When it comes to parity in technology, it’s no secret there’s a massive gender gap. Despite being 47% of the labor force, women only account for 24% of all technology positions. Specific to the European market, the UK sees only 19% of the tech workforce filled by women and the EU only 17.5% on average. Diversity in leadership and the boardroom show a similarly daunting gap, with only 20% of board seats held by women in 2020.
That being said, as societies and companies prioritize equality and gender representation, we’re seeing these figures improve. In fact, data from this year shows that 51% of companies now have a female board member, up from just 40% a year earlier. What’s more, during the same time period, the number of females on board grew–from 7% to 11%.
While moving in a positive direction, this data is reflective of public companies. What’s not said in the data is the private, non-reporting sector (start-ups, scale-ups, etc.) have a wider gender gap than public companies. And let’s be honest, 11% is still a wide deficit.
While the progress made thus far is encouraging, we’re surprised at the slow pace. Companies know they’ll reap rewards when bringing different perspectives to the board. Research tells us that diversity in the boardroom helps mitigate the issues surrounding “groupthink”. From All Raise’s 2020 Annual Report:
Gender parity at the board level enables the most senior decision makers of a company to reliably lead their companies to innovate, execute and ultimately, be successful. But to successfully achieve gender representation in the boardroom, there must be a larger pipeline of candidates to fill board seats.
At Sapphire Ventures, we’ve seen this problem firsthand. Our investors are oftentimes board members and our value-add Portfolio Growth team frequently works with our portfolio companies to think through their board strategies and ways in which to diversify directors and observers. As such, we feel we’re intimately aware of the impact of a diverse board and our team is working hard to bridge the gap.
For example, Sapphire co-architected All Raise’s Board Xcelerate with Sequoia Capital and GGV to diversify the boards of high-growth tech companies. To help further uncover diverse board talent, we’ve kicked off a board-readiness campaign featuring regular workshops beginning in 2019, for aspiring diverse board members in our CxO network. The goal of these workshops is to build a pool of qualified, female board executives to fill the influx of board opportunities with diverse leadership. The campaign has led to board placements such as Wendy Pfeiffer, CIO of Nutanix, who discovered her first board role via Sapphire.
In mid-October, we held our first board-readiness workshop in Europe. We walked away with some insightful trends and best practices on how to make that first board leap from our panel of board directors, CEOs and recruiters representing companies such as KPMG, Facebook, Blackstone, Tom Tom, Matillion, SAP and Volkswagen that we wanted to share here:
The power of the network
To secure your seat, you must leverage your connections in the smartest ways possible. Ensure that you’re connected with directors who are “boarded up,” heads of talent at VC firms (for venture-backed, privately held boards), and recruiting firms like True Search and Erevena.
At our event, several speakers emphasized the differences between a board search and the search for an executive or operating role. In both cases, candidates must showcase their background and unique talents. However, since close to 50% of board appointments happen through personal networking, word of mouth, shareholder suggestions and other informal channels, figuring out how and with whom you connect in this case is critical to success.
As the saying goes, it’s not only what you know, it’s also who you know. To the qualified board candidate, networking can be the biggest catalyst to landing a board interview. Diverse board candidates that have strong networks (like the one Sapphire Ventures is building) are well-equipped for landing first introductions.
Landing the interview and beyond
According to our panelists, and somewhat of a surprise to us, interviewing for a board seat is not that different from a regular job interview.
According to Angelika Huber-Strasser of KPMG, “the process can be as intense as a job interview with multiple conversations and presentations, but might go more quickly than a non-board process.”
As a first step, make sure to have a strong board bio and have workshopped it with your network. It’s effectively a CV, only different. It defines your personal brand and says in what areas you’re considered to be an expert. Additionally, it outlines what strengths you’ve developed that a board would value. Where résumés tend to be organized chronologically and describe in detail an individual’s past roles, board bios do not. They are one page, include a photograph, are written in the third person and don’t provide a list of past positions. The focus is on a person’s value proposition and personal brand.
From there, remember that securing your first board role is tied to more than just an interview. Aligning to the company’s needs and the CEO’s is of increasing importance–as with private boards the CEO relies heavily on their board for guidance on maintaining the rapid growth of the business.
Often the CEO sets the tone for the board’s culture, but as we heard from our workshop, sometimes that can be an issue. Culture of a board can require change to accommodate new, diverse board members. It’ll take some intrepid executives to help change that culture and pave the way for future members who might not be as adaptable. From research done by Ernst & Young, boards can help set a tone for culture at a company by embodying the same ideals.
Board onboarding is a must
Deepa Gautam-Nigge, a Senior Director of M&A at SAP, mentioned how onboarding for board roles is a priority. “Ask for onboarding when you join a board. Meet the company executives, get comfortable with the culture and read the documents that can help you understand how the company works today. You can’t help change an organization for the better if you don’t understand where they are coming from.”
There won’t necessarily be KPIs that you can attribute success or failure to, but that’s OK. CEOs want to know less of how you’re operating, and more of how you’re thinking. Can you help the company grow faster? Can you advise on a specific pain point the company is going through? Are you able to absorb what the company is doing now to see the short and long-term opportunities for success? You gain this from in-depth onboarding, which, unlike a full-time job, is not something to assume is part of the process.
Serving the board, the CEO & yourself
A common mistake of a new board member is running before you can walk. When you first join a board, it’s easy to do too much too fast. This issue is especially common amongst diverse board members. The advice coming out of the workshop was simple: take your time, learn how the board operates, find a mentor and figure out what your sweet spot is so that you can pounce on opportunities to shine.
At our workshop, we showcased insights from existing board members, recruiters and CEOs. One takeaway from our CEOs is the relationship between a board and the company’s leader. Knowing when oversight turns to overstepping is the sign of a thoughtful board leader. CEOs are eager to help guide board directors to actions that are helpful and those that are not. The simple truth of it is the CEO is aware that the board is their “manager” (to use a simple analogy), so it’s important to treat the CEO with the same care and respect you would direct reports.
Lastly, it was noted by our lineup of experts that you should know when a board opportunity has run its course. Based on a study by Spencer Stuart, the average tenure of a board member is just over 4 years. Whether it is an over-extension of responsibility, compensation or a realization that your skills no longer match the needs, resigning from a board is not something to fear. In fact, it shows great insight into how your professional career is progressing and where opportunities for growth and change exist.
Looking ahead
At Sapphire, we think the path towards board parity requires a lot of work, and it begins with training. As we move into 2022, the team at Sapphire Ventures is excited to host more board readiness events each quarter with a focus on growing our diverse candidate pool. The need to further diversify boards is becoming even more important as Germany and other EU nations move to pass legislation on gender parity in the boardroom. This means more room for first-time board leaders as the population of qualified board members tries to keep pace.
If you’re interested in learning more about Sapphire Ventures’ diverse board candidate endeavours, please contact [email protected] to get involved.
