The percentage of all-male boards in private venture-backed startups have been cut by half over the last four years, according to a new report. But there’s still a long way to go to achieve gender parity on boards.
The 2022 Study Of Gender Diversity On Private Company Boards, carried out by social impact venture aimed at accelerating diversity on corporate boards Him For Her in partnership with Crunchbase, revealed that the percentage of all-male boards amongst heavily funded US private companies dropped to 32% from 60% (in the inaugural 2019 report).
That said, while the share of board seats held by women has more than doubled since the annual tracking study was launched in 2019, women are still missing from the boardrooms of nearly a third of the companies studied. The study, which analysed board members by type – executive directors, investor directors and independent directors – also found that women continue to be underrepresented in almost every category.
Among the trends brought to light by this multi-year study is a shift in board composition. The percentage of board seats held by investors – of whom 12% are women – declined steadily from 56% in 2019 to 47% in 2022. Over the same period, independent director seats – of which 28% are held by women – increased from 20% to 31%. Executive directors account for the smallest and most stable group with 22% of board seats, of which women hold only 9%.
MORE WOMEN DIRECTORS
Although the study found that women of colour now hold 4% of board seats, up from 3% the year prior, more than three-quarters of company boards still do not have a single woman of colour. However, women of colour outnumber men named Dave in the boardroom for the first time, the report noted.
“The dramatic reduction in the number of all-male boardrooms is largely driven by the appointment of women as independent board directors,” stated Ann Shepherd, Co-founder of Him For Her. “These women not only contribute new perspectives but they bring deep operating experience, key competencies and relevant industry expertise to help these companies achieve their next phase of growth.”
KEY FINDINGS
Key findings from the new 2022 study reveal that:
- Nearly a third (32%) of companies don’t have any women on their board. That’s an improvement from 39% in the prior year and 60% in 2019. The companies with all-male boards represent $56 billion in funding and employ more than 78,000 people.
- Women hold 16% of board seats among the companies studied. That’s up from 14% in 2021 and 7% in the inaugural study in 2019.
- Between 2019 and 2022, women gained an average of just over half a board seat (0.6). Women now represent roughly 1 out of 7 board members.
- Only 4% of all directors are women of colour, reflecting a slight improvement from 3% in the prior year.
- For the first time, the number of women of colour surpassed the number of board members named “Dave.”
- More than three quarters of company boards (76%) do not include a single woman of colour.
- Women are most likely to occupy an independent director seat (54%), compared to an investor director (34%) or executive director (13%) seat.
- Investor directors hold fewer than half of board seats (47%, down from 56% in 2019), as independent directors command a larger board footprint (31%, up from 20% in 2019).
- Companies with at least one woman on the board have raised on average 16% more in cumulative funding than firms without any women board members.
- Life sciences companies outperform technology companies on board-diversity metrics.
GENDER DISPARITY ON COMPANY BOARDS
Multiple studies track diversity among the boards of US-based public companies. However, the composition of private company boards has largely been unreported despite their considerable influence as innovators and employers. This ground-breaking benchmark study, originally published in December 2019, was created to shine a light on the gender disparity in private company boardrooms. It also aims to create a baseline for tracking improvement. The latest annual report analyses board diversity in 2022 and measures progress compared with the three prior years.
”Over the course of four years conducting this study and analysing the data, we’ve seen a remarkable amount of progress,” said Gené Teare, Senior Data Editor at Crunchbase. “While this should absolutely be celebrated, we don’t want to lose sight of how far companies still have to go. Women still only make up roughly one out of seven board members. Only 4% of all directors are women of colour. Our hope is that these numbers continue to tick upward in the years ahead.”
Click here to read the full report.
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