News & Analysis as of

Board of Directors Directors California

Allen Matkins

Is A Notitia Congregationis Valid In California?

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California is a very linguistically diverse state with an estimated 200 plus different languages being spoken.  Within my own family, English is not the primary language spoken at home by any of my grandchildren.  Yet, the...more

Allen Matkins

Directors Removing Directors

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Seven years ago, I addressed the question of whether the board of directors of a California corporation could remove a fellow director...more

Allen Matkins

For How Long Is That Proxy Valid?

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Section 705(a) of the California Corporations Code provides that no proxy is valid after the expiration of 11 months from the date thereof unless otherwise provided in the proxy.  This is a reflection of the fact that proxies...more

Allen Matkins

Can The California Attorney General Enforce The Inspection Rights Of Stockholders And Directors Of Delaware Corporations?

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The California General Corporation Law expectedly grants inspection rights to shareholders and directors of California corporations.  Unexpectedly (at least to practitioners outside California), the GCL extends those rights...more

Allen Matkins

Is It Possible That Some Possibilities Are Unreasonable?

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Section 5342(e) of the California Corporations Code requires a nonprofit public benefit corporation to provide, upon the request of a member, to either allow inspection and copying of all members' names, addresses or voting...more

Allen Matkins

California Says Corporations And LLCs Can't Be Directors; The Securities Exchange Act Apparently Believes Otherwise

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Nine years ago, I posed the question of whether the California General Corporation Law permits corporations to serve as directors.  My answer at the time was "no" because Section 164 of the Corporations Code defines...more

Allen Matkins

May Directors Vote By Proxy?

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Neither California's nor Delaware's General Corporation Law expressly prohibits directors from being represented by proxy at board meetings.   However, it appears to have been well settled in Delaware since at least 1915 that...more

Allen Matkins

When Cumulative Voting Precludes Election Of Directors By Ballot

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The California Nonprofit Mutual Benefit Corporation Law contemplates three different methods for members to take action: at a meeting, by ballot, and by unanimous written consent.  Cal. Corp. Code §§ 7512(a), 7513 & 7516. ...more

Allen Matkins

Are Directors Employees And Are Their Homes Their "Workplaces"?

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There are potentially a number of ramifications to classifying a board member as employee, including whether the corporation may be entitled to obtain a workplace violence restraining order petition pursuant to Section 527.8...more

Allen Matkins

What Are The Duties Of Directors In Electing, Selecting, Or Nominating Directors?

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Section 309 of the California Corporations Code specifies the standard of performance applicable to directors in performing their duties as directors of corporations organized under the California General Corporation Law. ...more

Allen Matkins

Discerning When A Director Has Acted With "Reckless Disregard"

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Section 204(a)(10) of the California Corporations Code permits the articles of incorporation to include provisions eliminating or limiting the personal liability of a director for monetary damages in an action brought by or...more

Allen Matkins

What Can Be Done If You Believe That You Were Improperly Appointed An Officer Or Director

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On occasion, someone might perceive that they have been improperly  appointed as a director or officer of a corporation.  If this unfortunate circumstance occur, is there any mechanism for publicly disclaiming the...more

Allen Matkins

A Corporation Is A Body But Also An "Individual"

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Several years ago, I wrote about the various meanings of "person" in the California Corporations Code.  All of the definitions mentioned in that post included corporations within the list of persons.  If a corporation is a...more

Allen Matkins

Court Of Appeal Declines To "Sit On" Board Diversity Judgment

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In July, California Secretary of State Shirley Weber filed a petition for a writ of supersedeas in the California Court of Appeal with respect to the trial court's judgment in Crest v. Padilla.  In that case, the trial court...more

Allen Matkins

What's Justice And Reasonableness Got To Do, Got To Do With It?

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Section 310 of the California Corporations Code concerns two different types of contracts or transactions.  The first concerns a contract or other transaction between the corporation and one or more of its directors, or...more

Allen Matkins

Must A Nonprofit Abnegate Private Gain?

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The California Corporations Code includes provisions governing a wide variety of nonprofit organizations.  However, the "Big 3" categories of nonprofit corporations are the public benefit, mutual benefit and religious...more

Allen Matkins

A First Sighting Of Zuckerberg Decision In California

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Last year, the Delaware Supreme Court adopted a tripartite test for assessing demand futility allegations in derivative actions. United Food & Commercial Workers Union v. Zuckerberg 262 A.3d 1034 (Del. 2021). Under this...more

Allen Matkins

This California Statute Deems Directors To Be Omniscient

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California Corporations Code Section 22003 effectively deems directors to be all-knowing...more

Allen Matkins

Don't Go Out On A Limb And Seek Enforcement Of These Voting Agreements

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California has multiple types of nonprofit corporations.  The "Big Three" are the public benefit corporation, mutual benefit corporation and religious corporation.  The statutes applicable to these three entities are similar...more

Allen Matkins

For These Directors, There May Be No Way Out

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The California General Corporation Law provides that any director may resign effective upon giving notice to certain specified persons, unless the notice specifies a later time for the effectiveness of his or her...more

Allen Matkins

May A Director Properly Rely On Her Rabbi?

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In prescribing the duties of directors, California Corporations Code Section 309 provides that a director is entitled to rely on information, opinions, reports or statements prepared or presented by "counsel, independent...more

Allen Matkins

Does Improving CalPERS' Returns Justify State Mandated Discrimination?

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We may learn as early as today whether a pending constitutional challenge to AB 979 will be going to trial in May.  AB 979 is California's law requiring publicly held domestic and foreign corporations having their principal...more

Allen Matkins

Legislator Proposes To Expand Definition of "Director From An Underrepresented Community"

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Enacted in 2020, AB 979 requires publicly held domestic or foreign corporations having their principal executive offices in California to have specified minimum numbers of directors from "underrepresented communities".  Cal....more

Allen Matkins

When A Director Is Unfit For Duty

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The California General Corporation Law includes two provisions providing relief when a director is incompetent and/or felonious.  Section 302 of the Corporations Code permits the board of directors to declare vacant the...more

Allen Matkins

Ten Years Go By Without The DOJ Receiving Even One Of These Notices

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In wake of the Sarbanes-Oxley Act, the California legislature saw fit to add Section 2207 to the California Corporations Code.  The statute threatens corporations with a $1 million civil penalty if they have actual knowledge...more

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