What's happening
This bill requires publicly held corporations with headquarters in New York to have a minimum number of female directors on their boards.
Why it matters
Sets clear requirements and deadlines for female representation. The bill introduces a phased schedule, requiring at least one female director by the end of 2020 and increasing that number based on board size by 2023, pushing corporations to diversify their leadership in a concrete timeframe.
Broadens the definition of ‘female’ for compliance purposes. The legislation explicitly includes anyone who self-identifies as a woman, regardless of sex assigned at birth, making the policy more inclusive of transgender women.
Creates transparency and public accountability. Corporations must annually report their board composition and the number of female directors to the Secretary of State, and the state is required to publish reports on compliance, helping stakeholders and the public track progress.
Introduces meaningful penalties for noncompliance. Significant civil fines (up to $300,000 per violation) and penalties for failing to report are established, providing a strong incentive for corporations to meet the new standards and ensuring the mandate is enforceable rather than symbolic.
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Who cares
Headline styles
Require Women on Corporate Boards
Plain English, a few words. Used as the page title.
Sponsors
Senator · Senate District 38
No co-sponsors yet.
History
- Referred to corporations, authorities and commissions
- Referred to corporations, authorities and commissions
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
4011
2019-2020 Regular Sessions
IN SENATE
February 25, 2019
Introduced by Sen. CARLUCCI -- read twice and ordered printed, and when printed to be committed to the Committee on Corporations, Authorities and Commissions
AN ACT to amend the business corporation law, in relation to the number of female directors required to serve on the board of directors of certain publicly held corporations
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The business corporation law is amended by adding a new section 702-a to read as follows: § 702-a. Appointment of female directors.
(a) Definitions. For purposes of this section, the following terms shall have the following meanings:
(1) "Female" means an individual who self-identifies her gender as a woman, without regard to the individual's designated sex at birth.
(2) "Principal executive office" means the principal executive office according to the corporation's Form 10-K filed with the Securities and Exchange Commission.
(3) "Publicly held domestic or foreign corporation" means a domestic corporation or an authorized foreign corporation, as such terms are defined in subparagraphs (a) (4) and (a) (7) of section 102 (Definitions), respectively, with outstanding shares listed on a national securities exchange.
(b)(1) No later than December 31, 2020, a publicly held domestic or foreign corporation whose principal executive office is located within this state shall have a minimum of one female director on its board. A corporation subject to this section may increase the number of directors on its board, pursuant to section 702 (Number of directors), to comply with this section.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10051-01-9
S. 4011 2
(2) No later than December 31, 2023, a publicly held domestic or foreign corporation whose principal executive office is located within this state shall comply, as applicable, with the following:
A. For a corporation with six or more directors, at least three female directors shall serve on its board.
B. For a corporation with five directors, at least two female directors shall serve on its board.
C. For a corporation with four directors or less, at least one female director shall serve on its board.
(3) A publicly held domestic or foreign corporation whose principal executive office is located within this state shall file with the secretary of state, on an annual basis, a list of all directors and each director's term of service, and shall identify the number of female directors serving on the board.
(c) No later than July 1, 2020, the secretary of state shall publish a report on its website documenting the number of domestic and foreign corporations whose principal executive office is located in this state and the number of female directors on each corporation's board.
(d) No later than March 1, 2021, and on an annual basis thereafter, the secretary of state shall publish a report on its website regarding, at minimum, all of the following:
(1) The number of corporations subject to this section that were in compliance with the requirements of this section during at least a portion of the preceding calendar year;
(2) The number of publicly held corporations that moved their United States headquarters to New York from another state or out of New York into another state during the preceding calendar year; and
(3) The number of publicly held domestic or foreign corporations that were subject to this section during the preceding year, but are no longer publicly traded.
(e) The secretary of state may adopt rules and regulations to implement this section. The secretary of state may impose fines for violations of this section as follows:
(1) For each director seat required to be held by a female pursuant to subparagraphs (b) (1) or (b) (2) of this section, which is not held by a female during at least a portion of a calendar year, a corporation shall be subject to a civil penalty of one hundred thousand dollars for a first violation and three hundred thousand dollars for each subsequent violation. For purposes of this subparagraph, a female director who held a director seat for at least a portion of the year shall not be a violation.
(2) Failure to file board member information in a timely manner with the secretary of state pursuant to subparagraph (b) (3) of this section, a corporation shall be subject to a civil penalty of one hundred thousand dollars.
(3) Any fine collected by the secretary of state pursuant to this section shall be used by the secretary of state to offset the cost of administering this section.
§ 2. Paragraph (a) of section 1319 of the business corporation law is amended by adding a new subparagraph 4-a to read as follows:
(4-a) Section 702-a (Appointment of female directors).
§ 3. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the business corporation law, in relation to the number of female directors required to serve on the board of directors of certain publicly held corporations
Purpose
This bill requires publicly held domestic and foreign corporations based in New York to appoint women to their boards of directors, in order to increase gender diversity in corporate governing roles.
Summary of provisions
Section 1 adds a new section 702-a to the business corporation law stat- ing no later than December 31, 2023, a publicly held domestic or foreign corporation whose principal executive office is located within this state shall comply, as applicable, with the following:
Read the full memo (705 words)
A. For a corporation with six or more directors, at least three female directors shall serve on its board.
B. For a corporation with five directors, at least two female directors shall serve on its board.
C. For a corporation with four directors or less, at least one female director shall serve on its board.
Section 2 is the effective date.
Justification
This bill requires publicly held domestic and foreign corporations based in New York to appoint women to their boards of directors, in order to increase gender diversity in corporate governing roles. Research indi- cates that women serving on boards of directors of publicly held corpo- rations will boost the economy, improve opportunities for women in the workplace, and improve the performance and protect the value of corpo- rations for shareholders and stockholders, including retirees.
Under the bill, a publicly held domestic or foreign corporation whose principal executive office is located in this State would be required to have a minimum of one female director on its board by December 31, 2020. Additionally, by December 31, 2023 a publicly held domestic or foreign corporation located in this State would be required to have a minimum of: one female director if the corporation has four or fewer directors; two female directors if the corporation has five directors; and at least three female directors if the corporation has six or more directors. To determine compliance with this requirement, the bill requires a corpo- ration to file with the Secretary of State a list of all of its direc- tors and their terms of service and identify the number of directors that are female.
The bill provides that a corporation that violates the bill is subject to the following penalties: $100,000 for a first violation and $300,000 for a subsequent violation for each director seat required to be held by a female which is not held by a female during at least a portion of a calendar year; and $100,000 for failure to file board member information with the Secretary of State in a timely manner. Any fine collected would be used by the Secretary of State to offset the cost of adminis- tering the bill's provisions.
Additionally, the bill requires the Secretary of State to report, by July 1, 2020, the number of publicly held domestic and foreign corpo- rations in this State and the number of female directors on each corpo- ration's board. By March 1, 2021, and annually thereafter, the Secretary of State would report: (1) a list of corporations subject to, and in compliance with, the requirements of this bill; (2) the number of publicly held domestic and foreign corporations that moved their United States headquarters to New York from another state or from New York to another state; and (3) the number of corporations that were subject to the bill's provisions during the preceding year, but are no longer publicly traded.
This bill is similar to a California law to increase the gender diversi- ty of corporate leadership, by requiring California-based publicly held corporations to appoint women to their boards of directors. Other coun- tries have also addressed the lack of gender diversity on corporate boards by instituting quotas mandating 30 to 40 percent of seats to be held by women directors, including in Norway, which since 2003 requires 40 percent female representation on corporate boards, and many other European nations, such as France, Germany, Iceland, the Netherlands, and Spain.
Legislative history
New Legislation
Fiscal implications
None to state.
Effective date
This act shall take effect immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.