Text of ME LD 1200 (2021)

Printed on recycled paper 130th MAINE LEGISLATURE FIRST REGULAR SESSION-2021 Legislative Document No. 1200 H.P. 878 House of Representatives, March 22, 2021 An Act To Bring Gender Parity to Corporate Boards Received by the Clerk of the House on March 18, 2021. Referred to the Committee on Judiciary pursuant to Joint Rule 308.2 and ordered printed pursuant to Joint Rule 401. ROBERT B. HUNT Clerk Presented by Representative RECKITT of South Portland. Page 1 - 130LR0741(01) 1 Be it enacted by the People of the State of Maine as follows: 2 Sec. 1. 13-C MRSA §803, sub-§4 is enacted to read: 3 4. Corporate board gender parity. A publicly held corporation subject to this Act 4 shall comply with the board of directors gender parity requirements of this subsection. 5 A. No later than the end of the last day of business of the 2022 calendar year, a publicly 6 held corporation subject to this Act shall have a minimum of one female director on its 7 board of directors. A corporation may increase the number of directors on its board to 8 comply with this subsection. 9 B. No later than the end of the last day of business of the 2024 calendar year, a publicly 10 held corporation subject to this Act shall comply with this paragraph. 11 (1) If the number of directors on its board of directors is 6 or more, the corporation 12 shall have a minimum of 3 female directors. 13 (2) If the number of directors on its board of directors is 5, the corporation shall 14 have a minimum of 2 female directors. 15 (3) If the number of directors on its board of directors is 4 or fewer, the corporation 16 shall have a minimum of one female director. 17 C. The Secretary of State shall publish the following reports on its publicly accessible 18 website. 19 (1) No later than July 1, 2022, the Secretary of State shall publish a report 20 documenting the number of corporations subject to this Act that have at least one 21 female director. 22 (2) No later than March 1, 2023 and annually thereafter, the Secretary of State 23 shall publish a report containing, at a minimum, the following: 24 (a) The number of publicly held corporations subject to this Act; and 25 (b) The number of publicly held corporations subject to this Act that were in 26 compliance with the requirements of paragraph B at at least one point during 27 the preceding calendar year. 28 D. The Secretary of State shall adopt rules to implement this subsection. Rules adopted 29 under this paragraph are routine technical rules as defined by Title 5, chapter 375, 30 subchapter 2-A. 31 E. The Secretary of State may impose fines for violations of this subsection as follows: 32 (1) For failure to file board member information with the Secretary of State 33 pursuant to a rule adopted pursuant to this subsection, $100,000; 34 (2) For a first violation, $100,000; and 35 (3) For a 2nd or subsequent violation, $300,000. 36 For the purposes of this paragraph, each director seat required by this subsection to be 37 held by a female that is not held by a female during at least a portion of a calendar year 38 counts as a violation. Page 2 - 130LR0741(01) 1 Fines imposed and collected by the Secretary of State under this paragraph must be 2 made available, upon appropriation by the Legislature, for use by the Secretary of State 3 to offset the costs of administering this subsection. 4 F. For purposes of this subsection, the following terms have the following meanings. 5 (1) "Female" means an individual who self-identifies as a woman, without regard 6 to the individual's designated sex at birth. 7 (2) "Publicly held corporation" means a corporation with outstanding shares listed 8 on a major United States stock exchange. 9 SUMMARY 10 This bill requires the board of directors of a publicly held corporation subject to the 11 Maine Business Corporations Act to include at least one female director. The number of 12 female directors required is based on the number of directors on the board. The Secretary 13 of State is required to publish reports about boards of directors and may impose fines on 14 corporations for failing to report information and for failing to have on their boards the 15 minimum number of female directors. 10 11 12 13 14 15

Page 1 - 130LR0741(03) STATE OF MAINE _____ IN THE YEAR OF OUR LORD TWO THOUSAND TWENTY-ONE _____ H.P. 878 - L.D. 1200 An Act To Bring Gender Parity to Corporate Boards Be it enacted by the People of the State of Maine as follows: Sec. 1. 13-C MRSA §803, sub-§4 is enacted to read: 4. Corporate board gender parity. A publicly held domestic corporation subject to this Act shall comply with the board of directors gender parity requirements of this subsection. A. No later than June 1, 2023, a domestic publicly held corporation subject to this Act shall have a minimum of one female director on its board of directors. A corporation may increase the number of directors on its board to comply with this subsection. B. No later than June 1, 2024, a domestic publicly held corporation subject to this Act shall comply with this paragraph. (1) If the number of directors on its board of directors is 6 or more, the corporation shall have a minimum of 3 female directors. (2) If the number of directors on its board of directors is 5, the corporation shall have a minimum of 2 female directors. (3) If the number of directors on its board of directors is 4 or fewer, the corporation shall have a minimum of one female director. C. The Secretary of State shall publish the following reports on its publicly accessible website. (1) No later than June 30, 2023, the Secretary of State shall publish a report with the names of the publicly held domestic corporations subject to this Act and whether each corporation has the required minimum of one female director on its board of directors as designated on the corporation's 2023 annual report under section 1621, subsection 1. (2) No later than June 30, 2024 and annually thereafter, the Secretary of State shall publish a report with the names of the publicly held domestic corporations subject to this Act and whether each corporation has the required minimum number of LAW WITHOUT GOVERNOR'S SIGNATURE JUNE 30, 2021 CHAPTER 385 PUBLIC LAW Page 2 - 130LR0741(03) female directors pursuant to paragraph B as designated on the corporation's last annual report under section 1621, subsection 1. D. The Secretary of State shall adopt rules to implement this subsection. Rules adopted under this paragraph are routine technical rules as defined by Title 5, chapter 375, subchapter 2-A. E. For purposes of this subsection, the following terms have the following meanings. (1) "Female" means an individual who self-identifies as a woman, without regard to the individual's designated sex at birth. (2) "Publicly held domestic corporation" means a corporation with outstanding shares listed on a major United States stock exchange. Sec. 2. 13-C MRSA §1621, sub-§1, as amended by PL 2007, c. 323, Pt. C, §40 and affected by Pt. G, §4, is further amended to read: 1. Filing of annual report. Each domestic corporation, unless excused as provided in subsection 4 or excluded by subsection 6, and each foreign corporation authorized to do business in this State, shall deliver to the Secretary of State for filing, within the time prescribed by this section, an annual report setting forth: A. The name of the domestic or foreign corporation and the jurisdiction of its incorporation; B. The information required by Title 5, section 105, subsection 1; C. A brief statement of the character of the business in which the domestic or foreign corporation is actually engaged in this State, if any; E. The address of its principal office, wherever located; F. The names of its principal officers; and G. The names of its directors, except that in the case of a corporation that has eliminated its board of directors pursuant to section 743 the annual report must set forth the names of the shareholders instead.; H. An indication as to whether the domestic corporation is publicly held; I. An indication of how many female directors are on the board of directors of the publicly held domestic corporation; and J. An indication as to whether the domestic publicly held corporation has the minimum number of female directors on its board of directors required by section 803, subsection 4.