide demanded that opposition leader Alexey Navalny be released from jail.

Details: Demonstrations that began in the eastern regions of Russia spread west to more than 60 cities. At least 3,324 of people were detained and tens of thousands of others protested into the night despite the presence of law enforcement and extremely low temperatures, per the OVD-Info group, which monitors political arrests.

Updated 2 hours ago - Politics & Policy

Arizona Republicans censure Cindy McCain and GOP governor

Combination images of Cindy McCain and Gov. Doug Ducey. Photo: FilmMagic/FilmMagic for U.S.VETS/Michael Brochstein/SOPA Images/LightRocket via Getty Images

Arizona Republican Party members voted on Saturday to censure prominent GOP figures Cindy McCain, Gov. Doug Ducey and former Sen. Jeff Flake (R-Ariz.), who've all faced clashes with former President Trump.

Why it matters: Although the resolution is symbolic, this move plus the re-election of the Trump-endorsed Kelli Ward as state GOP chair shows the strong hold the former president has on the party in Arizona, despite President Biden winning the state in the 2020 election.

Updated 5 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Eniola Odetunde/Axios

  1. Health: Most vulnerable Americans aren't getting enough vaccine information — Fauci says Trump administration's lack of facts on COVID "very likely" cost lives.
  2. Education: Schools face an uphill battle to reopen during the pandemic.
  3. Vaccine: Florida requiring proof of residency to get vaccine — CDC extends interval between vaccine doses for exceptional cases.
  4. World: Hong Kong puts tens of thousands on lockdown as cases surge — Pfizer to supply 40 million vaccine doses to lower-income countries — Brazil begins distributing AstraZeneca vaccine.
  5. Sports: 2021 Tokyo Olympics hang in the balance.
  6. 🎧 Podcast: Carbon Health's CEO on unsticking the vaccine bottleneck.