Women on Boards

IPOs Getting on the Diversity Bandwagon?

Last week it was Box Inc. and this week Shake Shack. Both companies launched IPOs with women on their boards. Box, the newest in file sharing platforms, went public as a Winning 'W' Company, with two of its ten directors women. Shake Shack, the hip, roadside burger joint coming to all neighborhoods soon, went public with just one woman on its board. It’s a 2020 Token 'T' Company.
 
We're happy to see companies take our advice (Needed: IPO Checklist that Includes Women) by putting their board in order before they go public, and not scramble to do the right thing after their IPO. But, we want our burgers and eat them too. So don’t stop now, Shake Shack. Put another woman on your board and join the ranks of Winning 'W' Companies. Your stakeholders will thank you!

Eureka! Urban Outfitters becomes a W Company!

Urban Outfitters (NASDAQ:URBN) heeded the call of shareholder activists and named Elizabeth Ann Lambert to its board of directors on December 22. Lambert, principal and manager of Bunkhouse Group, LLC, became the second woman director on Urban’s board, after the appointment of Margaret Hayne, president of Free People, Urban's chief creative officer and wife of CEO Richard Hayne in 2013. Women now hold 25% of Urban Outfitters' board seats. Investors are hailing the news.
 
At the Urban Outfitters' annual meeting on May 27, Mr. Hayne thumbed his nose at a shareholder resolution that called on the company to add female and minority directors. The proposal was sponsored by Thomas DiNapoli, Comptroller for the State of New York on behalf of the New York State Common Retirement Fund and Denise Nappier, CT State Treasurer, on behalf of the Connecticut Retirement Plans and Trust Funds.
 
In 2013 Mr. Hayne urged shareholders to reject diversity proposals on the grounds that imposing gender and minority requirements would "undermine the company's holistic evaluation of candidates," reported Gretchen Morgenson in her article "Shareholders Are Speaking Up, But Who's Listening?
 
Well, it appears that Mr. Hayne was listening, and we hope that other T and Z companies (those with one or no women) will follow Urban Outfitters lead.

How to Diversify Without Really Complying

In 2010 the US Securities and Exchange Commission implemented a measure to ensure companies disclose information about how they consider diversity when they pick board members.  The rule did not define diversity as meaning gender or race.   Therefore, as per this NY Times blog post, we now have companies “interpreting diversity as having a varied background or experience.”
 
With so many studies documenting the advantage of a gender diverse board, companies would be far better off undertaking a stretch of their boards, rather than simply extending the definition of diversity.

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