As recent studies show a link between board diversity and corporate social responsibility (Feng et al; 2020), board diversity and inclusion is drawing more attention than ever. In addition to ensuring equality and representation, board diversity comes with a host of benefits for shareholders and stakeholders alike. However, it is important to highlight current practices particularly in the Tech sector especially in the post COVID-19 era where reliance on tech solutions became evermore important for many across the world.
This month, we will look into how board diversity and inclusion is in the Tech sector, justifications why we should work towards a more diverse and inclusive board, some case studies of tech giants who have diverse boards and finally, what we need to do to ensure minorities are better represented and boards are diverse.
With a new push from the U.S. Securities and Exchange Commission (SEC) to have more diverse boards in public companies, the effects of such regulatory measures can be felt among listed companies (Green; 2021). Though this new push is yet to be decided by SEC in August, its effects remain important especially since major investment banks now require a particular board diversity ratio in order to act as their underwriter.
Among the US tech companies, some of the big names like Facebook, HP and Uber have been observed to have between 33%-44% of their board members to include women (Bradley-Smith; 2020). Though this may be a notable ratio compared to earlier practices in terms of gender diversity, we are still far away from where we need to be in terms of minority inclusion in boards. This is particularly evident despite tech companies’ statements on their push to have more diverse boards with only around 5% of the boards of Silicon Valley firms reported to have diverse ethnic representation (Gruman; 2020).
The question is therefore, why should tech companies have more inclusive boards? What benefits will such change bring to these companies?
Bradley-Smith, A., The 25 Tech Companies with the Most Gender Diverse Boards (Orgio Inc, July 2020).
Green, J., Boards Are Adding More Women and Minorities Ahead of Nasdaq Rule, (Bloomberig Equality Online; 14 May 2021. At: <https://www.bloomberg.com/
Gruman, G., The state of ethnic minorities in U.S. tech: 2020 (Computerworld Online, September 2020) at: <https://www.computerworld.
Feng, X., Groh, A., and Wang, Y., Board diversity and CSR, Global Finance Journal (October 2020).”