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14 Nov

There’s a Known Shortage of Women on Public Boards,

In what may come as a surprise to nobody, there still aren’t enough women on corporate boards.

Women now hold 28 percent of corporate board seats, and that number drops to six percent for girls of color, in accordance with the most recent insights from advocacy organization 50/50 Women on Boards and its 2022 progress report.

If matters could possibly be made worse, the report found the pace of bringing gender diversity to corporate boards is slowing.

In taking a look at the progress between June 2021 and June 2022, tracking the proportion of girls on Russell 3000 Index company boards (the biggest public firms within the U.S.), the uptick was just 2 percentage points, in comparison with 3 percentage points for the 2 prior years. The proportion of recent board seats going to women dipped 8 percent in the primary half of 2022 compared with the last half of 2021. And of the ladies joining, two-thirds were invited to take a seat in newly added seats, not replacing any men.

“At the present pace, U.S. firms wouldn’t reach gender parity or diversity on boards for one more decade,” read the foreword of the report by 50/50 Women on Boards, which has set as its goal to achieve 50/50 gender parity on boards (and of that fifty percent women, it wants 20 percent to be women of color), though those goals usually are not marked with a done-by date.

On the bright-ish side, public firms with three or more women on their boards, plus those with 50/50 parity, surpassed 50 percent for the primary time, and people with no women on their boards fell to 2 percent, per the report.

But what’s happening with smaller, private firms focused on consumer products — like many in fashion and wonder — that haven’t any mandates on gender parity or no public scrutiny to advance in the world?

Similarly, and in lots of cases understandably, little. Which is where the Women on Boards Project has stepped in.

The nonprofit project bills itself as a “community of firms, investors and business leaders who’ve united to bring equity to non-public consumer company boards.”

It began as an issue of frustration for cofounder Sheryl O’Loughlin, who was consistently being called for board positions and when asked by search firms to suggest other women, she would. But then the businesses wouldn’t reach out.

“’Why is that this model so broken? We want more women on boards after which if I’m on a board, I’m the one woman on the board. What’s the catch here?’” Brianna Rizzo, WOB Project board director, recounted O’Loughlin as saying.

As such, together with a small team that Rizzo joined early on, she said, “We got together and we were like, what if we put the ownership back on the VCs [venture capitals] and the PE [private equity] funds to essentially think through this as a business problem versus just enthusiastic about it as an afterthought?”

While there’s no shortage of projects, organizations and initiatives aimed toward getting more women into the boardroom, the dearth stays apparent and the reasoning still comes all the way down to box ticking.

“A lot of this happens because firms are going public,” Rizzo said. “That’s been the common thread for these placements and a number of these stories for the last couple of years. It’s like Goldman [Sachs] mandates one woman in your board, so it didn’t really fundamentally change until people began considering through, ‘oh, well a bank is mandating it so if we would like to go public we’ve got to do that, we’ve got to envision the box.’”

But for firms, like consumer product firms whose exit strategies typically aren’t to go public, “they sometimes sell to a strategic [partner] and so the board construction conversation is suddenly not happening really,” she added.

To work around that and be certain women are being placed on boards with more regularity and corporations are benefiting from a diversity of thought that has already proven to enhance business and bottom lines, WOB Project — which counts sponsors like L Catterton and VMG Partners, and brand partners including The Honey Pot Company, Aden + Anais and Glo Skin Beauty — is making those conversations occur early.

“We would like to sort of come back to square one and say, listen, there’s more opportunities at consumer brands for girls to enter the chat because 80 percent of household goods and consumer products are purchased by women,” Rizzo said. “And all of us wish to see a bit of little bit of ourselves within the products and things that we eat, so why don’t we actually put the buyer within the boardroom or the client within the boardroom? And that may be a woman.”

With its growing network of A-list women in business, WOB Project helps to have them fill board vacancies, but is pushing up against excuses of capital constraints and “it’s too early we don’t need an independent board member” or “we’re going to attend until our next funding round.”

To that, Rizzo says: “You’re missing a lot opportunity because in case you usher in someone who can actually really help and possibly even higher the corporate ahead of a fund raise, that’s much more attractive, like ‘hey we would like to fill this before we fundraise because we would like someone incredible on the board to draw higher VCs and higher PE funds.’”

It could be a hurdle to recover from for a lot of, definitely. But what nobody should look to fall back on is blaming a scarcity of qualified women.

“There isn’t a pipeline issue,” Rizzo said. “We have now so many incredible women, it’s really just connecting them with the correct opportunities.

“What’s interesting in early-stage consumer board searches that’s quite different from among the later-stage board searches is that when an organization goes public, you’re chasing the dollar on the stock market. It becomes about governance, you may’t move as quickly,” she continued. “The board members that we’re working with for early-stage and privately held business, they’re in it with these founders they usually’re giving them feedback on potential strategy and product and marketing…truthfully it’s an exciting time to be a part of a personal board since you aren’t constrained by what the market is dictating that you may have to do to extend your stock price. So having the ability to actually work closely with these founders and see your fingerprints on the magic, you get to scale the magic.”

Relating to what’s held back scaling the general percentage of girls on boards, whether at public or private firms, it still comes all the way down to bias. And what’s the one thing Rizzo desires to cast off in an effort to see things advance in the correct direction? Calling women “board-ready.”

“If we could just eliminate that — it frustrates us a lot once we hear the term ‘board-ready.’ Would you ever describe a person as board-ready? No, never. But yet women get deemed that we’re not ready,” she said. “We’re ready, we’re here. Plenty of these women have had such incredible careers constructing these brands but they haven’t had a board seat yet so it’s like, well are they board-ready? Well, they’ve been trusted with multimillion-dollar marketing budgets and PNLs [profits and losses] and hired 20 to 100 people across the team — what else do you wish?”

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