After going public on November 7, Twitter added the first woman to its board: Marjorie Scardino, the former CEO of the education company Pearson.
The company came under criticism for its all-male board in the lead up to its initial public offering and made it a top priority to add a woman to the group. It had been reportedly seeking someone from media or tech, and Scardino fits the bill, not just in overseeing Pearson’s ownership of the Financial Times but also in serving in several roles at The Economist, including CEO, and serving on the board of Nokia.
Twitter wasn’t alone in having a male-only group on its board, particularly in tech. Facebook added its first female board director this summer, COO Sheryl Sandberg, and Zynga also just named the first woman to its board, Ellen Siminoff, CEO of Schmoop. Groupon has one female board member. Technology companies in general tend to have heavily-male dominated boards, as 49 percent of the companies on the Russell 3,000 index have no women on their boards and 48 percent have just one or two. That leaves just 3 percent with more than three.
While technology companies may be particularly slow to add women to their boards, the problem dogs many American firms. Women hold just 17 percent of the board seats on Fortune 500 companies and no progress has been made in increasing that share in seven years. One in ten doesn’t have any women on their boards at all.
Adding more women to boards makes business sense, however, particularly for tech companies. The majority of Twitter users, for example, are women, something that holds true for social media companies generally. Companies may be better served in reaching out to their diverse users if their leadership is also diverse.
But for all companies, there is plenty of evidence that increasing gender diversity on boards pays off. Those with women on their boards see their stock prices outperform those that don’t — in one study they outperformed them by 26 percent over six years. They also have significantly better returns. Female board directors have been found to make decisions that are better for company performance and value.
The lack of women on boards is global: women hold just 11 percent of the board seats at the biggest companies around the world, which has increased by just 1.7 percentage points since 2009. To combat the problem, many countries have instituted gender quotas, something that began with Norway’s 40 percent requirement and spread to Belgium, France, Italy, the Netherlands, and Spain, and Germany will soon join them. The European Union may also soon have a requirement for all member countries. And while the United Kingdom doesn’t have requirements, it does have a 25 percent target and reporting requirements. These measures have had a big impact on increasing women’s numbers. In the U.S., by contrast, there are just a few rules that companies report their efforts to increase diversity that most flaunt anyway.
Twitter also has few women on its executive team, with just two out of 12 members: the vice president of human resources and the general counsel. The numbers in tech are dismal: women make up just 6 percent of the CEOs at the top 100 technology companies. And again, it’s true of most American companies: just 22 out of the Fortune 500 have female CEOs.