TRENTON, NJ – New Jersey lawmakers are advancing a proposal that would require publicly traded corporations based in the state to ensure their boards of directors reflect New Jersey’s racial and gender diversity — or face hefty fines.
Assembly Bill A1465, pre-filed for the 2022 legislative session, is sponsored by Assemblywomen Yvonne Lopez (D-Middlesex), Eliana Pintor Marin (D-Essex), and Shanique Speight (D-Essex), with Assemblywoman Verlina Reynolds-Jackson (D-Mercer) as a co-sponsor. The measure aims to make corporate leadership more representative of the state’s demographics by establishing binding diversity requirements for companies headquartered in New Jersey.
Corporate boards would be required to mirror state demographics
Under the bill, any publicly held domestic or foreign corporation with its principal executive office in New Jersey would be required to have a board that “reflects the racial and gender diversity of this State.” Corporations could expand the size of their boards to comply with the mandate.
The legislation directs companies to use the most recent U.S. Census data to determine what racial and gender diversity should look like in proportion to New Jersey’s population. Each corporation would also be required to file an annual report with the Secretary of State listing all board members and their terms of service.
Steep penalties for noncompliance
Corporations that fail to meet the diversity threshold would face a civil penalty of $100,000 for the first violation and $300,000 for each subsequent offense. Failure to file the required board information would carry an additional $100,000 fine. Fines collected by the Secretary of State would be used to offset administrative costs of enforcing the new law.
Annual state reporting and oversight
The Secretary of State would be required to publish an annual report to the Governor and Legislature listing corporations that comply with the rule, those that relocated in or out of the state, and those that ceased public trading.
If enacted, the law would place New Jersey among the first states on the East Coast to impose legally enforceable board diversity standards — a step similar to measures previously adopted and later challenged in California.
The bill has been referred to the Assembly Law and Public Safety Committee for review and awaits further legislative action.
