Diversity on Tech Company Boards Continues to Move at a Snail’s Pace

Earlier this month, ecommerce giant Amazon appointed its first African-American female board member since 2009, tapping Starbucks chief operating officer Rosalind Brewer. However, expectations of a surge of similar moves in Silicon Valley should be tempered by this fact: Last January, Facebook appointed its first-ever African-American board member, former American Express chairman and CEO Kenneth Chenault, and in the 13 months since, little else has changed in tech company boardrooms. Alliance for Board Diversity chair Linda Akutagawa, president and CEO of Leadership Education for Asian Pacifics, expressed some cautious optimism, particularly among the Fortune 100, but not necessarily in the tech sector. She cited the Missing Pieces Report—an examination of women and minorities on Fortune 500 boards, published by the ABD in collaboration with Deloitte—saying that while there were slight upward trends in 2018, white males still occupied 66 percent of Fortune 500 board seats and 61 percent of Fortune 100 board seats. Brewer became the first African-American woman to serve on Amazon’s board since former Genentech president and CEO Myrtle Potter did so from 2004 through 2009. The only minority with a seat, she joins three other women: former MTV Network chairman and CEO Judy McGrath; Patricia Stonesifer, former Microsoft executive and current president and CEO of nonprofit Martha’s Table (she is also on Amazon’s nominating and corporate governance committees); and Wilmer Cutler Pickering Hale and Dorr partner Jamie Gorelick. Members of Congress reacted to Brewer’s appointment. Rep. Robin Kelly (D-Ill.), co-chair of the House Tech Accountability Caucus, said in a statement, “It is my hope that this barrier-breaking appointment serves as an example to other industry leaders regarding the positive economic, business, innovation and inclusion benefits offered by increasing board diversity, especially to companies leading the way in our modern innovation economy.” And Rep. Emanuel Cleaver II (D-Mo.) shared the following: “I hope that this appointment will lead to a domino effect where more companies choose to follow Amazon’s lead and hire a wider array of talent moving forward. If not, Congress will still be there to hold them accountable.” As for Facebook, since Chenault’s appointment last year, there has been only one change on its board. WhatsApp co-founder Jan Koum left the company last April, and his successor on the board was another white male: Cranemere Group CEO Jeff Zients. Facebook chief operating officer Sheryl Sandberg said at the company’s annual meeting last May—in response to a question from the Rev. Jesse Jackson, founder and president of the Rainbow/PUSH Coalition—that the company would adopt the diverse slate method for board members going forward, meaning that candidates from underrepresented backgrounds must be considered, but the meeting took place after Zients’ appointment. Jackson said in an interview, “Urban areas represent market, money, talent, location and growth, and this should be present on boards. Board members must be empowered to speak up and speak out. They can’t just be there taking up space. Inclusion leads to growth and, with growth, everybody wins.” The lack of turnover in corporate board seats has proven to be one of the major obstacles to diversity. According to the Missing Pieces Report, only 22 white male board seats were lost last year among Fortune 500 companies. Debbie McCormack, managing director of the Deloitte Center for Board Effectiveness, brought up another issue—the same people serving on multiple boards. She said, “Can they broaden their base? Can they expand further? Are we including a diverse set of people to look beyond just the traditional folks? All industries could be examining how to increase diversity on boards by not having the same people on multiple boards.” And Akutagawa pointed out that Fortune 500 companies added 230 new board seats from 2016 through 2018, with 59.6 of them going to while males, while those numbers for the Fortune 100 were 17 and 51.1 percent, respectively. The board of directors at Twitter lost former MacArthur Foundation chairman Marjorie Scardino but added Lazard senior advisor Ngozi Okonjo-Iweala, retaining its total of three women and boosting the number of minorities with seats to three. Women currently sitting on Twitter’s board are Okonjo-Iweala, Doteveryone founder and chairperson Martha Lane Fox and BET Networks chairman and CEO Debra Lee, while the company’s minority directors are Okonjo-Iweala, Lee and Twitter executive chairman Omid Kordestani. Snapchat parent Snap Inc. added a woman to its board of directors last July, Glossier head of brand marketing Poppy Thorpe. She joins Hearst Magazines chief content officer Joanna Coles. McAfee CEO Christopher Young is the lone minority on Snap’s board. There were no changes in the composition of the boards of directors of Google parent Alphabet, Apple or IBM over the past year. Alphabet’s board of directors currently includes three women: Diane Greene, former CEO of Google’s cloud businesses; former Pixar Studios executive vice president and chief financial officer Ann Mather; and Princeton University president emerita and professor of molecular biology and public policy Shirley Marie Tilghman. Three minorities sit on the company’s board: Google CEO Sundar Pichai; Roger Ferguson, former vice chairman of the board of governors of the U.S. Federal Reserve System and current president and CEO of Teachers Insurance and Annuity Association—College Retirement Equities Fund (TIAA); and founding board member and early Google investor Kavitark Ram Shriram. Grameen America president and CEO Andrea Jung and BlackRock co-founder Susan Wagner are Apple’s two female directors, and its two minorities are Jung and former Boeing corporate president and chief financial officer James Bell. Three IBM directors are women: chairman, president and CEO Virginia Rometty; Rensselaer Polytechnic Institute president Shirley Ann Jackson; and Saudi businesswoman Hutham Olayan, principal director and senior executive of The Olayan Group and president and CEO of Olayan America. IBM board seats are held by two minorities: Jackson and Olayan. Chenault left the IBM board earlier this week. What steps should companies be taking to help remedy this? “We don’t have a supply problem of qualified or talented women and minorities," Akutagawa said. "We have a really good, rich pool of talented women and minorities. Think a little out of their box and look to other places—people who may be less senior but still have operational, technology or other talent—to help advise them.” The Rev. Jackson said the issues go beyond simply being included on boards, adding, “You can be on the board with minimal impact unless you’re positioned properly. That’s our real concern. The boards need to be an access tool or a blocker, and not just for image.”

Diversity, Equity and Inclusion

Diversity on Tech Company Boards Continues to Move at a Snail’s Pace

Amazon appointed Rosalind Brewer, but there has been little progress elsewhere

David Cohen

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David Cohen