When Google released employees’ demographic data recently, it revealed just how white and male the tech company is. On the other hand, Google has something a lot of companies don’t: three women on its 10-person board.
Research has been mounting for a while that board diversity actually makes a difference to corporations’ bottom lines. Still, most firms aren’t in any rush to change the status quo. One recent study says parity in the boardroom will arrive in 2042.
Malli Gero hopes it will come a lot faster. For the last few years, she’s been keeping tabs on how many female board members companies have. Gero is co-founder of the nonprofit 2020 Women on Boards. She says some top companies have women in 20 percent or more of board seats. But most are far below that number. She says the most successful companies can afford to hire search firms to find good female candidates, but others turn to their existing network.
“Most of the male CEOs know men like themselves, and those are the people they rely on,” Gero says.
And that’s how the cycle of men on boards continues.
It’s a cycle large investment funds like Calpers are trying to break.
Anne Simpson is senior portfolio manager at Calpers, California’s employee pension fund. This spring, it worked with a few other large funds to bring a shareholder resolution against Urban Outfitters. Calpers pressed the fashion retailer to put more women and minorities in its boardroom. Urban Outfitters’ main market? Young women.
“Until last year this was a company that had an all-male board, mostly over 60 years old,” says Simpson. “And for us, this really isn’t a board which has the range of diverse experience and talent to really secure the company for the long term.”
Last year, after a previous shareholder resolution, Urban Outfitters agreed to put a woman on its board. Simpson says initially fund managers were delighted. Then they discovered Urban Outfitters had chosen the wife of its CEO, herself a fashion executive. The company, she says, made no effort to look further afield.
Technology executive Heidi Roizen is trying to encourage companies to do just that. Whenever she hears a CEO say he can’t find any good women, she whips out her list of qualified candidates.
“I joke about having binders of women,” says Roizen. “I have more binders of women than Mitt Romney.”
Roizen is a partner at Silicon Valley venture capital firm DFJ. She has served on more than 30 boards during the last two decades. And it can be a little lonely. She’s on several boards at the moment, including Tivo’s, and she’s the only woman on most of them.
It’s not surprising she’s in such demand. A recent study found women and minorities are far likelier than white men to be on lots of boards at once.
Anne Simpson of Calpers says that’s because companies are still nervous about working with lesser-known candidates. They stick with women they know are good. Calpers wants companies to limit the time board members can spend on the job so new people have a chance to step in. Otherwise, Simpson says, “We won’t achieve diversity in my lifetime.”
As for Calpers’ effort to get Urban Outfitters to put more women and minorities on the board — it failed. Most shareholders voted no. Malli Gero says shareholders worry about rocking the boat. But she says there’s another reason things don’t change: apathy.
“Most stockholders don’t even vote their proxies,” she says. “In fact they don’t even open those envelopes to look at the board compositions or to see what resolutions are up and need voting on.”
Gero says if you care about who is making the decisions at companies you have a stake in – the first step is to open that envelope. Then vote.
Ashley Milne-Tyte is the host of a podcast on women and the workplace called The Broad Experience.