Why Facebook’s IPO Matters to Women

Beth Stewart, CEO of Trewstar Corporate Services, published this article about the campaign in the Glass Hammer.  We think it’s so great that we’ve copied and pasted it for you to read here!

“Why Facebook’s IPO Matters to Women”

February was a tough month for women.  At a House committee hearing, a panel of five men expounded on religious liberty—in the context of President Obama’s compromise plan on insurance coverage for contraception. In Oklahoma, protesters rallied against Republican Senator Dan Newberry’s bill that would require a woman to hear the fetus’s heartbeat before a doctor could perform an abortion.  Facebook announced a $5 billion IPO without a single woman on its board. But, unlike the House committee hearing, or the Oklahoma personhood bill, the public outcry against Facebook’s board was anemic.

A group of young women—two journalists, one paralegal, and a Rhodes Scholar—decided to do something about it. They wanted to use Facebook, not to topple Arab governments, but to create meaningful change in corporate America—change that has not occurred for years, despite the articles, conferences, and commitments to do better.

They could see no reason for Facebook not to expand its board to include women. Study upon study has shown that when boards include women, attendance at board meetings improves, audits occur more frequently, and equity—the shareholders’ investment in the company—grows.

Further, women on Facebook’s board could generate positive publicity for Facebook as a leader in corporate governance as it has been in so many other areas of our society.

In his Letter to Investors, CEO Mark Zuckerberg referred to Facebook’s role in the Arab Spring, saying that the site should “empower people” to seek an alternative to the “monolithic, top-down structure that has existed to date.” The young women wondered: Shouldn’t Facebook’s top management structure be less monolithic, too?

Finally, it would be good for society. They saw the composition of Facebook’s board as a problem—but also an opportunity. Catalyst, celebrating its 50th year this week, has shown that the percentage of women on corporate boards has remained constant at 15-16 percent over the last six years. But it’s not just senior women in business. Other research shows that the same is true in governmentmedicinelaw, and Hollywood.

“The only argument anyone gave against the campaign was that Facebook should be able to decide its board members for itself,” said Alice Baumgartner, a graduate student in Latin American history at Oxford, and one of the campaign’s founding members. “I thought that wasn’t very convincing, since it was the same argument white businessmen gave during the civil rights era to explain why they didn’t need to hire black employees. Liberty for themselves was more important than the right of all, black and white, men and women, to equal employment.”

Alice and her friends decided to launch a campaign that would start a conversation across the world—not just about Facebook’s board, but about those making decisions across all industries and professions. They decided that using Facebook to out Facebook would be an opportunity to bring positive change to corporate boards and maybe to all senior management practices.

At the beginning of March, Alice—who, in the interest of full disclosure, is a friend of my son’s—approached me about the campaign. She knew that I had just started my own company, Trewstar Corporate Board Services, Inc., whose sole focus is placing qualified women on corporate boards, and that I had written to Sheryl Sandberg, asking her about Facebook’s board. Alice thought that I might be interested in advising the campaign.

Campaigns make women my age nervous. We have families and careers, and can’t risk either, even for causes we believe in. At first, I thought that I could be most helpful by locating qualified women for the board and this would have been easy. But, I realized, there would be no point to this approach if Mark Zuckerberg did not first commit to including women on the board of Facebook.

After listening to their concerns, I did a little more research myself. Facebook is the tip of a deep iceberg: Zynga, Expedia, Hertz, and Duane Reade—among many others—have no women on their boards; Groupon, Apple, and Amazon have only one. Only twenty-four women were added to the boards of Fortune 500 companies last year. At this rate, it would take almost 40 years years to fill 30 percent of Fortune 500 board seats with women. Facebook could lead the way, encouraging the 149 Fortune 500 companies with only one woman and the 56 Fortune 500 companies with no women to each add a woman in 2012. That would be almost ten times the number added in 2011.

Having served on the boards of public companies for almost twenty years, I understood that the usual approach to the issue of women in corporate governance—education, research and networking—is incredibly important. But if we are honest with ourselves, it has not been enough. The question became how to facilitate the success of everyone’s efforts. It seemed that a broad-based coalition was necessary- and something new that was worth trying.

It was in my interest—and in the interest of everyone who cared about women in business—to support this campaign. What is the point of educating people about the issue, if not to give them reasons to do something about it? These young women had a possible solution to our problem: insufficient demand in the face of ample supply of women qualified to serve on corporate boards.

In less than a month, the young women have organized their campaign. Their committee now includes men and women from across the world—from Australia to Europe to the United States to South America. One member, a man, built their website. Another, also a man, put together a YouTube video. They have a blog, a Twitter, a petition, and dozens of graphics to post on Facebook. And a great name: FACE IT.

The campaign launches in the days leading up to April 1. The timing couldn’t be more perfect. One of my favorite posters is an image of Mark Zuckerberg, saying, in reference to the campaign, “Is this a joke?” At the opposite side of the poster is an image of an indignant-looking woman, who says: “Is your board?”

Let’s hope that this campaign will convince Facebook—and other companies like it—that a board without women can’t be taken seriously. Check it out:www.faceitcampaign.com.

Beth A. Stewart is Chief Executive Officer at Trewstar Corporate Board Services, Director of Carmax, Inc. and Former Director of General Growth Properties and AV Homes. Inc. Beth graduated from Wellesley College in 1978 and started her career at Goldman Sachs as one of the first analysts in the investment banking division. After graduating from the Harvard Business School in 1982, she re-joined Goldman Sachs as an associate in the Real Estate Investment Banking division. Since her ‘retirement’ from Goldman Sachs in 1993, Beth has pursued many professional investing and consulting activities in addition to her directorships. She also has been an adjunct professor at the Columbia Graduate School of Business. She has five children (ages 14-23) and one husband.

Beth Stewart


Q & A

madddoggydawg writes on the Huffington Post: “why don’t women just climb the corporate ladder higher instead of complaining about how it’s someone else’s fault”

How much higher do us ladies have to climb, maddoggydawg?   What about Facebook COO Sheryl Sandberg?   What about Hewlett Packard CEO Meg Whitman? And, don’t forget the twenty women listed on Tech Crunch as more than qualified to serve on the board of a tech company.   As Harvard business school professor Clayton Rose says, “Some argue there are not enough people of color or women who have the skill sets to be able to adequately participate on boards.  I’ve looked at this and there’s nothing to that case.

Justin Chan writes on mashable.com: “Seriously, as long as the person (or the board) is talented and qualified, who cares if that’s a man or woman? If you care that much, you are racist.” 
 In 2011, there were 5508 board seats in the Fortune 500.  4620 of them were men.  Do you really believe that those 4620 men are more talented and qualified than any woman? 
Theresacopbehindme writes on Tech Crunch: “men are smarter than women in evry single category.”
OK, guess so.  
AndrewMcGivery writes on mashable.com “IT has long been a male dominated industry mostly because, not meaning to sound sexist, but the average woman just isn’t interested in being in IT.”
Look at Facebook’s board, and you’ll see that most of the directors are not even in IT.  One runs a newspaper.  Another was a former university president. 
ScottWeiner writes on the Huffington Post: “This is stupid. He created the company he get’s to pick the board.”
Scott Weiner, that is the same argument white restaurants owners gave in 1964 to explain why they shouldn’t have to serve black customers.  It was the same argument white businessmen gave to explain why they shouldn’t have to hire black employees.  Liberty for themselves >  justice for all.
But let’s go with it.  You’re a libertarian, right?  Well, Rand Paul argued against the Civil Rights Act of 1964 because it was redundant:  the public outcry against such a business would be so strong that it would have to change.  We’re not asking for quotas, or government intervention. We’re asking for an outcry.  
TwoWAyZone writes on the Daily Beast: “I think that is what women do on boards, they take the fun away.”
Ugh. No more fun! #FML.

Why the Hype about Facebook’s Board is “Just Blabber”

Someone just sent us a link to a blog by Jeff Carter—a self-described “serial entrepreneur, angel investor, and independent trader”—which says that the hype about Facebook’s board is just blabber!  It’s from February, but it’s so good, we had to talk about it here.

To start, Jeff follows a familiar line of argument:  Businesses should not seek out diversity for diversity’s sake but diversity of opinion.  The factors that contribute to the diversity of opinion are class, professional background, and—get this—geography.  (But mind you, not race or gender!) 

By Jeff’s standards, Facebook’s board is diverse.  Their professional backgrounds are varied.  (One runs a newspaper. Another is a former university president.)  They come from different classes.  (Upper and upper-middle, obviously.)  And, they are also geographically diverse.  (Never mind that most are from the East Coast or California.   Marc Andreessen grew up in the Midwest!)

But then Jeff changes his mind entirely.  Perhaps sensing that his readers would find his last argument absurd, he goes on to say that, actually, diversity doesn’t matter at all.   As evidence, he cites a University of Chicago study from—that’s right—1984.  In the study, researchers interviewed more than 60 corporate directors and “found similarities among them no matter what company, gender, or area of the country they were from.” 

So what if Facebook’s board isn’t diverse? It doesn’t matter!

It would have been bad enough if Jeff had stopped there but perhaps giddy with his own irreverence—he describes his blog as “an irreverent look at economics, finance, and politics”—but he continues.

Why aren’t there any women on Facebook’s board, he asks?  According to University of Chicago Professor Ron Burt, whom Jeff cites, the reason is that women are “excluded from the information communication networks among senior managers.”  Jeff does not see this as a problem.  Instead he concludes that women are not on Facebook’s board because of the “differences in the way men and women network.”

He ends with a word of advice to women and minorities:  Duh, just set up “your personal network to place yourself in a spot where you will assume a top role in management.”  Simple as that. 


Thanks, Jeff!  Next time, I guess we’ll just try harder!

Penn., Mass. Dislike White, Male Boards, Too

Yesterday Pennsylvania and Massachusetts announced that they dislike white, male boards, too.  Not only that but they also added new powers to proxy voting, so that nearly a trillion dollars in pension funds is now at stake for those companies, which refuse to diversify their boards.

But, wait!  How dare they!  Didn’t Fox News just slap CalSTRS on the wrist for pressuring Facebook about its board?

“We essentially own corporate America, and not the other way around,” said Massachusetts State Treasurer Steven Grossman in an interview with Bloomberg Businessweek.  “We cannot go hat in hand to corporate CEOs and suggest that it would be a ‘nice’ thing if they would increase the number of women. It’s not about being nice.”

You said it, Steve!

States Use Pension Clout to Push for More Women on U.S. Boards

Steven Grossman, our new hero