Tech's Urgent Quest for Women Directors -- Journal Report
09 Novembre 2018 - 7:24PM
Dow Jones News
By Yoree Koh
In Silicon Valley, having a woman in the boardroom has become a
must -- literally.
A California law passed in September mandates that all publicly
held companies with headquarters in the state have at least one
female board member by the end of 2019, which has set off a
scramble for candidates. Some companies with one female director
will need to add one or two more, because the law also requires
that by 2021, publicly held firms with at least five directors have
two or three female directors or risk financial penalties.
Some companies that may fall into the latter category are
Facebook Inc. and Google parent Alphabet Inc. Both will need to add
a third female director within a few years since their boards have
more than six directors. The companies declined to comment.
Of the 459 publicly held companies in the Russell 3000 Index
that have headquarters in California, 16% are fully compliant with
the law, meaning companies with five board members have at least
two female directors, or companies with six or more board members
have at least three female directors, according to Equilar, a
research firm that tracks data on executives and boards. Narrowing
the field to only the tech industry reveals a slightly worse
picture: Just 13% of the 140 tech companies in the index are in
full compliance with the law today.
While the law doesn't directly affect privately held companies,
it puts pressure on startups that aspire to one day go public.
Among the 139 U.S.-based startups that are valued at $1 billion or
more and that have board data available, 88 didn't have any women
on their boards as of Oct. 15, according to data from PitchBook. Of
the 90 of these startups based in California, 59 didn't have any
women on their boards.
Familiar names
Studies have shown that increasing diversity in a company's top
ranks leads to better business performance. The problem, according
to recruiters and search executives, is that a lot of tech firms
put former Hewlett Packard Chief Executive Meg Whitman and Facebook
Chief Operating Officer Sheryl Sandberg at the top of their lists
of potential directors -- but don't have many other candidates in
mind.
The California law is already having an impact on publicly
traded companies. TheBoardlist, an online marketplace for companies
to find qualified female candidates for board seats, says it saw a
70% increase in inquiries from August to September, about twice the
marketplace's usual search volume for that period. TheBoardlist CEO
Shannon Gordon says a board search typically takes about nine
months, leaving little time before the California law goes into
effect at the end of next year.
Jana Rich, founder of San Francisco-based executive-search firm
Rich Talent Group, says in the past month she has had about 10
requests from publicly traded companies in California for board
searches across different industries, which she says is more than
usual.
"There's been a huge influx of interest -- that's the 'Oh shoot'
moment" where companies are suddenly thinking, " 'I've got to focus
on it and I've got to focus on it now,' " says Ms. Rich.
The law's passage has spurred Shannon Grant, an angel investor
and founder of San Francisco-based Deus Capital, to help organize
informational dinners for women who are interested in joining
boards of public companies. The first dinner, later this month,
will be hosted by venture-capital firm Kleiner Perkins, according
to a partner at the firm, and will feature a woman who has served
on several public-company boards and other women who are directors
and senior directors at tech companies. Sponsoring the dinner ties
into Kleiner Perkins's work on diversifying the executive teams and
boards of its portfolio companies, says Tylee Potter, a talent
partner at Kleiner Perkins.
'Token' avoidance
One challenge in recruiting women, says Ms. Rich, the
executive-search -firm founder, is that some are wary of becoming
the first female on a board and appearing to be a "token"
appointment. She says female candidates often look for signs that a
company is truly committed to adding diverse perspectives.
Katie Stanton initially had reservations when she was asked to
interview to join Vivendi SA's board in 2014, when she was working
in Paris as Twitter's head of international growth. According to
Ms. Stanton, the recruiter told her that she was reaching out
because of a 2011 French law that required all large companies to
fill 40% of board seats with women by 2017.
"My first reaction was, quite frankly, sadness, because based on
what the recruiter said, it appeared I might only be considered for
a board role because of the need to meet the new rule," says Ms.
Stanton, who is now the chief marketing officer of Color
Genomics.
But she says gender never came up during her interviews with
fellow board members. Instead, they asked about her background in
Silicon Valley, about partnerships and how to steer some of their
businesses such as the Universal Music Group into streaming. She
ultimately joined the board as the second woman. Vivendi's
12-person supervisory board now has six women.
"I never felt different, with the exception of language," Ms.
Stanton says.
Ms. Koh is a Wall Street Journal reporter based in San
Francisco. She can be reached at yoree.koh@wsj.com.
(END) Dow Jones Newswires
November 09, 2018 13:09 ET (18:09 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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