This week, California became the first state to require public companies to have at least one woman on their boards, but the public tech companies in the Triangle still lag behind in the gender diversity of their boards.
When compared to large tech companies headquartered outside of North Carolina but with large local presences, like Cisco and IBM, homegrown public companies don’t currently measure up in terms of the number of women on their boards.
Three publicly traded tech companies in the region — Bandwidth, ChannelAdvisor and Red Hat — have a total of just three female directors out of 21 total directors. Red Hat has two women board members (out of nine), ChannelAdvisor has one (out of seven), while Bandwidth currently seats no women on its five-person board.
Both IBM and Cisco, meanwhile, have three women on their boards out of 13 and 11 total directors, respectively. That equates to 25% female representation compared to 11.1% for the three Triangle companies.
The new California law requires public companies to have at least one woman on their board by the end of 2019, and boards with six or or more members must have three women by the end of 2021. Companies that fail to meet these standards will face a $100,000 fine for a first offense and a $300,000 fine for each additional year of non-compliance.
If a law similar to this were passed in North Carolina, Bandwidth — which only went public in November 2017 — would not be in compliance, and all three local tech companies would need to increase female representation on their board by 2021.
The California law isn’t just about altruism and improving opportunities for women. Studies have shown that including more women on the boards of public companies yields positive results, according to MarketWatch. A study by MSCI — a financial planning firm based in New York City — showed that companies with at least three women on their boards had a 1.2 percent median increase in employee productivity.
Having more women on a company’s board also improves the bottom line. MSCI found that companies with three women or more on their boards saw a median gain of 10 percent in return on equity and a median gain of 37 percent in earnings per share.
Although the three Triangle companies lacked significant gender diversity on their boards, the problem isn’t limited to this region but rather an example of a broader problem. MarketWatch reported in May of 2017 that women made up just 16 percent of board members for companies in the Russell 3000, an index tracking the broad U.S. market.
It’s an issue that the area’s public tech companies are seeking to address. For instance, ChannelAdvisor’s general counsel, Diana Allen, said that the company welcomes different perspectives on its board.
“ChannelAdvisor was thrilled when Janet Cowell, the former Treasurer of the State of North Carolina and the first woman to hold the office, joined our Board in 2016,” Allen said in a statement. “When evaluating potential directors, our Board considers diversity, including gender, to ensure a wide range of perspectives.”
Allen also wrote that gender diversity extends beyond the board room at ChannelAdvisor: “We have four seasoned women executives on our executive team: Amy Robertson, Chief People Officer; Melissa Sargeant, Chief Marketing Officer; Beth Segovia, VP Services; and me.”
Bandwidth and Red Hat did not immediately respond to a request for comment.