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board diversity

Boards

How boards must change

June 16, 2020

“The full weight of responsibility for change rests with those who control the institutions” – White Fragility:Why it’s so hard for white people to talk about Racism by Robin DiAngelo

Our institutions in the US are led predominantly by men. Women would simply not have the rights we cherish today, such as the right to vote, if the majority of men in power had not supported them. 

Companies have been paying attention to gender diversity among employees for some years now. It’s been talked about at length but it was not until California mandated that boards include women, and major investors like Blackrock began to use their weight to require female directors, that many companies have moved quickly to bring one, or more than one, woman onto the board. Finally, when faced with a potential fine or a “no” vote from a major shareholder, boards listen. European boards would not be 40% female unless it was the law. Setting, and meeting, serious targets works to bring about change.

But our institutions are also led by people who are predominantly White, or if you are in technology, White or Asian. Which means we, the leaders, carry the responsibility to create the change needed to make our workforces, our leadership teams and our boards racially diverse. It’s both the right thing to do, and we now know diversity creates better decisions and better results so there is no business reason to object.

As Omar Johnson says in his compelling Open Letter to White corporate America “Inside your company walls, you need to hire more Black people. Period.” 

I am horrified by the recent murders in the Black community. The human and social cost of systemic racism in the US is sickening. I am humbled by my ignorance and committed to getting better educated and taking action. I must do better. Our companies must do better.  

The way I, and my fellow directors, can effect change is to be committed, supported by action, to helping our companies become truly diverse at all levels. Racially diverse and gender diverse. It will take time but boards and governance committees are responsible for reviewing our ESG programs–Environment, Social and Governance–and to show progress. This was a growing area of focus which is now in the bright spotlight of current news. Several large institutional investors had started to demand diversity at the board and executive levels, which will add fuel to drive change.

As directors we must ask the questions and require the metrics which will drive meaningful, ongoing improvement to racial diversity in our companies. It’s past time.

Photo: The Alhambra Spain © 2018 Penny Herscher

Boards

It’s time for Tone at the Top on Diversity – or Why Uber is Yet Another Wakeup Call for Boards and CEOs in Tech

February 24, 2017 Leave a comment
 Uber is just the latest company caught in the act of discriminating against women in it’s workforce. Sadly for many minorities in tech this is an old story.

As Ellen Pao writes in today’s Time article it is an indication of “tech’s existential rot”. In a world that “started off seemingly harmlessly by white men funding white men with few exceptions. When only white men were given opportunities, only white men were successful. White men went on hiring only white men, because it seemed to be a common trait of successful employees. Then investors who were white men decided only white men could be successful and doubled down on white men. White men who succeeded in the system decided it worked and saw no need for change. Fifty years later investors can’t break out of that pattern.”

But it is time for the pattern to break for many reasons. There is mounting evidence that diverse teams build better products – they are more likely to understand the buying behavior of their customers if they reflect the customer. There is also growing research that companies with diverse boards and management teams produce better returns for investors -so now some investors are encouraging boards to take on diverse board members.

But more importantly it is no longer acceptable for companies to allow employee harassment to continue while HR departments stand by or worse become part of the problem, as Uber is finding out to it’s detriment. The #deleteuber campaign has been due for a while and will hurt. (note, I switched to Lyft a year ago after reading about the leadership culture at Uber.)

So if it is no longer acceptable at the board level, in the executive team, and in the engineering ranks what can we do to make change happen faster?

I have worked in the “bro” culture of tech in Silicon Valley for more than 30 years. I have repeatedly experienced unconscious bias (sometimes not so unconscious ), being underestimated, being dismissed, being propositioned etc. and I have worked hard to over come it as I became a CEO who grew my company through a successful IPO and acquisition. And as I have done so I have been open and public about my wish to be a role model to other women that you can be technical, and be in a leadership role, and have a family in the technology industry. It’s possible to do and be happy.

I was conscious of the challenge I was facing from day one when I was one of only a handful (I think 5) women majoring in math at Cambridge in my year, out of about 300. And so, to be a role model, I have always tried to hold a leadership position in any situation I am in, especially if everyone else in the room is male.

It is so clear to me now that the problem we have in tech is not a pipeline problem. Yes, we need more little girls to like computers, and more little african american boys to believe they can be Mark Zuckerberg, but we have plenty already who enter the tech world. But the women leave in droves within 10 years because the environment is hostile. Our problem is keeping women in an industry that makes life difficult for them.

It is time to set the tone at the top. To insist that boards have at least 2 or 3 women on them (not just none, or the “we have one so we’re done” you see on so many boards). There are now several recruiters who specialize in finding qualified women with the right experience for boards. For example Beth Stewart of Trewstar would tell you there is no shortage of qualified women to serve, but a shortage of boards who think this is an important issue.

It is also time for boards to insist that the CEO builds a diverse leadership team. This takes real work to find diverse, qualified executives but it can be done in most fields. Uber is just one of many examples where a mostly male leadership team is simply deaf and blind to the issues facing their female employees.

“Tone at the top” is an expression used by boards when reviewing the results of the annual audit. They discuss whether the management team is committed to honest, ethical behavior and whether they operate with integrity. The discussion is important to sign off the financials – after all what audit committee chair would want to sign off the financial filings if he did not believe the CEO and CFO had integrity with the numbers?

It’s time for companies to embrace a “tone at the top” discussion around equal opportunity for all employees. It is time for every board to pay attention to the diversity statistics within their companies. How many women are employed at every level, has the company done an audit of pay across gender to check that women are not paid less than men for the same job? Are the percentages of women in leadership growing or shrinking? It is just not hard for HR to run reports and track progress over time – but it takes a serious discussion on the importance of diversity from the board down to build a world class company in the 21st century.

I am hoping this is what Eric Holder and my friend Arianna Huffington will now do for Uber.