Do the Right Thing - Board Diversity in Tech by Kelly Huang

Automatic Summary

Board Diversity Progress: Doing The Right Thing

The drive for more equitable representation in boardrooms has been a notable cause for organizations worldwide. With a focus on promoting the inclusion of underrepresented groups, our society has registered some progress, although setbacks are also evident. Let's delve into the subject further.

About the Author

Hi there! My name is Kelly Huang, a passionate leadership coach and board diversity advocate for the past two years. My fruitful collaboration with Woman and Bio's Boardroom Ready Program has overseen 128 board placements – a testimony to our tireless efforts in promoting women in leadership roles.

Progress has been evident due to laws supporting diversity like California’s SB A 26. However, setbacks have also occurred with its rollbacks as well as A B 977 - a statute designed to address underrepresentation.

Board Diversity Stats: A Closer Look

  • In 2018, board representation for women was lingering around 15%. But by March 2022, these figures had risen considerably, with about 2,000 more women on boards, equating to a doubling of the percentage of female board members.
  • Despite the progress, there's still room for growth, especially when we compare our achievements to countries like France and Finland, which are close to achieving parity at C3 and board levels.
  • On the other hand, about 50% of boards in private companies are still male-dominated, a reality we must change.
  • Public boards have achieved 30% representation for women, which is significantly better than the 11% in private boards.

Board Diversity and Benefits

There is a wealth of research affirming the positive impact of board diversity on business performance. Diverse boards lead to better revenue performance and stock earnings. They also foster a culture of innovation and are less prone to fraud, according to a study from Case Western Reserve. Moreover, diversified boards curb "group think" phenomena, fostering better and more inclusive decision-making processes.

Representation of Underrepresented Females in Boardrooms

Attention to diversity should also consider ethnicity. Unfortunately, there is still noticeable underrepresentation in boards for Latina and AAPI (Asian Americans and Pacific Islanders) women. Indigenous representation remains critically low. Consequently, more work needs to be done for a more faithful representation of our diverse society.

Taking Steps Towards Your First Board Journey

Getting onto a board requires commitment and strategy. Starting with joining your like-minded community, networking, leveraging available resources, and conducting personal research are fundamental steps. Consider minor roles like advisory boards as stepping stones to board of governance roles.

Furthermore, identifying your unique skills, such as expertise in cybersecurity, digital transformation, or AI and machine learning, can increase your eligibility for a board position.

The Bigger Picture: Why Board Diversity Matters

Ultimately, this fight is about more than just boardroom representation. Increased female leadership impacts diverse areas from family life to profitability and even GDP. By fostering women's inclusion in leadership, we can potentially add up to 2.1 trillion to our GDP by 2025. Hence, when we boost women’s power and influence, we lift everyone.

To leave you with a powerful thought – let's join hands to do the right thing by improving diversity at all societal levels from the classroom to the boardroom.

Video Transcription

Hi, everyone. Thank you for joining this session. I'm so appreciative of this opportunity to talk to you about the progress with Board Diversity.And our title is called Do The Right thing because this is something we've been advocating for governments, for companies and for academic institutions to do, which is to do the right thing and promote more women and add more repre underrepresented groups onto boards. And so we definitely have seen progress. I know many of you are based um here in California and in the tech industry. So we definitely have seen some momentum. So I'm gonna talk more about that, but then we also seen some setback and that's unfortunate and all the more reason for me to talk about it and then get some traction with our constituents, women like yourselves to see what we can do. So let me first tell you a little bit about myself. I'm Kelly Huang. I'm a leadership coach and also a board diversity advocate for the last two years. I've been active with Woman and Bio's Boardroom Ready Program where we'll soon have 100 and 50 plus women who are um about 20 100 and 28 of them are uh on board. So we had 100 and 28 board placements.

So no doubt, the California Diversity mandate has been instrumental to our success. But like I said, we've had some setback with the law. The SB A 26 been rolled back and also the underrepresentation law A B 977 has also been rolled back. So in today's session, I'm planning on talking to you more about the impact of board diversity laws and how it's impacting our private as well as public companies. Next, I'll talk about the um specific benefits where board diversity has really been beneficial for companies based on research from different academic institutions. And lastly, I'm gonna cover how you specifically can take steps to start your own board journey. So let me get started.

So here, I'm sharing the stats in regards to what's happening in California. So you can see on the left hand side that in 2018, we are still more or less at 15% in terms of board representation. And also the caveat here is these are women represented on public boards where the headquarters here in California. So this is where the law applies ever since it's been implemented back in 2018. So fast forward to March 2022 we are seeing significant progress, right? You can see that we've added uh about 2000 plus women onto boards and this is based on the percentages too, right? We've doubled the percentage of women that are sitting on board. So this is terrific progress. Although for our European colleagues, we still have some catch up to do to France and Finland, right, where they're pretty much close to parody on the C three level and also on the board level. So unfortunately, I mentioned that there's been a setback. Um So let me first talk about what's happening with the private companies. So the public companies have achieved the 30% representation, which is fantastic. But on the left upper up upper hand um pie chart, you see that there is still a 50% representation of boards that are men only. So you probably have heard about the men only panels, the mans. Well, these are the men only boards, right? There's 50% of them.

And as I said, on the right hand side that cal partners research has done um has added, we've seen that 2000 some women um have been added onto boards, right? So out of the total about 6000, some public board seats, 2000 are held by women. And if the mandate were in place, there would have been another 300 women to be added this year onto public boards. However, the bad news is that the private industry, so a lot of the tech companies sit in this area, the woman directors are a much smaller percentage, right? You see that here where the woman directors on private companies are only 11% as compared to Russell 3000 or S and P five thou 500 which are both closer to the 30% number I referenced about California. And then those men only boards are still at 49%. Meaning the boards or at least one woman is only sitting at 51%. Whereas at least on the rest of 3000 S and P 500 there are many, many boards, right? 93% all the way up to 100% are boards with at least one female on board. So next, I want to talk about some of the, the rollbacks, right? So women's rights are under attack. Um, you don't need to look too far whether it's me too or looking at Roe versus Wade, um, that are reproductive rights are being rolled back.

And you see that Afghan girls are not able to attend schools again. And also we see that even though we had this terrific progress with board diversity with SB A 26 it was overturned. As you see in this article on New York Times, it was overturned back in May. And I think Tony Atkins who is the California Senate President, she says it best that our legal framework is not keeping up with our reality, right? And so there is more work to be done and that's why I'm here to talk to you more about what kind of things we can do on an individual level and maybe also on the public level. So in terms of benefits, so I mentioned that there's been the rollbacks and then there's the progress of California. But in fact, you see time and time again, there's been a lot of research done on this and this is from CAL partners that when you have a board that's better represented as in at least 30% if not more, you see that their revenue right is much better than the few fewer represented company boards.

And then in addition, you also would see and this is from CAL partners again that the stock performance and the earnings are also much better when you have the more diverse boards or the better gender represented boards, right? So they did this research comparing the performance of more gender diverse boards versus the men only boards. And I guess you can draw the conclusion that if they're socially backwards, maybe performance wise they're not doing as well, right? And next, you can also see that um this is the academic research um number one from Harvard Business School, Professor um Reisberg that when you have a more diverse board, you can have better innovation, right? This is referenced by this article here. Gender diversity can help with innovation.

Next um Professor Kasu from Case Western Reserve also did the research on all those banks back in 2008 that were hit with massive fines that those banks with more women on boards actually committed less fraud. So I and intuitive to me, but maybe that was a surprise in terms of the research results. And lastly, and we all know this, right, a more diverse team are inevitably better at making better decisions due to the different perspectives and less of that group think. So we have all these great benefits, but there is still more work to be done, right? And so this is where I want to reference again from cal partners work. Um You know, they're looking at the um the underrepresented females in the boardroom. So starting with all the way on the right, obviously, we're not, we're not making a huge progress with indigenous people in terms of their representation overall. However, with the black females, we, well, at least in California, the demographic representation as well as the board representation is fairly similar, although I wouldn't call that a huge progress because it's still a tiny number next in the A API community where I come from, our representation is about 7.9% on the demographic front, but only about 5% or so in the boardroom.

And actually, there's even a huge a much bigger disparity because A API S tend to be almost 30% of the professional workforce in the technology world. So if you look at that 30% of all professionals and yet only 5% of the a api women are sitting on boards, right. So there's a disparity there that needs to be confronted. And then in the Caucasian female front, yes, you see that the demographic side, there's fewer of them, but in the boardroom there are more of them. And then lastly, I think we really have done a disservice to our Latina community where demographically there are a huge representation at 19.7% of the California population and yet only 1.5% in the boardroom. And this really speaks to, I think, you know, especially the retail companies or restaurants that serve a lot of Hispanics here in California. Um They have work to do, right? You know, they need to start bringing that diverse voice into the boardroom in order to serve their customers better. So that is more of the the more work to do. So that's on the, you know, the society level. How about individually?

So let me advise you on how you might want to think about going on to this first board journey, right? So I would recommend number one and just as we're gathering here in the woman in tech community, if you can find a community. So I came from boardroom ready, right? And um that's part of woman in bio, but there are definitely other groups such as women in the board room, the board list him for her and Bolster, which are all very active in placing um more women and more underrepresented groups onto boards. And so if you join those groups, you'll get more educated on the whole board governance issue. And also, like I said, fine, like-minded community of other people who are trying to get onto boards. Number two. And I think this is where a lot of people maybe forget that you have a lot of supporters in your midst. And so whether it's a CEO you worked for before somebody you lost touch with years ago, they're actually sitting on boards or their investors reach out to those people to let them know you want to sit on boards because a lot of times we have these dormant connections and, and I'll tell you even from boardroom ready, a lot of those boardroom seats have come from connections.

So amplify, you know, your um you know, wanting to go on board, journey message amongst your network and the people most likely help you are the C suite are the sitting board members, are the investors next. You want to let the recruiters know? Right. So during this great resignation, I'm sure many of you have gotten the call from the recruiters. Hey, you know, I have the position for you. Well, what maybe what they don't know is that you're interested in being on the board. So you might want to call them back, especially if they placed you recently, if they had to find out if they have a board practice and let them know about your interests and also help them guide you in terms of what kind of skills these boards are looking for and then what kind of skills you are yet to acquire in order to be better suited for those board positions.

Um Next, now my step number four, I would say is, you know, do your own research because I know many of you are probably in touch with either competitors or suppliers or other tech companies or even non tech companies that could really use your unique perspective. So start looking for companies that can use your help and see if you can, you know, at least start sitting on those advisory boards, right? So I want to clarify there's different kind of boards and usually we usually people are talking about the board of directors, which is the governance body that work with the C Suite team, right to help the company. But sometimes there's also an informal advisory board and those are places where you can find possible board seats right, in an advisory role. And I myself sit on a scientific advisory board also called SAB. And those are also useful in that they're not necessarily part of the board of governance, but they are key to the advisory piece of the company in terms of guiding their direction one way or the other. So these board advisory roles are available, I think at the public as well as private companies.

So again, those of you at the VP level and above, I would say getting an advisory role is a good stepping stone to getting those board of governance roles that I'm talking about. Ok. Next, I want to get to the different kind of roles, right? So you have the various C suite roles, right? And we already know that in technology and also in private industry, those c suite roles, executive roles are few and far between, right? You see that women are only 7% represented there. And then in terms of investors. So again, the V CS don't have a high, you know, grade here, right? Only at 9% that are women that are um investor level and therefore taking up some of those boardroom seats. And lastly, and this is where it's most promising. If you can find those independent board seats, women are starting to occupy more of those seats, right? So as I said, the private industry have work to do, the public companies are catching up. But overall there are still, like I said, 50% of the men only boards out there. So let's find them and see if we can get them to change. Next. I know many of you in this conference have these skills, right? And these are very much sought after in the boardroom, cybersecurity, digital transformation, social media, and digital marketing gurus. And then those A I and machine learning experts.

And I know especially in the woman in bio community, people who have the A I machine learning data science background that can overlap with the data. Uh Sorry, with the woman with the biotech, with the Pharma, those kind of skills are also becoming very, very well sought after.

So I want to encourage you again, with those skills, start doing the five steps that I mentioned so that you can get yourself on to some of those boards and then I can read about you and add you to statistics of the California and also overall board representation, right at the rest of um 3000 and then the S and P 500.

So lastly, let me get to, why do all of this, right? Why, why carry on the work of having women in these top leadership position? Well, starting with families, when women take the lead on advocating for their families, they help the Children, they help their families get better health and better education. When women are on those top leadership positions, you see us as I've seen shown you in the research, right?

We get better profitability, we get better thinking in the boardroom, we contribute at all levels in the community. And I recently talked with um Hannah Beth Jackson, who is the originator of the SB A 26 law in California. Women like her have secured more funding right up to 10% more for their own district. And lastly, if we don't use the other half of our society, what are we doing? Right. So when we increase more women's participation in our labor force, we can add up to 2.1 trillion to our GDP by 2025. And I think this is why Malala is my personal hero because this is what she said at her young age, right? At the risk to her own home, at the risk to her life, she chose to advocate for the other Afghan girls who cannot get an education, right? She raises up her voice so that she can shout from her platform and be heard across the world and help all those other girls, as I said, right? The Afghan girls are now starting to lose their rights to education by having somebody Malala. She can better advocate and make sure those girls aren't lost in the fight to get more education for themselves and improve their lives. So lastly, I want this is a thought, I want to leave you with that. When we increase women's power and influence, we lift everybody, right?

And this is why this work is so important at the top level, at the board, diversity and obviously bottom up with the diversity and inclusion efforts. So that's all do the right thing and make sure we can improve diversity at the board level and classroom level and in the corporate world. Thank you very much. And let me see. I know we have very little time left. But if you have any questions, I know this chat room will stay open. So feel free to send me questions. Thank you, Kathleen. Yes. If we lift all women at all level and we in particular, right as women are really good at this stuff, right at the society level, at the family level, in the boardroom level, in our overall society.