Sukhinder Singh Cassidy, founder and chairman of e-commerce startup Joyus, has the toughest job in Silicon Valley. It isn’t her day job of marketing fashion, beauty and lifestyle products in a crowded online retail marketplace. Her real challenge is a campaign to convince the predominantly male leadership at tech startups and companies that there is a deep and accessible pool of female executive talent ready and able to fill half of the seats on their board of directors.
By the numbers, Ms. Cassidy faces a daunting challenge—70 percent of U.S. tech companies included in the 2017 survey of startups by Silicon Valley Bank do not have a woman on their board of directors. Despite all conferences and commitments to diversity, that’s 2 percentage points less diverse than the 68 percent reported for the 2015 report. In terms of their executive ranks, 54 percent of the startups acknowledged there were no women in their C-suite positions, essentially unchanged since 2015.
Other industries, including telecommunications companies, have a better track record of ensuring a diverse group of people are represented on their corporate boards, including women and minorities. Last year, USTelecom’s board included two women including Darby McCarty of Smithville Communications in Indiana, who chairs our Executive Committee.
To make the job of matching talented women to board openings a lot easier for search committees, Ms. Cassidy founded theBoardlist, a curated talent marketplace to help business leaders recommend, discover and connect highly qualified women across industries with opportunities to serve on the boards of tech companies.
Since its founding in July 2015, 45 candidates on theBoardlist have been placed on the boards of tech companies. In the 4th quarter of 2016, theBoardList took credit for 9 of the 23 open board seats at tech companies that were filled by women.
"When a board seat opens, the typical process is that a CEO will turn to their few, most trusted peers for recommendations of potential board members, who in turn give recommendations of their few, most trusted peers," Ms. Cassidy told Business Insider.
In a recent survey by theBoardlist, women who were looking for board seats overwhelmingly said their biggest obstacle was search committees that didn't look outside their own mostly-male networks.. Bias against women, an often cited reason female executives don’t get offers to sit on boards, was rated as their distant second concern.
Diversity in the boardroom isn’t just the right thing to do, it’s also good for business, research shows. Catalyst, a nonprofit dedicated to expanding opportunities for women, found that companies with the highest percentages of women board directors out performed those with the least across three key financial measures:
- Return on Equity: a 53 percent improvement in the amount of profit a company generates with the money shareholders have invested
- Return on Sales: a 42 percent improvement in the profit being produced per dollar of sales
- Return on Invested Capital: a 66 percent improvement in how well a company is using its money to generate returns
The connection between board diversity and corporate performance held up across most industries—from consumer discretionary to information technology.