Stay current on changes and developments in corporate law with a wide variety of resources and tools.
There were no women on corporate boards at almost half of the 75 biggest initial public offerings in the U.S. in the past three years, a new analysis found.
Another quarter of companies that went public between 2014 and 2016 had only one woman on their boards, according to the research from a group that pushes for gender diversity called 2020 Women on Boards.
“As far as we know, no one has really looked at the gender diversity of IPO companies,” the group’s co-founder and president Malli Gero told Bloomberg BNA. “But what we hear anecdotally is that for new companies, the boards are stacked by VCs [venture capitalists] who put on their friends,” which oftentimes means men, she said.
The vast majority of venture capital goes to companies founded by men, according to research by Bloomberg. Even firms with female senior investing partners aren’t more likely to invest in companies founded by women, another Bloomberg analysis showed.
“There’s a structural challenge within the industry that does not support women on boards created by venture capital,” said Charlotte Laurent-Ottomane, executive director of the Thirty Percent Coalition, which advocates for women to hold 30 percent of board seats across public companies.
That’s why the national coalition—whose members include 2020 Women on Boards along with companies, investors and others—is starting to work with private equity and venture capital firms to provide resources that would help them bring more women into dealmaking and onto portfolio companies’ boards.
“If you buy into the business case,” that companies with more gender diverse boards perform better than less diverse ones, “then the investment will have a better return with women on the board,” Laurent-Ottomane told Bloomberg BNA.
For some companies such as GoPro Inc., their boardrooms have become more gender diverse since going public. The number of companies in the study with no female directors dropped from 37 to 22 over time, while the number with one woman rose from 19 to 27 as boards brought on their first female director. But most of the companies, including GoDaddy Inc., still had little to no gender diversity on their boards a year or two later.
“One or two years out may not be enough time,” Belen Gomez, senior director of research and board services at governance data provider Equilar, told Bloomberg BNA. Gomez said that lack of women on boards could also change as the campaign for more gender diversity spreads from large companies down to smaller and newly public ones.
Equilar’s latest tally shows that women hold just under 16 percent of board seats at Russell 3000 companies, a benchmark for the entire U.S. stock market. 2020 Women on Boards wants women to hold at least 20 percent of directorships by 2020.
Its analysis indicates there is room for improvement. The newly public companies’ boards are relatively small, with an average of eight directors at the time of IPO. More established companies tend to have nine to 12 board members.
“You don’t have to remove a man,” Gero said. “You just have to add a woman or two.”
To contact the reporter on this story: Andrea Vittorio in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Yin Wilczek at email@example.com
The analysis by 2020 Women on Boards is available at https://www.2020wob.com/blog/women-not-present-ipo-company-boards
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)