Two surprising events have punctuated disappointing news in connection with gender diversity in the corporate world. First, as Facebook prepares to launch perhaps the most anticipated Initial Public Offering (IPO) EVER, news emerged in recent months that Facebook's Board of Directors is populated with seven male directors (out of seven), meaning zero female directors. For a company perceived to be on the very cusp of forward-thinking business modeling, this lack of gender diversity on the Board has attracted the attention (and raised the ire) of institutional investors.
Per the Wall Street Journal article California Pension Fund Challenges Facebook Over Diversity on the Board: "In a letter addressed to Facebook Chief Executive Mark Zuckerberg on Tuesday, California State Teachers' Retirement System Director of Corporate Governance Anne Sheehan wrote that, 'We are disappointed that the Facebook board will not have any woman members. This is particularly glaring at a time when there is clear evidence that companies with diverse boards perform far better than the companies with more homogenous boards,' Sheehan wrote."
Per the Forbes article Why Long-Term Investors are Worried About Facebook's Lack of Board Diversity: "Although Facebook has received a lot of positive attention for its inclusion of a woman, Sheryl Sandberg, as its Chief Operating Officer, the company has not appointed a single female candidate to its board, a characteristic that makes it a lot like other major U.S. companies that have zero women on their boards such as Urban Outfitters, Under Armour, and Zale, the diamond company. According to a recent report by GMI Ratings, the corporate governance research firm, 40% of the U.S.’s largest publicly listed companies don’t have any women on their boards. Facebook, though, has attracted an unusual amount of attention."
It is difficult to imagine how in 2012 Facebook, Urban Outfitters, Zale's and 40% of the largest publicly listed companies in the U.S. do not have a single female board member. This failure appears to be an enormous disconnect between emerging evidence supporting the fact that diversity increases success and profit of a corporation and the continuing survival of the old boys' network (or the new boys network in Facebook's case). Can this failure amount to a duty of care breach (gross negligence in a Board failing to inform itself)?
To this lack of gender diversity on corporate boards, Facebook Chief Operating Officer Sheryl Sandberg (not on the Board) opined in PCMag.com: "'I really think we need more women to lean into their careers and to be really dedicated to staying in the work force. I think the achievement gap is caused by a lot of things. It's caused by institutional barriers and all kinds of stuff. But there's also a really big ambition gap,' Sandberg said. 'If you survey men and women in college today in this country, the men are more ambitious than the women. And until women are as ambitious as men, they're not going to achieve as much as men,' she added."
Second, as the Masters Golf Tournament wrapped up Sunday with its thrilling overtime finish, the question of whether the all-male Augusta National Golf Club would invite IBM's new female CEO, Virginia Rometty, to become its first female member, remained unanswered. IBM is one of the Masters three primary corporate sponsors (along with AT&T and ExxonMobil). Augusta National, which hosts the Masters, has offered the past four IBM CEO's membership (all men), but has refused to date to extend an invitation to Ms. Rometty who took over as CEO at the beginning of 2012.
Of course, Augusta National has had a problem with exclusion for decades. It was not until 1990 that the club admitted its first male African American member. Rometty was in attendance at the tournament on Sunday for the exciting finale, with her status as one of the most powerful CEOs in the world cemented and on clear display, despite the fact that she, by nature of her gender, has not been invited to become a member of Augusta National. While Augusta National remains a private club, and outside the Constitutional mandates forbidding discrimination, many believe it is time for Augusta National to admit women, particularly the powerful CEOs of its major corporate sponsor.
(Photo of Sheryl Sandberg (top), Facebook COO, courtesy of Wikimedia Commons; Photo of Virginia Rometty (left), CEO of IBM, courtesy of Wikimedia Commons)