Gender Diversity at Silicon Valley Public Companies 2014

Fenwick & West has released its annual study about gender diversity on boards and executive management teams of companies in the technology and life science companies included in the Silicon Valley 150 Index and very large public companies included in the Standard & Poor’s 100 Index. [1] The Fenwick Gender Diversity Survey uses almost twenty years of data to provide a better picture of how women are participating at the most senior levels of public companies in Silicon Valley.

This year’s survey also introduces the Fenwick Gender Diversity Score™, a metric for assessing gender diversity overall within each of the indices. This composite score is based on data at the board and executive management level in the SV 150, top 15 companies of the SV 150 by revenue, and the S&P 100 over the nineteen years surveyed and in a set of categories selected as representative of the overall gender diversity picture.

Key takeaways from the survey include

Growth rates remain low.

• The representation of women on boards continues to increase in the U.S. but at lower rates than in other countries. The average percentage of women directors increased one percentage point in each index with the SV 150 increasing to 10.0% and the S&P 100 increasing to 20.9% in 2014 (with the top 15 companies in the SV 150 increasing 1.3 points to 15.7%). However, in the SV 150, the percentage of companies with at least one woman director increased 5.3 points to 62%, and in the S&P 100, 100% of companies now have at least one woman director, a 2 point increase from last year.
• The representation of women on executive management teams remains low, with most of the data showing small decreases or flat results. For example, in the SV 150, the percentage of companies with at least one woman executive officer decreased from 54.7% in 2013 to 53.3% this year, while the percentage in the S&P 100 remained flat at 84%.

Size continues to matter.

• Larger companies by revenue and market capitalization tend to have larger boards and executive management teams, which tend to be more diverse.
• Gender diversity numbers for the top 15 companies in the SV 150 are generally closer to those of the S&P 100, which are essentially their peers in terms of scale.

Except in the top 15 of the SV 150, women CEOs do not have greater gender diversity on their boards and executive teams than men serving as CEOs.

• The top 15 of the SV 150 have a significantly higher percentage of women executives and “named executive officers” (NEOs) when the CEO is a woman compared to the full SV 150 and the S&P 100.
• Women CEOs in the top 15 of the SV 150 have a significantly higher percentage of women executives, women NEOs and women serving as committee chairs than their male counterparts; but men and women CEOs have relatively similar numbers in the full 150 and the S&P 100.
• In the S&P 100 and the full SV 150, women CEOs do not appear to coincide with increased presence of women in boardrooms or executive suites. There is only one woman CEO in the top 15 of the SV 150, so these differences may be an outlier.

S&P 100 shows highest Fenwick Gender Diversity Score™, while SV 150 has highest rate of growth.

• The S&P 100 had the highest gender diversity score, based on data from 1996 to present, followed by the top 15 of the SV 150, and then the full SV 150.
• The SV 150, however, had the highest gender diversity growth rate over the survey period.

Top legal and marketing executive positions continue as most diverse.

• General counsel and top non-sales marketing positions were the most diverse positions in the SV 150 and S&P 100.
• President/top operations executive was the most diverse position in the top 15 of the SV 150.

As discussed in the post for last year’s edition, the gender diversity survey evolved out of a study of corporate governance more broadly, for which the norms of the S&P 100 companies are often held out as best practices. However, as noted above, size is a significant factor in the diversity statistics studied. Consequently, the broad range of companies in the SV 150 (whether measured in terms of size, age or revenue) is associated with a similarly broad range of gender diversity. Comparison of gender diversity statistics and trends for the top 15, top 50, middle 50 and bottom 50 companies of the SV 150 (in terms of revenue) [2] bears this out. As a result, throughout the survey we compare the top 15 of the SV 150 to the S&P 100 because the top 15 are more similar in size to the S&P 100 and therefore a more apt comparison group than the full SV 150. The survey also includes data broken down by the top 50, middle 50 and bottom 50 of the SV 150 (by revenue) in a variety of categories.

Full Coverage:

For each of the S&P 100, top 15 of the SV 150 and the full SV 150, the 74 page report includes detailed analysis of:

• gender diversity on the board of directors
• gender diversity on board committees, including audit, compensation, nominating and other standing committees
• gender diversity in board leadership, including board chair, lead director and committee chairs
• gender diversity on the executive management team, including among executive officers, “named executive officers,” and various specific positions (CEO, president/top operations executive, CFO, general counsel, top technology/engineering/R&D executive, top sales executive, top marketing executive and top corporate/business development executive)

The complete Fenwick & West 2014 Gender Diversity Survey is available here.

Endnotes:

[1] The S&P 100 is a cross-section of companies across industries, but is not a cross-section of companies across all size ranges (it represents the largest companies in the United States). While the SV 150 is made up of the largest public companies in Silicon Valley by one measure—revenue, it is actually a fairly broad cross-section of companies by size, but is limited to the technology and life science companies based in Silicon Valley. Compared to the S&P 100, SV 150 companies are generally much smaller and younger, have lower revenue. The 2014 constituent companies of the SV 150 range from Apple and Hewlett-Packard (HP) with revenue of approximately $174B and $112B, respectively, to Pericom Semiconductor (Pericom) and Nimble Storage (Nimble) with revenue of approximately $127M and $126M, respectively, in each case for the four quarters ended on or about December 31, 2013. HP went public in 1957, Apple in 1980, Pericom in 1997 and Nimble in 2013. Apple and HP’s peers clearly include companies in the S&P 100, of which they are also constituent members (nine companies were constituents of both indices for the survey in the 2014 proxy season). Pericom and Nimble’s peers are smaller technology companies that went public more recently and have market capitalizations well under $5B. In terms of number of employees, the SV 150 averages 8,772 employees, ranging from HP with 317,500 employees spread around the world in dozens of countries to companies such as Ubiquiti Networks with 183 employees in five countries, as of the end of their respective fiscal years 2013. The S&P 100 averages 134,000 employees, including Wal-Mart with 2.2 million employees in more than two dozen countries at its most recent fiscal year-end.
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[2] The top 15, top 50, middle 50 and bottom 50 companies of the SV 150, include companies with revenue in the following respective ranges: $6.2B or more, $1.4B or more, $315M but less than $1.3B, and $126M but less than $314M. The respective average market capitalizations of these groups are $118B, $44B, $3.1B and $1.6B.
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