Senior Partner, Global Industrial Technology Industry
It’s a curious paradox: Technology companies are some of the most innovative businesses in terms of strategies, products and services, but are among the least progressive when it comes to the number of women serving on their boards of directors.
Technology, which used to be a discrete and limited sector of the economy, has become a crucial component of virtually every aspect of day-to-day business operations. Companies that five years ago would have said technology was tangential to their business would today acknowledge that tech expertise is as essential to their overall success as finance or marketing are. This realization has led boards to recruit directors with backgrounds in social media, e-commerce, technology infrastructure and cybersecurity. A grasp of technology will be a baseline requirement for the next generation of board members.
But what about diversity? The idea that boards should not be the exclusive domain of fair-skinned men has gained support, not just because it’s good public relations to project the image of a model corporate citizen but because of studies that have proven the value of diversity, in particular the inclusion of women.
And yet, many tech companies don’t seem to be getting the message.
Of the 980 corporate directors serving Tech 100 companies, only 14.6 percent were women. In contrast, women hold 20 percent of board seats in the KFMC100 (the largest companies by market capitalization in all sectors). Further, 16 of the Tech 100 boards had no female directors; only one KFMC100 board was all-male. (Six tech companies added women after our data were collected in June 2013; only 10 boards were without women as of December 2013.) Twelve Tech 100 companies have three or more female board members. In the KFMC100, 37 companies have three or more female directors.
What can technology companies do to address that disparity? Observation alone won’t lead to change. Boards must identify and remove the barriers that exclude women directors. Only then will they tap the pool of talented female executives who wish to further their careers and put valuable skills and experience to good use.
The Tech 100: Snapshots
A Paucity of Female Directors
Lack of representation. As of July 2013, 16 of the 100 largest technology companies had no women directors at all, a stark contrast with the KFMC100, which had only one board with no women. At the same time, there are 12 Technology 100 boards with at least three women members.
Lack of alignment with customers. Of the 16 technology companies with no female board members, three (Activision Blizzard, Leap Wireless and Sprint) target consumers directly—and a significant portion of their customer base is women. Note: After the data for this report were collected, Activision Blizzard and Sprint announced the election of a woman to their boards.
Tech Board Demographics
Gender. There are 143 women out of 980 total directors, or 14.6 percent, well below the 20 percent of KFMC100 board seats held by women.
Age. With an average age of 61, Tech 100 directors are younger than those in the KFMC100, whose average age is 65. Female tech directors are younger still, with an average age of 59.
Tenure. On average, a Tech 100 director has served nine years, compared with eight years for those in the KFMC100. For female tech directors, average tenure is seven years vs. nine for male tech directors.
Slow pace of change. Of the 91 directors joining Tech 100 boards in the 12 months ending June 2013, 16 were women, bringing the proportion of female directors up slightly to 15 percent total. Between July 31, 2013, and December 2, 2013, an additional 15 women joined Tech 100 boards.
Profile of new women joining boards. The age range of women joining boards for the 12 months ending July 31, 2013, is 49 to 62, with an average age of 54. They are from a variety of industries and functional backgrounds.
Untapped talent out there. There are 15 female chief financial officers (CFOs) in the Tech 100. Of these, seven are not yet serving on an outside board, suggesting boards haven’t tapped many valuable sources of expertise.
Few Women in Board Leadership Positions
CEOs. Six women are CEOs of the Tech 100 companies; three also chair the board.
Lead or presiding directors. Five women hold the title of lead director or presiding director.
Committee chairs. Fifty-seven women chair board committees:
- 18 nominating/governance committee chairs
- 17 audit committee chairs
- 16 compensation/human resources committee chairs
- Two finance committee chairs
- One of each: Compliance and Risk, Corporate Relations, Business
- Conduct, Acquisitions