Amid Rapid Change, Tech Boardrooms Remain Filled With Men

By Marissa Lang
San Francisco Chronicle

WWR Article Summary (tl;dr)  When it comes to women in the boardroom, the needle is moving very slowly, if at all. In tech company boardrooms, women make up just 18.3 percent of directors in the S&P 500. Fortunately there are groups like “2020 Women On Boards,” and “Women2Boards” which are focused on empowering women to gain access to corporate boardrooms. 

San Francisco Chronicle

The opportunity was there: vacant board seats, a call for more directors.

Yet in several recent shakeups at Bay Area tech firms — from giants like Yahoo and numerous startups where venture capital firm Sequoia Capital has a seat — no one took the opportunity to appoint a woman to the board of directors. On many of those boards — and hundreds of others from San Francisco to San Jose and beyond — every seat is held by a man.

This failing is not unusual, industry experts said, and points to a bigger issue in the tech industry: Women are sorely underrepresented in boardrooms.

Women make up more than 18 percent of board members at Fortune 1000 companies and at the 72 tech firms included in the Standard & Poor’s 500 index, though they make up about half of the population. For women of color, that number shrinks to about 3 percent. Five tech companies in the S&P 500 have no women on their boards at all.

“The ultimate destination is parity, but we have to have milestones and goals along the way, and I would certainly put at baseline no more companies should have zero women on their boards,” said Brande Stellings, vice president of corporate board services at nonprofit workplace research group Catalyst. “Come on. It’s the 21st century.”

Yahoo, whose embattled chief executive Marissa Mayer is one of four women on its nine-person board, has had a higher than usual percentage of female board members. In the next two months, after a deal with activist investor Starboard Value, Yahoo’s board will transform, adding four new directors and losing two who will not seek re-election at the company’s shareholder meeting in June.

Of the four new directors appointed to Yahoo’s board, none is female. One of the outgoing members is a woman. That puts Yahoo at 27 percent — above average, but a big step back from where it was. Yahoo declined to comment on the composition of its board.

Parity is ultimate goal
“There is a danger in companies thinking, OK, we have women now, so we’re done,” Stellings said. “Companies should all have a goal of about 30 percent, but that is by no means a stopping point. It’s just a stop along the way to eventual parity.”

In the ongoing conversation about diversity and the tech industry, putting women on boards can feel like a catch-22, said Nancy Sheppard, founder and CEO of Women2Boards, a nonprofit that helps women gain access to corporate boardrooms.

Board members are typically culled from specific areas, including C-level leadership positions and venture capital firms, where women are similarly underrepresented.

Less than a third of venture capital firms in the United States employ at least one woman to conduct business or participate in investment decisions, according to a Page Mill Publishing study issued last year that underscored a long-standing problem with the VC industry’s diversity.

Babson College’s Diana Project estimated in 2014 that 6 percent of venture capitalists are women, down from 10 percent in 1999.

“The venture community doesn’t include very many women in their ranks, and because of that it gets to be very clubby and it functions like a club that’s not open membership,” said Malli Gero, co-founder and president of 2020 Women On Boards, a nonprofit group that uses grassroots organizing to pressure companies to diversify their boards of directors. “You’re beginning to see more women in venture, just like you’re beginning to see more women on boards, but it’s a very slow process.”

In tech company boardrooms, women made up 18.3 percent of directors in the S&P 500, according to a study released last year by research firm Equilar.

It’s a notable increase from 2010, when 2020 Women on Boards found about 14 percent of board seats were occupied by a female director, Gero said, but new research shows that the number of women serving on boards has plateaued.

Of all the newly elected directors at S&P 500 companies, about 31 percent of those elected last year were female, according to financial research firm Spencer Stuart. The year before, it was 30 percent.

‘Diversifying is hard’
“Change is hard, especially because when you have a group of people who look and think just like you do, that’s comfortable, that’s easy,” Gero said. “Diversifying is hard, it’s uncomfortable, but the payoff is so much greater. Diverse boards make better decisions, the companies are more profitable. That’s more important than the comfort of a CEO.”

Venture capital firm Sequoia Capital, which has backed Silicon Valley giants like Apple, Cisco, Google and Yahoo, had to fill nearly a dozen board seats left vacant by longtime venture capitalist Michael Goguen, who resigned his position at Sequoia last month amid allegations that he had sexually and physically abused a woman for 13 years and then reneged on an agreement to pay her $40 million for her suffering and discretion. (Goguen denied the allegations.)

Goguen served on the boards of at least 10 companies, including publicly traded firm Infoblox and online lender Elevate Credit, which was widely expected to go public but postponed its offering in January.

Infoblox, a network management firm, has one woman on its seven-person board. Elevate has none.

Sequoia, whose U.S. arm is one of hundreds of American VC firms that have no female investing partners, is not obligated to appoint a partner to a board seat it occupies. It could look externally for candidates and ask them to serve as a representative.

The VC firm instead redistributed Goguen’s portfolio among existing partners, it said. Sequoia declined to expand on its reasons for doing so. The firm’s most recent hire, Mike Vernal, formerly worked at Facebook as a top technical executive.

In an interview last year with Bloomberg, Sequoia Chairman Michael Moritz said the firm would consider hiring women — so long as doing so didn’t require it to “lower our standards.” He subsequently sought to clarify his remarks, which drew strong condemnation from others in the industry. Chamath Palihapitiya, co-founder of the Social + Capital Partnership, dubbed his remarks “ridiculous” and a “sign and language of the past.”

Reluctant to apply
Sheppard, who tends to work with smaller companies seeking directors for their boards, said executives can be reluctant to prioritize diversity because there is a perception that doing so means putting less of a premium on other factors like experience.

Qualified women, meanwhile, might not think to apply for an opening.

“I talk to a lot of women who are interested in being on boards and the skill sets are amazing, but they don’t think about connecting up to ask about being on boards,” she said. “They hear the stories about how hard it is and think there aren’t that many opportunities or that they won’t be picked. Some just hadn’t even thought of taking their career in that direction.”

One area where Sheppard has seen substantial progress is in companies’ willingness to talk about diversity and recognize their own pitfalls.

Public accountability and peer pressure can be important drivers in increasing the rate of women and people of color appointed to boards, experts said.

In 2012, Facebook went public with no women on its board. Nonprofits and shareholders called on chief executive Mark Zuckerberg to appoint a woman. He eventually appointed Chief Operating Officer Sheryl Sandberg, who already served on the board of the Walt Disney Co., a month after the IPO.

Today, Facebook has two female directors on its board of eight, a figure that has not changed in three years.

Twitter, whose chief executive and co-founder Jack Dorsey has been vocal in his desire to diversify the social media company’s board, appointed its second woman, Martha Lane Fox, to its board earlier this year. Dorsey has since tweeted that more additions will follow, “ones that will bring diversity and represent the strong communities on Twitter.”


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