It’s not a secret that Silicon Valley faces the perception of a diversity problem. Specifically in corporate governance, shareholders have submitted proposals about releasing gender pay parity information, and tech companies are among the stragglers in communicating board diversity information. Fewer than 6% of S&P 500 tech companies included explicit disclosure about their board composition related to race or ethnicity last year, for example, compared to more than 20% among industry leaders.
The lack of disclosure about board diversity is not necessarily an indication of a lack of progress on the part of tech companies, but it does indicate a lack of transparency. That, and the hard data shows that they are in fact falling behind.
A recent Equilar study found that while companies in the Silicon Valley 150 saw an increase of nearly 66% in the percentage of women on boards in the past five years, they still lag the S&P 500 considerably in terms of gender diversity. As of 2016 annual meetings, 21.3% of S&P 500 board seats were occupied by females, up from 16.6% in 2012. By comparison, boards at the largest Silicon Valley companies had just 15.3% of directors’ chairs occupied by women, up from 9.5% in 2012.
Looking at the changing attitudes of tech companies, the New York Times recently profiled this phenomenon, in part recognizing the angle that increasing gender diversity on boards is not without progress. As with other talent markets in the Bay Area, the demand for women on boards is reaching a fever pitch.
“Boards are looking at diversity across multiple dimensions, such as gender, ethnicity, age and unique skill sets,” said David Chun, Founder and CEO of Equilar, as cited in the New York Times piece. “If you can bring a number of these different attributes and perspectives to the boardroom, you’ll be in high demand.”
There is a question is whether these boards are adding significant numbers of women to their ranks, or if they may be instead finding some of the top candidates and bringing them on to as many boards as possible. Women interviewed for the New York Times article acknowledged they found many boards will circle around within their own networks of acquaintances, which inevitably would result in the same people receiving board invitations over and over.
Of course, this is human nature, and not an uncommon phenomenon—to look first to who you know and trust to help make important decisions, that is. But in the tech sector, where expert use of big data is a point of pride, there’s little excuse to ignore the access to information available through new technology and digital networks. Looking for new ways of thinking and truly diverse perspectives seems not only integral but also necessary as a part of the mission to test boundaries in the way that people think and interact. Considering the universal effect technology products and services have on the country and the world at large, taking the time and diligence to access expanded board networks seems like a natural step.
Equilar also examined the Silicon Valley 150 companies that had the highest number of female board members. Overall, HP and Hewlett-Packard Enterprises (HPE) led the way, each having five females on their respective boards. However, because HPE has more overall members, the percentage of female members was slightly below these other boards at 35.7%.
Header image: Zendesk, the public company with the highest percentage of women on boards in Silicon Valley, has directors who also serve on the boards of high-profile tech companies such as Twitter, Yelp, Pandora and HP. The Equilar connections map is shown detailing these corporate ties.
For more information on Equilar research and data analysis, please contact Dan Marcec, Director of Content & Communications at firstname.lastname@example.org.
Equilar BoardEdge features a one-of-a-kind search function that not only allows users to filter by name, company age, title, experience, location and gender, but also provides a social media-style connections map that shows how potential candidates and companies are tied to each other. Including the newly launched Equilar Diversity Network—a “registry of registries” connecting candidates from various diversity organizations with boards—BoardEdge is the only board recruitment tool available with this comprehensive network.