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Women Are (Slowly) Gaining Board Seats

June 8, 2022

Last April, we published a first-of-its-kind board benchmarking study that examined the composition and demographics of private company boards in the United States. Our analysis of 170 companies revealed that 86% of director seats were held by men, and four out of five seats were held by individuals who are White.

Over the past several years, there has been a lot of public attention surrounding board diversity, including a myriad of studies, legislative attempts, and organizational commitments that set out to correct this disparity.

We wanted to know: Is anything really changing?

So we asked again, polling the same set of companies who participated in our study last year. We were informed that 29 companies had made changes to the composition of their board of directors in the past year, adding a total of 38 new directors to boards.

While overall representation on boards is still skewed largely White and male, the demographic profile of these newly appointed board members looks refreshingly different from the norm, indicating that CEOs are making intentional changes to their board composition.

Here’s a deeper look at what we found:

Open Seats Aren’t Filled Immediately

One year ago, 90 companies indicated that they intended to fill an open board seat in the next 12 months. From the response data, only 20% of those companies (18) actually added a new director. This data, plus anecdotal evidence, tells us that open board seats tend to remain unfilled for months, if not years, because there is not always an urgency to drive a search from start to finish. That’s one of the problems we are setting out to solve through our work on board placements at Bolster.

Half of New Board Placements Were Independent Directors

Of 38 board members added to boards in 2022, 19 were independent directors, 16 were investor directors, and 3 were management directors. We continue to believe that CEOs can lean into independent director positions as an opportunity to change the demographic composition of their boards. When in doubt, follow the startup boards “rule of thumb” from our CEO Matt Blumberg: 1 independent director for every 1 investor, and only 1 management director on a board.

Women Are Gaining Board Seats at 2x the Usual Rate

Independent directors made up half of the new directors added in 2022. Women accounted for 58% of newly added independent directors and 37% of all newly added directors. That compares favorably to last year’s study, in which women represented only 37% of independent directors, and only 14% of all directors.

Notably, CEOs who changed their board composition were more inclined to remove directors who are White and Male; of directors removed or replaced on boards in the past year, 83% were male and 80% were White.

Boards Are (Slowly) Diversifying the Race & Ethnicity of Directors

Non-white directors accounted for 32% of new independent directors and 24% of newly added directors overall. This is a small increase in the spread of racial & ethnic representation compared to our study last year, where we found that non-White individuals held 21% of independent director seats and 21% of directors overall.

We look forward to continuing our work of uncovering the inner workings of board composition, structure, and diversity. We’ll be surfacing more insights & best practices around board composition in the June 15 release of Startup Boards: A Field Guide to Building and Leading an Effective Board of Directors, of which Bolster CEO Matt Blumberg is a co-author along with venture capital investors Brad Feld and Mahendra Ramsinghani.

If you are interested in working with Bolster on an upcoming or current board search, read more about our approach here.

-Bethany Crystal, June 8, 2022.