Women on Board!

By , May 27, 2015 10:09 pm

Gender diversity has been quite the hot topic in Silicon Valley. After Sheryl Sandberg’s book “Lean In”, there appears to be a steady stream of talks, conferences and news stories about this topic. At our company, Equilar,  we are building a product that allows a company to assess their Board of Directors. One of the factors is gender diversity. Even with all this attention only 19% of Board members in US companies are women.

Aaron Dhir's book

Aaron Dhir’s book

Recently I attended a talk at the Stanford Law School entitled “Where are the Women: Strategies for Increasing Board Diversity“. The conversation included the Aaron A Dihr, the author of the book “Challenging Boardroom Homogeneity” and Deborah Rhode, a professor at the Stanford Law School. These are the notes and thought that me and one of my colleagues took away from the discussion.

Spoiler Alert: Trying to force gender diversity is extremely difficult. Similar to socio-economic movements like racial equality, it’ll take decades to radically change. In fact, it may take a new generation of workers to fully implement true equality.

At the current rate of adoption on corporate boards in the USA, it will take about 70 years to achieve a 50/50 split. hardly encouraging.

 

The Way in Norway:

One on of the interesting anecdotes was the state of corporate law in Norway, where companies are required to have 40% female board members or risk dissolution. Aaron used Norway as a case study in many of his discussion. Could forcing gender diversity by law enact change? In the early days of the law’s passage there were companies desperately trying to get women, any women, onto their boards. This gave rise to a few not so nice terms like “Trophy Directors aka Trophy Wives” and “Golden Skirts”. Even then, the women hired were those that would most likely vote with the rest of the board. So diversity didn’t really change the vote, but it did re-distribute power. Over time, the women started to engage more and challenge the status quo. Sixteen countries now have a quota, but the USA lags still.

Stanford Law School hosts a talk about gender diversity

Stanford Law School hosts a talk about gender diversity

Interesting Anecdotes and Jokes:

Deborah indicated that women are thought to be more adverse to risk. If Lehman Brothers had been Lehman Sisters, they might still be around today!

Much research has been done, but has not proven that diverse boards will perform better financially. This has been one of the key problems facing this movement.

There are only 2.8% women in the Fortune 500 boards. Why? Some reason offered are:

  1. Not enough qualified candidates
  2. Women are just not as interested
  3. Interested but not being selected.

Culturally we expect men to be better leaders. There’s an unconscious bias to look in socially similar networks. These happen to be closed networks. We need to look outside the traditional CEO/CFO titles for candidates.

The funny thing is that in a recent survey, 79% of respondents say that past CEO’s are not good board members because CEO are used to pushing to get their way. They are not as open-minded.

In a survey of the Fortune 500, less than 50% even talk about diversity in their proxies. When they did, they talked about diversity in experiences and not gender. Surprisingly one of the most well known and progressive companies, Amazon, openly says that they do not think about gender diversity at all. This surprised Dr. Rhode.

What can we do?

We as a society expect more of the BOD since the 2008 meltdown. Diversity will be a slow trickle down effect. If shareholders can force diversity disclosures on the ballot and the SEC can demand disclosure, that would be a beginning.

Another idea is to have tenure limits to force board refreshes at a set interval. As we pass through a few generations of BOD members, new thinking will emerge.

As we look for members for a BOD, look outside the traditional past CEO/CFO roles. Look to lawyers, accountants, academics and people who have been on non-profit boards. This will grow the available pool and will invariably include more women.

Look to examples of success in diversity. Surprisingly the NFL and Military are great leaders in this area. They have more than tripled the % of women coaches and generals in the past 10 years.

Not surprisingly, one of the goals of our upcoming product offering is to unveil relationships and broaden the pool of candidates for board members. During our Summit in June, all will be revealed!

The Power of a Mission

By , May 13, 2015 8:07 pm

Often times I am reminded that a job is so much more than something to do or a way to  make money. In order to really be passionate about what you do, you need to believe in your mission. In fact a recent story came out about how some of the nations best computer scientists (yes out of Stanford), normally do NOT take the job that pays the best. ( Why new Stanford Grads Turn Down $150K salaries) They want a mission. An ideal that they believe in.

Recently our company was working on a Mission Statement. That seemed so cliche and it was so difficult to get agreement, but we did. Here’s our mission:

Equilar Logo

“To empower, engage and enable executives throughout the world”

Ok, sounds aspirational, but why should our employees care? This post is my interpretation of our mission and why it’s important.

The Realization

The largest public companies in the USA are our customers. The data and the analysis that we provide are used to make sure that they can attract and retain the best management. These companies and their management have a disproportionate effect on their communities, the environment and the lives of their employees. We (a group of 100+) people sitting in Redwood City, CA are creating the intelligence being used to make these management hiring decisions. The right CEO makes sure their companies give back to the community. They get compensated based on their performance. We help to inform these critical decisions.

An Epiphany

When I was about 25 years old and a Systems Engineer for a company called Borland, we were meeting with the largest corporations in the world and explaining to them how they should roll out their desktop application strategy. They were moving from a Mainframe/dumb terminal type environment into the new world of desktop computers.

I remember sitting at a huge conference room at Coca Cola world HQ in Atlanta, waiting for their senior executives to arrive. One by one, the executives and their assistants made their way to the large mahogany table that was polished to a mirror shine. After a brief introduction from my manager, he turned to me and told the assembled group, “And now Song is going to explain how you can modernize your operations with desktop applications.”

I realized that no other industry in the world would an assembled group from a Fortune 10 company executives sit still to listen to the advice of a 25 year old kid! That was a great empowering feeling. I realized that I liked technology! I’ve been at it ever since.

So What?

When I learned what we were doing at Equilar, I had a distinct feeling of Deja vu. Here were are, a small company in Silicon Valley effecting the destiny of some of the world’s largest corporations! We help them create the best management staff and boards by making sure the compensation and incentives align with company goals. Many of our employees are right out of college. It reminds me of that moment in my career when I had the Epiphany.

So, take our mission to heart and realize that like a “butterfly effect“, we can make the world a better place with the product that we deliver!

Goody bag to enforce mission statement!

Goody bag to enforce mission statement!

If you are not an Equilar employee, check out our Career Listings!

 

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