The State of California has published the SB 826 Act, a pioneering law in the United States to promote gender diversity in listed companies, in September.

The preamble of this piece of legislation explains that having more women on boards will boost California's economy and promote opportunities for women in the workplace. The law follows the practice already existing in some European countries such as Germany, Norway and Italy, which have gone beyond mere recommendations to requiring minimum quotas of women on the boards of directors of listed companies.

The regulation specifies that listed companies domiciled in California, whether they are US companies or not, must have at least one female board member by the end of 2019. It also stipulates that by 2012: i) in companies with four or fewer board members, at least one must be a woman; ii) companies with five board members must have at least two women on the board, and iii) in those with six or more board members, at least three should be women. Failure to comply with these provisions can trigger fines of between USD100,000 and USD300,000.

Finally, the law states that by 1 July 2019 at the latest, the Secretary of State must publish on its website a report disclosing the number of companies domiciled in California that have at least one woman on their boards.

Furthermore, by 1 March 2020 at the latest, and thereafter every year, the Secretary of State will have to report, through the same channel, the number of companies that: i) comply with the provisions of this law, at least in the preceding twelvemonth; ii) have moved their HQ out of the state of California, at least during the preceding year, and iii) were required to comply with this law but are no longer listed on the Stock Exchange.