Market Response to Court Rejection of California’s Board Diversity Laws
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SeriesACLE Law & Economics Seminars
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Speaker(s)Jonathan Klick (Penn Carey Law, United States)
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FieldOrganizations and Markets
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LocationUniversity of Amsterdam, Roeterseiland campus building A, Room A3.01/Hybrid
Amsterdam -
Date and time
October 24, 2023
13:00 - 14:15
Abstract
California mandated that firms headquartered in the state include women (SB 826) and underrepresented minorities (AB 979) on their corporate boards. These laws, passed in 2018, were held unconstitutional by judges on the Los Angeles County Superior Court in 2022. This paper examines the market reaction to these surprising court decisions, finding that California firms appreciated significantly on the days of the rulings, and there is evidence that firms that were not in compliance with the laws exhibited larger abnormal returns than firms that were in compliance.
Find more information about this hybrid seminar here.