Crunchbase, Him For Her, and Kellogg School of Management Unveil Benchmark Study of Gender Diversity in the Boardroom of Private Companies

SAN FRANCISCO, Dec. 11, 2019 /PRNewswire/ -- Sixty percent of the private companies studied lack a single female board member, according to a benchmark report released today by Crunchbase, Him For Her, and the Kellogg School of Management. The collaborative study of gender diversity in the boardroom analyzed 200 venture-backed private companies based in the United States, each with nearly $100 million or more in funding or a valuation over $500 million. Findings revealed a dramatic gender imbalance in the boardroom.

Multiple studies track the progress of gender diversity among the boards of U.S.-based public companies. However, the gender composition of private company boards has largely been ignored despite the fact that public companies represent just 1 percent of U.S. businesses. The new benchmark study was created to shine light on the gender disparity in private company boardrooms and create a baseline for tracking improvement.

Notable findings from the study include:

• Of the private companies analyzed, 60 percent did not have a single woman board member. By contrast, not one board among the S&P 500 is all-male.
  
  
• Only 7 percent of the 1,364 board seats across the private companies studied were held by women. For public companies, women hold 26 percent of board seats among the S&P 500 and 20 percent among the Russell 3000.
  
  
• The lack of gender diversity on the boards of venture-backed private companies reflects the lack of gender diversity among company founders and funders, who compose roughly 80 percent of the board seats studied.
  
  
• Most female directors are "only's." Ten percent of the companies studied had more than one woman on the board.
  
  
• While research suggests that boards need three women to capture the full economic benefits of diversity, fewer than 2 percent of the companies studied met this criteria.

The study, which analyzed board members by type — executive directors, investor directors and independent directors — found that women were underrepresented in every category. Investors made up the largest number of private company directors with 56 percent of seats, and only 5 percent of those were held by women. Executive directors were the second largest group with 24 percent of board seats, of which women held only 4 percent. Independent directors accounted for the smallest group, with 20 percent of seats.

For independent directors, the gender mix was slightly less extreme, pointing to the opportunity some companies are taking to introduce more diversity to the boardroom through the addition of independent seats. Yet roughly a third of companies studied did not have an independent director on their board. Of the board seats held by women, half were independents; however, only 19 percent of all independent directors were women.

"Most business leaders today recognize that board diversity leads to better outcomes. And yet, the way boards are built tends to reinforce the status quo," said Ann Shepherd, co-founder of social impact venture Him For Her. "We undertook this study with Crunchbase and Kellogg School because you can't change what you can't measure. We hope these findings will inspire CEOs and board directors to look beyond their personal networks to see the wealth of talented women ready for board service."

"Crunchbase has reported on female founder trends and women in venture since 2015 when we added gender to our dataset. In order to promote change, we believe it's important to benchmark and continually measure leadership demographics across private companies," commented Gené Teare who leads Strategic Research at Crunchbase. "This study is particularly important because it broadens our existing research to measure the role women play on private company boards and establish a baseline to measure progress."

"The study provides an unprecedented look into gender diversity (and the lack thereof) on the boards of the country's most successful venture-backed private companies," said Lauren Rivera, Associate Professor of Management & Organizations, Kellogg School of Management. "It also calls attention to the power of legislation and reporting requirements in driving boardroom diversity."

The full report can be found here.

Methodology
The study analyzed 200 heavily funded private U.S.-based companies to understand the composition of their boards as of Q3 2019. For comparative purposes, the study also analyzed the boards of 98 tech companies which completed an initial public offering between January 1, 2018 and June 30, 2019.

Leveraging the Crunchbase database, the top 1,000 U.S.-based, venture-backed private companies were identified based on cumulative funding. Those selected for the study each raised nearly $100 million or more and were founded since 2004 and/or had valuations of $500 million or greater. To ensure that each company's board profile was current, only companies which published their board of directors on their website were included in the study.

About Crunchbase
Crunchbase is the leading provider of private-company prospecting and research solutions. Over 55 million users—including salespeople, entrepreneurs, investors, and market researchers—use Crunchbase to prospect for new business opportunities. And companies all over the world rely on us to power their applications, making over 3 billion calls to our API each year. To learn more, visit about.crunchbase.com/ and follow us on Twitter @crunchbase.

About Him For Her
Him For Her is a social impact venture aimed at accelerating diversity on corporate boards. It engages leading "Hims" to introduce the world's most talented "Hers" to board service. Since its founding in May 2018, Him For Her has provided thousands of warm introductions to board-ready women through 29 curated dinners across 10 U.S. markets and London, hosted by business luminaries such as Scott Cook, Reid Hoffman, Brad Smith and Jeff Weiner. For CEOs looking to build their boards, Him For Her taps its talent network to identify exceptional candidates who can bring new competencies to the boardroom. Him For Her board referrals are provided free-of-charge, and our work is supported by the generous contributions of donors and sponsors. Him For Her is a 501c3 corporation.

About Kellogg School of Management
The Kellogg School of Management at Northwestern University is a premier global business school committed to its mission to educate, equip and inspire leaders who build strong organizations and wisely leverage the power of markets. Based just outside of Chicago, our vibrant, global community of faculty, staff, students and alumni shapes the practice of business and organizations around the world. Kellogg offers an innovative portfolio of programs: five Full-Time MBA programs including the accelerated One-Year MBA and Two-Year MBA options, and joint degree programs with the engineering, medical and law schools; an Evening & Weekend Program; the Executive MBA global network; a Master of Science in Management Studies; and extensive non-degree Executive Education programs. To learn more, visit www.kellogg.northwestern.edu and follow them on Twitter @KelloggSchool.

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