gender diversity

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.

 

Mad Men

Last fall it sure looked like we were closing the year on a high. Our 2016 Gender Diversity Index showed we were within a hair’s reach of achieving our goal of women holding 20% or more corporate boards seats. We looked forward to our 5th Annual National Conversation on Board Diversity, where a record breaking 2500 people registered to attend events in cities across the country to hear about women’s progress in the boardroom. We were poised to make history by electing the first woman president.
 
We all know what happened. As the inauguration approaches and confirmation hearings begin, those who will govern us are beginning to look like they belong in the hit show Mad Men: stale, pale and male. Four female appointments have been named to the cabinet, Nikki Hailey, Ambassador to the UN, Betsy DeVos, Education Secretary, Linda McMahon, Small Business Administration and Elaine Chao, Transportation.
 
It’s easy in this “I can’t believe it happened” moment to forget some of the progress we’ve made. According to our 2016 Gender Diversity Index, women hold 19.7% of the board seats in Fortune 1000 companies. Women had a net gain of 74 board seats in 2016 compared with a net loss of 71 seats for men. One hundred and twenty companies added women to their board last year, and of those 70 did so by increasing the size of their board to accommodate women rather than waiting for a man to step down.
 

Fitbit Not Fit for Women

Fitbit, the colorful bracelet seen on the wrists of the fit and wanna-be fit, is not fit for women. The company that is dedicated to health and fitness of the masses is going public with no women on its five-member board – another technology company taking the lead from its male investors. We say it’s time that the VC community pay attention to stakeholders who want to see the boards of companies where they work, shop and invest reflect the population, more than half of which is women.
 
Of the ten biggest tech IPOs of 2015 (Wall Street Journal, 6/17) three are Zero 'Z' Companies with no women directors (Black Knight Financial Services, Shopify and Apigee) and five are Token 'T' Companies with one woman director (Innovation Holdings, GoDaddy, Evolent Health, Baozun and MaxPoint Interactive). Two of the companies are Winning 'W' Companies, with 20% or more board seats held by women (Etsy and Box).
 
We all know that women make up a huge number of Fitbit customers - maybe the majority. The same can be said of most of the companies on the 2015 technology IPO list. To imply that there are no women qualified to serve on the Fitbit board is ludicrous. At best it's a gross oversight. At worst, it's discrimination, plain and simple. Discriminating against your customer base is just bad business.
 
We implore Fitbit to put women on its board.

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