A Golden Light on Corporate Behavior

Originally Published MX March/April 2003

GOVERNMENTAL & LEGAL AFFAIRS

California's recently implemented legislation on corporate disclosures may be the harbinger of more state legislation to come.

Ian D. Smith

In the wake of the U.S. government's enactment of the Sarbanes-Oxley Act of 2002, the State of California has followed with its own legislation regarding corporate disclosures (see sidebar).¹ Last September, Governor Gray Davis signed into law the California Corporate Disclosure Act, which imposes new disclosure requirements on publicly traded corporations incorporated or qualified to do business in California.²

Under the act, publicly traded corporations will be required to disclose specified information about their auditors, their directors and officers, and certain historical events. Such disclosures are in addition to the information that companies are already required to file with the California secretary of state. The act also requires that the California secretary of state make all filed information publicly available through an on-line database. The act became effective January 1, 2003.

Rapid Enactment