Newsom signs bill mandating diversity reporting in venture capital, vetoes similar bill aimed at his office

Democratic California Gov. Gavin Newsom vetoed a bill on Oct. 8 requiring the governor’s office to report the ethnic breakdown of its appointees the same day he signed a bill requiring that venture capital firms report the racial and sexual diversity of companies they invest in, according to statements released by the governor.

Newsom said that California Senate Bill 54, which requires venture capitalists to produce annual diversity reports, “resonates deeply with my commitment to advance equity and provide for greater economic empowerment of historically underrepresented communities.”

Newsom was less warm toward diversity reporting for his own office as proposed in Senate Bill 702, saying in his veto statement that self-reporting was sufficient for demographic information for the governor’s appointees.

The National Venture Capital Association (NVCA) in a letter to state Sen. Nancy Skinner, the author of Senate Bill 54, says that it already conducts its own diversity surveys on the venture capital industry.

Under SB 54, venture capital firms will be required to report the gender identity, race, ethnicity and “LGBTQ+” identity of each member of the founding team of start-ups they invest in, according to the bill’s text.

Newsom said subjecting him to the diversity reporting mandated in Senate Bill 702 “would not necessarily accurately reflect the diversity of appointees.” He did not raise similar concerns in his signing statement on the bill requiring diversity reports from venture capital firms.

The NVCA opposed diversity reporting requirements for a similar reason Newsom opposed the requirements for the governor’s office. Mandated reports would “produce misleading and counterproductive data,” according to the letter sent by the NVCA.

Democratic state Sen. Monique Limón, the author of SB 702, has been trying to push diversity reporting on the governor’s office for the last three years, according to Cal Matters.

“We believe that this administration has taken strides to diversify our statewide appointees, but more needs to be done to ensure we have mechanisms in place long after this administration is gone,” Limón told Cal Matters.

Newsom said that mandating diversity reports from venture capital firms “could present barriers to successful implementation and enforcement” as the state’s Civil Rights Department is ill-equipped to investigate diversity reports, though approved the bill anyway.

The governor’s office did not respond to the Daily Caller News Foundation’s request for comment.

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