WE RECOGNIZE

A balanced world is a better world.

CURRENT STATE OF WOMEN ON BOARDS

A long way to go

  • 2021 STUDY OF GENDER DIVERSITY ON PRIVATE COMPANY BOARDS

    Key Findings

    • Women hold 14 percent of board seats among the companies studied, up from 11 percent in 2020 and 7 percent in 2019.

    • Nearly 40 percent of companies don’t have any women on their board, an improvement from roughly half of the companies in our 2020 study and 60 percent in 2019.

    • Only 3 percent of all directors are women of color, reflecting no significant change from the prior year.

    • More than three quarters of company boards (78 percent) do not include a single woman of color.

    • Women are most likely to occupy an independent director seat (56 percent), as compared with an investor director (31 percent) or executive director (13 percent) seat.

    • Investor directors now hold less than half of board seats (48 percent, down from 56 percent in 2019), as independent directors command a larger board footprint (29 percent, up from 20 percent in 2019).

    • Life sciences companies outperform technology companies on board-diversity metrics.

  • WOMEN LEADING BOARDS APRIL 2022 SPECIAL REPORT – IN PARTNERSHIP WITH 50/50 WOMEN ON BOARDS™

    March 2022

    • Board seats held by women in 2021: 27%

    • First-time appointees to corporate boards as of February 2022: 58%

    • # of years it will take to reach parity at the current rate of change: 8

  • WOMEN ON CORPORATE BOARDS

    November 2021

WHY COMPANIES SHOULD WANT DIVERSITY IN THE BOARDROOM

The economic case for diversity is real!

  • DIVERSITY WINS: HOW INCLUSION MATTERS

    May 2020

    "The business case for inclusion and diversity (I&D) is stronger than ever. For diverse companies, the likelihood of outperforming industry peers on profitability has increased over time, while the penalties are getting steeper for those lacking diversity."

    WHY DIVERSITY MATTERS

    "Companies in the top quartile for gender diversity are 15 percent more likely to have financial returns above their respective national industry medians."

  • THE OTHER DIVERSITY DIVIDEND

    "Researchers have struggled to establish a causal relationship between diversity and financial performance—especially at large companies, where decision rights and incentives can be murky, and the effects of any given choice can be tough to pin down. So the authors chose a “lab rat” with fewer barriers to understanding: the venture capital industry.

    VC firms are fairly flat: Every investor is a decision maker, and choices have clear business consequences. Using publicly available information, researchers can see how similar or different decision makers are and compare decision quality on the basis of investments’ performance.

    After examining tens of thousands of VC investments, Gompers has found that diversity significantly improves financial performance on measures such as profitable investments at the individual portfolio-company level and overall fund returns. And even though associating with similar people can have social benefits for people who do so, it can lead investors and firms to leave a lot of money on the table.

    In this article Gompers and Kovvali describe the research and provide recommendations for reaping the business benefits of diversity."

    RESEARCH: ADDING WOMEN TO THE C-SUITE CHANGES HOW COMPANIES THINK

    "In this piece, the authors share new research that explores exactly how the addition of female executives shifts companies’ strategic approach to innovation. Based on an analysis of more than 150 companies, the authors find that after women join the top management team, firms become more open to change and less open to risk, and they tend to shift from an M&A-focused strategy to more investment into internal R&D. In other words, when women join the C-suite, they don’t just bring new perspectives — they actually shift how the C-suite thinks about innovation, ultimately enabling these firms to consider a wider variety of strategies for creating value."

    • "Researchers have struggled to establish a causal relationship between diversity and financial performance—especially at large companies, where decision rights and incentives can be murky, and the effects of any given choice can be tough to pin down. So the authors chose a “lab rat” with fewer barriers to understanding: the venture capital industry.

    • VC firms are fairly flat: Every investor is a decision maker, and choices have clear business consequences. Using publicly available information, researchers can see how similar or different decision makers are and compare decision quality on the basis of investments’ performance.

    • After examining tens of thousands of VC investments, Gompers has found that diversity significantly improves financial performance on measures such as profitable investments at the individual portfolio-company level and overall fund returns. And even though associating with similar people can have social benefits for people who do so, it can lead investors and firms to leave a lot of money on the table.

    • In this article Gompers and Kovvali describe the research and provide recommendations for reaping the business benefits of diversity."

    RESEARCH: ADDING WOMEN TO THE C-SUITE CHANGES HOW COMPANIES THINK

    • "In this piece, the authors share new research that explores exactly how the addition of female executives shifts companies’ strategic approach to innovation. Based on an analysis of more than 150 companies, the authors find that after women join the top management team, firms become more open to change and less open to risk, and they tend to shift from an M&A-focused strategy to more investment into internal R&D. In other words, when women join the C-suite, they don’t just bring new perspectives — they actually shift how the C-suite thinks about innovation, ultimately enabling these firms to consider a wider variety of strategies for creating value."

  • WHITE PAPER: THE CASE FOR DIVERSITY IN BUSINESS, VENTURE CAPITAL, AND INNOVATION INVESTING

    REPORT: WOMEN-OWNED STARTUPS DELIVER TWICE AS MUCH PER DOLLAR INVESTED AS THOSE FOUNDED BY MEN

    "...startups founded and cofounded by women are significantly better financial investments. For every dollar of funding, these startups generated 78 cents, while male-founded startups generated less than half that—just 31 cents."

  • Kauffman Fellows

    DECONSTRUCTING THE PIPELINE MYTH AND THE CASE FOR MORE DIVERSE FUND MANAGERS

    "Diverse Founding Teams have higher returns when cash is returned to investors. Historically, they have earned a 3.26x median realized multiple on IPOs and acquisitions, compared to a 2.50x realized multiple for White Founding Teams, a 30% increase."

    SGC Ventures

    RESOURCES – SGC VENTURES

    “Venture capital firms that increased their proportion of female partner hires by 10% saw, on average, a 1.5% spike in overall fund returns each year and had 9.7% more profitable exits (an impressive figure given that only 28.8% of all VC investments have a profitable exit).”

    Boston Consulting Group

    HOW DIVERSE LEADERSHIP TEAMS BOOST INNOVATION

    "In both developing and developed economies, companies with above-average diversity on their leadership teams report a greater payoff from innovation and higher EBIT margins."

WHY WOMEN SHOULD CARE ABOUT GETTING ON BOARDS

Tangible benefits & a powerful investment in yourself

    • Advisory Boards are an excellent way to get started! Be able to leverage board seats at smaller startups for ones at larger and larger companies as you gain experience and as the startup grows.

    • Avoid being turned down for board seats at large private or public companies for lack of experience.

    • Earn equity and/or invest in the startup you are advising.

    • Get involved in the entrepreneurial ecosystem.

    • Position yourself to be chosen for the governing board of the startup you are advising.

    • Personal brand building as a strategic thought leader.

    • Access to “Board Networks” which are different than professional networks which will lead to more opportunity.

    • Many of the same tangible benefits that apply to advisory boards apply to governing boards.  Governing board service provides access to “Board Networks” which are different than professional networks which will lead to more opportunity; you can use the experience to build your own personal brand as a thought leader, and it will help you be seen as a strategic leader rather than an operational one.  

    • It is also an excellent opportunity to sharpen leadership skills.

    • Earn equity, investment opportunities, and income:  Fiduciary boards tend to come with higher compensation, so a governing board opportunity is an excellent way to supplement your earning power.  

The tide is turning- don't get left behind!

  • NASDAQ TO ADVANCE DIVERSITY THROUGH NEW PROPOSED LISTING REQUIREMENTS

    "...the new listing rules would require all companies listed on Nasdaq’s U.S. exchange to publicly disclose consistent, transparent diversity statistics regarding their board of directors. Additionally, the rules would require most Nasdaq-listed companies to have, or explain why they do not have, at least two diverse directors, including one who self-identifies as female and one who self-identifies as either an underrepresented minority1 or LGBTQ+. Foreign companies and smaller reporting companies would have additional flexibility in satisfying this requirement with two female directors."

  • STATEMENT ON NASDAQ'S DIVERSITY PROPOSALS – A POSITIVE FIRST STEP FOR INVESTORS

    Aug. 6, 2021 "Today, the Commission approved Nasdaq Stock Market LLC’s proposed rule changes related to board diversity and disclosure.[1] The new listing standards will require each Nasdaq-listed company, subject to certain exceptions, to have at least two diverse board members or explain why it does not.[2] The new listing standards also will require disclosure, in an aggregated form, of information on the voluntary self-identified gender, racial characteristics, and LGBTQ+ status of the company’s board.[3] We support the proposal because it represents a step forward for investors on board diversity."

  • GOLDMAN SACHS’ COMMITMENT TO BOARD DIVERSITY

    "Effective July 1, Goldman Sachs will only underwrite IPOs in the US and Europe of private companies that have at least one diverse board member. And starting in 2021, we will raise this target to two diverse candidates for each of our IPO clients."