Female representation on Silicon Valley boards nudged up in the past year. Fifty-seven percent of boards have at least one woman director, the highest percentage of boards with female representation since Spencer Stuart started tracking the information in 2003. Women now make up 9.1 percent of all Silicon Valley directors, up from 8.6 percent in 2010.
Despite the improvement, female representation on Silicon
Valley boards continues to lag the S&P 500. How can the Valley begin to move the needle on this issue? Ilene H. Lang, president and chief executive officer of Catalyst, spoke with Spencer Stuart about the continued scarcity of women in Silicon Valley boardrooms and the models that might help to change that.
Female representation on corporate boards in Silicon
Valley has been consistently lower than among S&P 500
companies. What are your thoughts on that?
Ilene H. Lang: Why is the average lower among Silicon Valley companies? I think there are a few reasons. One is that they have smaller boards, and smaller boards tend to be less diverse. As your analysis shows, larger companies in Silicon Valley have larger boards and levels of female representation that are closer to the S&P 500.
Secondly, these are much younger companies overall, and
younger companies often have a lot of venture capitalists (VCs) and founders on the board. Board independence is not as big an issue. These boards tend to be smaller and clubbier; they tend to have the people who were there from the beginning and know the way they do things.
A common approach to recruiting board members at early-stage companies is to recruit friends; you recruit people like you or people you know already. As companies grow and become more global and include more people from other disciplines — including sales, marketing, HR, finance and services and support — they become more diverse in their leadership and on their board of directors.
If it’s the natural progression of a young company to have less diversity, to have a smaller, clubbier board, and become more diverse over time, does it make a difference that there’s not as much female representation at that point in time?
I think it does make a difference. It’s not by accident that so many companies can’t get past the first act. Many of these smaller companies don’t grow up to be large companies because they run out of gas. They can’t get beyond their first product or get another hit. There would be less of that if, early on, the boards and the leadership team were capable of integrating more perspectives and more points of view. I think they’d have a longer runway. That is not to say that they haven’t been successful or haven’t made money for their VCs and for themselves, but you never know what could have been.
Several European countries have adopted aggressive targets or formal guidelines to increase the representation of women on boards. What's your view of these legislated approaches? Is there a model you see as most effective?
Every culture, every country, every society has its own standards, norms and expectations, so approaches will differ. I would say that most companies and most businesspeople really hate the idea of quotas because they think that quotas imply lack of quality. In Silicon Valley, many will go to the grave saying it’s a meritocracy out there. What they don’t realize is that if it were a meritocracy, then talent would rise and you would see representation at the top the way you see it at the bottom. In fact,
the deck is stacked in favor of people who are like the founders of the company.
From my perspective, what you want to see is the outcome.
It really is better for a business if there are more women on the leadership team and on the board, but how you get there can vary. We do know that quotas produce the outcome. Norway’s economy is doing just fine and they have 40 percent women on the boards of the public companies there.
There is no way any quota laws would ever get passed in the U.S., but looking at it philosophically, any company that’s serious about increasing the representation of women on the board will make a commitment, will establish its own targets and quotas, and will do it.
There is a perception in some circles that there aren’t enough viable female candidates for board positions? Do you agree with that?
I don’t agree with that. There are lots and lots of very strong women candidates, but there are two things that are important to mention. First, we have documented over the years the double standard women face. You can see this by looking at women’s career paths, as well as the results of formal studies. So gender bias exists, and it means that women have to have more experience than men do in order to get a comparable consideration. On the other hand, in light of the growing importance of digital technologies, it’s a new world out there, which may be beyond the experience of a lot of the people we typically
see on boards.
So then what should companies and senior leaders do to prepare the high-performing women in their organizations for more senior-level roles and board opportunities?
When we compared the career paths of mid-career women and men, women actually get more mentoring than men, but men’s mentors are much more senior. They are more likely to be in the C-suite and, therefore, they become what we call “sponsors.” They are in a position to shepherd their protégés along and provide access to opportunities. Women just don’t have that. Based on
that kind of research, we really advocate for formal sponsorship
programs where the senior leadership of a company is accountable for grooming successors, and that talent has to be different from themselves. So, no longer is it okay to mentor somebody who is just like you, went to the same school you did or reminds you of yourself when you were younger and you’re going to save them
from all the mistakes you made. The right thing for the company is for senior executives to mentor and sponsor upcoming stars who are in a different mold.
CEOs should also be encouraging up-and-coming female
executives to get outside board experience. There are women who might not be in the C-suite yet but are running multibillion-dollar businesses, and they ought to be promoted by their CEO to other companies for an outside board role. Many mid-cap companies, for example, could really use somebody who has run a multibillion-dollar business on their board. Even C-suite women who spend
a lot of time in the boardroom need their CEO or their chairman to advocate for them.
What advice do you give to women who want to move up both within the executive level and to the board?
What women can do is start planning to become a really strong, effective candidate with the right kind of resume. They can sit on nonprofit boards, which many do, representing their companies. Some of the very prestigious nonprofits have a lot of corporate people sitting on their boards. A C-suite woman or a really effective investment banker could very well step into one of those boards, get some experience and be seen as a really strong contributor, but also establish a network that may help them get
on a first corporate board. But it takes planning and it
takes a number of years.
This article is included in Silicon Valley Board Index 2011.
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