At Pinterest, the online bulletin board service that is valued close to $3.8 billion, some 70 per cent of the users are female. But the company’s board of directors is all male.
Male-heavy boards domin-ate in the start-up mecca of Silicon Valley, which prides itself on progressive thinking and putting talent first. A survey of 10 top venture-backed start-ups, as measured by venture funds raised, shows that six do not have any women on the board, including Pinterest. And none has more than one.
Reuters’ research relied on publicly-available data and discussions with start-up executives and board members.
The gender imbalance has been the norm for years despite some recent signs of change. Google, Facebook and Twitter all went public without a woman on the board. They are more diverse now.
Big, established companies, by contrast, frequently have two or more female directors, based on the 10 largest US tech companies by market value. All the top 20 have at least one.
The dismal record of start-ups when it comes to gender diversity was highlighted last month when Twitter came under fire for its all-male board on the eve of its public offering. On Thursday, the company announced that it had added former Pearson chief Marjorie Scardino to its board.
Entrepreneurs and executives did not question that there are few women directors at start-ups, but they frequently described it as unintended, and some such as Pinterest say their executive ranks are more balanced.
Start-ups tend to blame the lack of women on their boards on factors such as their youth, their small boards, their single-minded focus on growth to the exclusion of other priorities, and a scarcity of women steeped in technology. They also blame venture capitalists, who are usually male, usually hold the bulk of board seats – and don’t want to see their voting power diluted by adding non-investor board members.
Critics counter that entrepreneurs priding themselves on creativity and innovation simply aren’t trying hard enough on gender diversity.
At Pinterest, the focus is on work, said chief executive Ben Silberman, whose board consists of himself and two male venture capitalists. “It’s pretty heads down,” he said. If the company expands the board and a qualified woman emerges as a candidate, “we’d be open to it.”
“Diversity across all dimensions, including gender, is important to our success,” a Pinterest spokes-man said. The company’s leadership is roughly 40 per cent female, including its heads of engineering, finance, sales and recruiting.
Public companies think about board diversity all the time – whether it’s because they are constantly scrutinised or because they face public investor pressure.
“The companies that want to do it will do it. Those who don’t will not,” said Maria Klawe, president of Harvey Mudd College, a computer scientist and a board member at software giant Microsoft and chipmaker Broadcom. “This stuff doesn’t happen by chance.”
The issue is not simply one of social equity. A study by the Credit Suisse Research Institute, a bank-funded group, looked at 2,360 public companies and found that over six years, the share price of large-capitalisation companies with at least one woman on the board outperformed companies with no women on their board by 26 per cent.
For small and mid-capitalisation stocks, the outperformance totalled 17 per cent.