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Women: Not Present on IPO Company Boards

For years we have heard that men largely populate the boards of IPO companies. We decided to test that precept. 2020 Women on Boards looked at the gender composition of the boards of directors for the 25 largest IPOs[1] in 2014, 2015, and 2016 and the results are worse than expected. It is widely accepted that IPO company boards are populated by venture capital appointees who are mostly white men, but we hoped that at the point of going public, companies would recognize that board diversity is essential to success. Not so. Of the 75 largest IPOs from 2014 to 2016, nearly half, or 37 companies, went public with no women on their boards. Another 25%, or 19 companies, had only one woman. In other words, between 2014-2016, three fourths of companies with the largest IPOs went public with one or no women on their boards.

 

The optimists among us might assume that these companies would correct this judgement error in the first year or two of operating in the public eye—and in fact, several of them did. The number of Zero ‘Z’ Companies with no women on their boards dropped from 37 to 22, or 30%, and the number of Token ‘T’ Companies with one (token) woman rose from 19 to 27, or 37%, as ‘Z’ companies added a woman. Additionally, two all-male IPO companies that failed to diversify were no longer trading by May 2017. Nevertheless, even after a year or two of being public, two thirds of the companies still had one or no female directors.

 

Every year 2020 Women on Boards publishes the Gender Diversity Index (GDI). In 2016, the percentage of women on the boards of GDI companies rose to 19.7% and the percentage of women on the 2016 Fortune 1000 list was 18.8%. When we compare this progress to the recent IPOs where the percentage of women on these boards is 9.4%, we see how far we need to go.

 

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