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2019 Study of Gender Diversity In Private Company Boardrooms

Executives and investors compose 80 percent of director seats, of which fewer than 5 percent are held by women

Our hope is that this study will bring attention to the need to engage more women in board service, that it will inspire CEOs and board members to seek candidates beyond their personal networks and challenge the assumptions that reinforce the status quo, and that it will serve as a baseline for tracking future progress.

In this benchmark study, we analyzed the board composition of 200 of the most heavily funded U.S.-based private venture-backed companies to understand how they fare when it comes to gender diversity in the boardroom.

Of the 200 companies studied — each backed with close to $100 million or more in funding and founded since 2004, or valued over $500 million — 60 percent (121) did not have a single female board member.

Of the 39.5 percent of companies studied that had at least one female board member, 76 percent had only a single woman director.

CEOs, co-founders and any members of the management team who hold board seats are considered executive directors.

Executive directors make up 24 percent of the board seats within the companies studied.

Within the study data, investor directors make up the largest pool of board members for venture-backed companies, with 56 percent of seats.

With 20 percent of the seats among the private companies studied, independents make up the smallest cohort.

Of all of the board seats held by women, half were independents, 36 percent were investors, and 14 percent were executive directors.

These extreme gender skews carry through to the boardroom where 80 percent of seats are held by executives and investors and fewer than 5 percent of those are held by women.

Based on the gender composition of the venture-capital industry, one might expect men to outnumber women in investor director seats by a ratio of 10 to 1.

When looking to fill a director seat, only 39 percent of public companies utilize executive search firms.

7 Instead, nearly half of these public companies rely on personal networks or recommendations from other board members to source candidates.8 For privately held companies, the dependence on professional networks and word-of-mouth referrals is likely even greater.

For the 115 companies based in California, 44 (38 percent) had a female board member, as required for the 2019 deadline.

Half of those — 40 companies or 41 percent of those studied — had two or more female board members.

Women held 18 percent of all board seats for these 98 companies.

The data suggests that, as companies on the IPO track address the SEC requirements for independent directors, the gender composition of their boardroom shifts toward improved diversity.

While gender is only one measure of diversity, the dramatic gender imbalance revealed in our analysis of private-company boards highlights the opportunity to bring a broader set of perspectives to the table when it comes to the governance of venture-backed companies.

Even the most heavily funded private companies trail far behind public companies — including those with recent IPOs — when it comes to women in the boardroom.

The lack of gender diversity on the boards of venture-backed private companies reflects — but is not fully explained by — the lack of gender diversity among company founders and funders, who compose roughly 80 percent of the board seats studied.

For independent directors, the gender mix is slightly less extreme, pointing to the opportunity some privately held companies are taking to introduce more diversity to the boardroom through the addition of independent director seats.

Of the companies studied, 29 percent did not have an independent director on their board.

For this study we analyzed 200 of the most heavily funded private U.S.-based companies to understand the composition of their boards as of Q3 2019.

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