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Legislation

California Legislature passes bill requiring female board representation

Assembly also passes climate-change risk bill for CalPERS, CalSTRS

A bill that requires domestic and foreign corporations whose principal executive office is located in California to have a minimum of one female director on its board by Dec. 31, 2019, passed the state Legislature on Thursday and is headed to the desk of Gov. Edmund G. "Jerry" Brown Jr.

California would be the first state in the nation with such a requirement.

By Dec. 31, 2021, corporations with six or more directors would be required to have three female directors, corporations with a five-member board would have to have two female directors and boards with four or fewer directors would need to have one female director.

If signed by the governor, the bill would also require the secretary of state, no later than July 1, 2019, to publish a report on its website documenting the number of domestic and foreign corporations that have at least one female director.

Separately, the California Assembly approved a bill Thursday that requires the country's two largest public pension funds to consider "climate-related financial risk" when making investment decisions. The bill would, until Jan. 1, 2035, would require the CalPERS and CalSTRS boards to analyze climate-related financial risk "to the extent the boards identify the risk as a material risk," the bill states. The bill would also require each board to publicly report, by Jan. 1, 2020, and every three years thereafter, on the climate-related financial risk of its public market portfolio.

The $358.9 billion California Public Employees' Retirement System, Sacramento, and $228 billion California State Teachers' Retirement System, West Sacramento, already have directives to take climate risk, among other risks, into account when making investment decisions.

Friday is the last day for the state Legislature to pass bills.