IL bill forcing companies to add female, African American directors contradicts IL law, constitution: Manufacturers assn

By John Breslin | May 2, 2019

An Illinois business group believes a bill that would force publicly-held corporations to have at least one female and one African-American on their boards could run afoul of the Illinois Constitution and the Civil Rights Act.

The legislation, House Bill 3394, passed the House along party lines in late March and was assigned to the Senate Commerce and Economic Development Committee on May 2.

HB3394 says "no later than the close of the 2020 calendar year, a publicly held domestic or foreign corporation whose principal executive offices ... are located in Illinois shall have a minimum of one female director and one African-American director on its board of directors."

The bill would require the Secretary of State to keep an online list of corporations that would reveal whether they are complying with the law and impose fines of up to $300,000 for noncompliance. 

Mark Denzler, president Illinois Manufacturers' Association  

Its introduction has provoked some push back from some quarters, including the Illinois Manufacturers Association (IMA).

"Manufacturers strongly support diversity in the workplace and on corporate boards," IMA President and CEO Mark Denzler told the Cook County Record.

"We support the intent of this legislation, but oppose the manner in which HB3394 seeks to accomplish the goal," Denzler said. "We agree with former California Gov. Jerry Brown who acknowledged that this type of legislation has 'serious legal concerns.'"  

California passed similar legislation, though it only included women.

"The Illinois Constitution and Civil Rights Act prohibit companies from discriminating based on gender or race and this legislation could force employers to choose between two competing laws," Drenzler said. "HB 3394 also violates the Internal Affairs Doctrine that provides the laws of the state where the company is incorporated apply, not the law where the principal offices are located."

Prior to the passage of the bill in the House, multiple outlets reported there was heated debate in the chamber.

State Rep. Tony McCombie (R-Savanna) said the bill is anti-business and one of many anti-business bills lawmakers have passed this year, according to a report published by WQAD.

The bill's main sponsor, Rep. Emanuel Chris Welch (D-Hillside) said African-Americans and women deserve to have a voice in corporate America, which he said they are not getting now, according to the same report.

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Organizations in this Story

Illinois General Assembly Illinois Manufacturers Association.

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