SACRAMENTO, Calif. — On Wednesday, Governor Gavin Newsom signed Assembly Bill 979, which requires corporations to appoint leaders from under-represented communities defined as people who identify as Black, Latino, Native American, Asian American, Pacific Islander, Native Hawaiian or Native Alaskan.

Companies also can comply with the law by appointing directors who self-identify as gay, lesbian, bisexual or transgender.

The law requires corporations to have at least one director from an under-represented community by the end of 2021.

Additionally, "such a corporation with five directors to have a minimum of two female directors and such a corporation with 6 or more directors to have a minimum of 3 female directors."

If guidelines aren't implemented, there could possibly be a fine incurred by the corporation.

A corporation with nine or more directors must have at least three directors from an under-represented community by 2022 to comply with the law.

Companies that don’t comply with the law could face fines between $100,000 and $300,000. The fines will be imposed by the Secretary of State.

The bill states, "According to the United States Bureau of Labor Statistics, only 31 percent of African Americans and 22 percent of Latinos worked in management, professional, and related occupations while 54 percent of Asians and 41 percent of Whites worked in the same occupation."

Additionally, an analysis performed by the Latino Corporate Directors Association, found there are 662 publicly traded companies headquartered in California. Two hundred thirty-three of these companies have all White boards of directors as of this year.

This bill is an attempt at closing the disparity between all white board members and those who are underrepresented in corporations here in California.