The opinion
TO BE PUBLISHED IN THE OFFICIAL REPORTS
OFFICE OF THE ATTORNEY GENERAL
State of California
DANIEL E. LUNGREN
Attorney General
______________________________________
OPINION :
: No. 98-304
of :
: June 30, 1998
DANIEL E. LUNGREN :
Attorney General :
:
ANTHONY M. SUMMERS :
Deputy Attorney General :
:
______________________________________________________________________
HONORABLE SCOTT BAUGH, MEMBER OF THE CALIFORNIA ASSEMBLY, has
requested an opinion on the following question:
Is Corporations Code section 318, requiring the Secretary of State to maintain a registry of
women and minorities to serve on corporate boards of directors, rendered unconstitutional by the
recent adoption of section 31 of article I of the Constitution?
CONCLUSION
Corporations Code section 318, requiring the Secretary of State to maintain a registry of
women and minorities to serve on corporate boards of directors, is not rendered unconstitutional
by the recent adoption of section 31 of article I of the Constitution.
ANALYSIS
Corporations Code section 318 Footnote No. 1 requires the Secretary of State to maintain a
registry of "distinguished women and minorities" who are available to serve on corporate boards
of directors. Section 318 states:
"(a) The Secretary of State shall develop and maintain a registry of distinguished women
and minorities who are available to serve on corporate boards of directors. As used in this
section, 'minority' means an ethnic person of color including American Indians, Asians
(including, but not limited to, Chinese, Japanese, Koreans, Pacific Islanders, Samoans, and
Southeast Asians), Blacks, Filipinos, and Hispanics.
"(b) For each woman or minority who participates in the registry, the Secretary of State
shall maintain information on his or her educational, professional, community service, and
corporate governance background. . . .
"(c) In addition to the information subdivision (b) requires, each woman or minority who
participates in the registry may disclose any number of personal attributes that may contribute to
board diversity. Those attributes may include, but are not limited to, gender, physical disability,
race, or ethnic origin.
"(d) In addition to the information subdivision (b) requires, each woman or minority who
participates in the registry may indicate characteristics of corporations for which he or she would
consider, or is especially interested in, serving as a director. These characteristics may include,
but are not limited to, company size, industry, geographic location, board meeting frequency,
director time commitments, director compensation, director insurance or indemnification, or
social policy concerns.
"(e) Any woman or minority may nominate himself or herself to the registry by filing with
the Secretary of State the information required by subdivision (b) on a form the secretary
prescribes. Any registrant may attach a copy of his or her resume and up to two letters of
recommendation to his or her registration form. Each registrant's registration form, together with
any attached resume or letters of recommendation, shall constitute his or her registry transcript.
"(f) The Secretary of State shall make appropriate rules requiring registrants to renew or
update their filings with the registry, as necessary to ensure continued accuracy of registry
information.
"(g) The Secretary of State shall assign each registrant a file number, then enter the
information described in subdivisions (b), (c), and (d) into a data base, using the registrant's file
number to identify him or her. The registry data base shall not disclose any registrant's name or
street address, but may list the city, county, or ZIP Code of his or her business or residence
address. The secretary shall make data base information available to those persons described in
subdivisions (i) and (j).The secretary may provide that access either by permitting direct data
base searches or by performing data base searches on written request.
"(h) The Secretary of State may also make information contained in the registry data base
available to any person or entity qualified to transact business in California that regularly
engages in the business of providing data base access or search services; provided, that data base
access will not be construed to entitle the user to access any registrant's transcript.
"(i) The Secretary of State shall make information contained in a reasonable number of
registrants' transcripts available to any corporation or its representative. A 'representative' may be
an attorney, an accountant, or a retained executive recruiter. A 'retained executive recruiter' is an
individual or business entity engaged in the executive search business that is regularly retained to
locate qualified candidates for appointment or election as corporate directors or executive
officers.
"(j) The Secretary of State may also grant access to a reasonable number of registrants'
transcripts to any other person . . . .
"(k) The Secretary of State may employ reasonable means to verify that any party seeking
access to registry transcript information is one of those specified in subdivision (i) or (j). To that
end, the secretary may require a representative to identify its principal, but may not disclose that
principal's identity to any other person.
"(l ) Upon written request specifying the registrant's file number, the Secretary of State shall
provide any party entitled to access to registry transcripts with a copy of any registrant's
transcript. The secretary may by rule or regulation specify other reasonable means by which
persons entitled thereto may order copies of registrants' transcripts.
"(m) Notwithstanding any other provision of law, no person shall be entitled to access to
information the registry contains, except as this section specifically provides.
"(n) The Secretary of State shall charge fees for registering with the registry, obtaining
access to the registry data base, and obtaining copies of registrants' transcripts. The Secretary of
State, in consultation with the Senate Commission on Corporate Governance, Shareholder
Rights, and Securities Transactions, shall fix those fees by regulation. Fees shall be fixed so that
the aggregate amount of all fees collected shall be sufficient to cover the total cost of
administering the registry program. Registration fees shall be fixed so as to encourage qualified
women and minorities to participate. Fees shall be deposited into the Secretary of State's
Business Fee Fund.
"(o) The Secretary of State may make any rule, regulation, guideline, or agreement the
secretary deems necessary to carry out the purposes and provisions of this section.
"(p) The Secretary of State may cooperate with the California Commission on the Status of
Women, the California Council to Promote Business Ownership by Women, the Senate
Commission on Corporate Governance, Shareholder Rights, and Securities Transactions,
women's organizations, minority organizations, business and professional organizations, and any
other individual or entity the secretary deems appropriate . . . .
"(q) The Secretary of State may seek registrants' consent to be listed in a published directory
of women and minorities eligible to serve as corporate directors, which will contain a summary
of each listed registrant's qualifications. The secretary may periodically publish, or cause to be
published, such a directory. Only those registrants who so consent in writing may be included in
the directory. The printed directory shall be provided to any person upon payment of a fee, which
the Secretary of State will determine by regulation, in consultation with the Senate Commission
on Corporate Governance, Shareholder Rights, and Securities Transactions.
"(r) The Secretary of State shall implement this section no later than January 1, 1995.
"(s) At least once in each three-year period during which the registry is available for
corporate use, the Secretary of State, in consultation with the Senate Commission on Corporate
Governance, Shareholder Rights, and Securities Transactions, shall report to the Legislature on
the extent to which the registry has helped women and minorities progress toward achieving
parity in corporate board appointments or elections."
Accordingly, a person meeting the qualifications of section 318 may become a registrant by self-
nomination, which consists of filing a form prescribed by the Secretary of State, to which may be
attached a resume and up to two letters of recommendation. These documents, collectively,
become the registrant's "transcript." The registry, including transcripts, is made available to
persons who are seeking qualified candidates to serve as corporate directors.
We are asked whether section 318 is now unconstitutional due to the adoption of section 31
of article I of the Constitution by the voters at the general election on November 5, 1996. The
1996 constitutional amendment states:
"(a) The state shall not discriminate against, or grant preferential treatment to, any
individual or group on the basis of race, sex, color, ethnicity, or national origin in the operation
of public employment, public education, or public contracting.
"(b) This section shall apply only to action taken after the section's effective date.
"(c) Nothing in this section shall be interpreted as prohibiting bona fide qualifications based
on sex which are reasonably necessary to the normal operation of public employment, public
education, or public contracting.
"(d) Nothing in this section shall be interpreted as invalidating any court order or consent
decree which is in force as of the effective date of this section.
"(e) Nothing in this section shall be interpreted as prohibiting action which must be taken to
establish or maintain eligibility for any federal program, where ineligibility would result in a loss
of federal funds to the state.
"(f) For the purposes of this section, 'state' shall include, but not necessarily be limited to,
the state itself, any city, county, city and county, public university system, including the
University of California, community college district, school district, special district, or any other
political subdivision or governmental instrumentality of or within the state.
"(g) The remedies available for violations of this section shall be the same, regardless of the
injured party's race, sex, color, ethnicity, or national origin, as are otherwise available for
violations of then-existing California antidiscrimination law.
"(h) This section shall be self-executing. If any part or parts of this section are found to be
in conflict with federal law or the United States Constitution, the section shall be implemented to
the maximum extent that federal law and the United States Constitution permit. Any provision
held invalid shall be severable from the remaining portions of this section."
We conclude that the 1996 constitutional amendment does not render section 318
unconstitutional.
In interpreting a constitutional provision, we follow the same principles utilized in
construing a statutory provision. "Ordinarily, '[r]ules of construction and interpretation that are
applicable when considering statutes are equally applicable in interpreting constitutional
provisions' [Citation.]" (Armstrong v. County of San Mateo (1983) 146 Cal.App.3d 597, 608.) As
in the case of a statute, we must determine the intent of the provision, looking first at the plain
meaning of the words used. "To determine the intent of legislation, we first consult the words
themselves, giving them their usual and ordinary meaning. [Citations.]" (DaFonte v. Up-Right,
Inc. (1992) 2 Cal.4th 593, 601.) When the constitutional provision has been adopted as an
initiative measure approved by the voters, we may consider the analysis prepared by the
Legislative Analyst, the arguments included in the ballot pamphlet, and the summary of the
measure by the Attorney General. In 75 Ops.Cal.Atty.Gen. 155, 213 (1993), we explained:
"In construing constitutional provisions adopted through the initiative power, one long
accepted extrinsic aid is the election brochure pamphlet, which may constitute the only
legislative history of a constitutional amendment adopted through the initiative power. [Citation.]
In addressing issues of constitutional interpretation, the brochure arguments, analysis by the
Legislative Analyst, and title and summary prepared by the Attorney General may be
considered." (Fn. omitted.)
Applying these principles of construction, we first note that section 31 of article I, by its
own terms, is limited to governmental discrimination against or preferences for individuals or
groups on the basis of race, sex, color, ethnicity, or national origin "in the operation of public
employment, public education, or public contracting." (Cal. Const., art. I, § 31, subd. (a).) Thus,
it does not purport to apply to every distinction made on the basis of race, sex, color, ethnicity, or
national origin, but only to discrimination or preferences in the operation of public employment,
public education, or public contracting.
The Attorney General's summary of the initiative measure (Proposition 209) contained in
the voter's pamphlet stated in part:
"Prohibits the state, local governments, districts, public universities, colleges, and schools,
and other government instrumentalities from discriminating against or giving preferential
treatment to any individual or group in public employment, public education, or public
contracting on the basis of race, sex, color, ethnicity, or national origin." (Ballot Pamp., Gen.
Elec. (Nov. 5, 1996), p. 30.)
In Lungren v. Superior Court (1996) 48 Cal.App.4th 435, 442, the court upheld the validity of
the ballot summary prepared by the Attorney General, stating in part: "[A]ny statement to the
effect that Proposition 209 repeals affirmative action programs would be overinclusive and hence
'false and misleading.' (Elec. Code, § 9092.)" Consistent with the ballot summary of the Attorney
General, the Legislative Analyst stated with respect to the initiative measure:
"This measure would eliminate state and local government affirmative action programs in
the areas of public employment, public education, and public contracting to the extent these
programs involve 'preferential treatment' based on race, sex, color, ethnicity, or national origin. .
. ." (Ballot Pamp., Gen. Elec. (Nov. 5, 1996), p. 30, italics added.)
It is beyond dispute that Proposition 209 was limited in scope to the areas of public
employment, public contracting, and public education. It is readily apparent that section 318 does
not fall into any of these categories. The registry created under section 318 is for use by those
seeking candidates to serve as directors of corporations. The registry has no role in facilitating
public employment, contracting, or education.
We conclude that section 318, requiring the Secretary of State to maintain a registry of
women and minorities to serve on corporate boards of directors, is not rendered unconstitutional
by the recent adoption of section 31 of article I of the Constitution.
*****
Footnote No. 1
All references hereafter to the Corporations Code are by section number only.