Pressure is applied to diversify the boards.
Since June last year, 145 S&P 500 companies have added at least one CEO, which is “faster” than in previous years, according to the Russell Reynolds Association. Latin American board appointments in public companies quadrupled a year ago, with women occupying almost a third of all seats in the S&P 500 for the first time. Last year, only one major US public offering was submitted to the Men’s Council.
“Ninety percent of each board search we have been asked to do in the last nine months has focused on diversity, especially ethnic diversity,” said Keith Meyer, Co-Chair and CEO Allegis Partners
A year ago, only half of his clients asked women to find minority candidates, said Meyer, who co-founded the Academy of Directors, an organization that prepares various candidates for future board roles. About 50 of Gradu’s graduates are now directors, before the double epidemic, he said.
The speed was mainly due to controversial quotas, which is similar to the rule proposed by Nasdaq. At the end of last year, the stock exchange announced a program that requires listed companies to have at least one woman and one under-represented director. Companies that do not have such directors can stay in the stock market if they explain their lack of diversity.
The US Securities and Exchange Commission will decide by August whether to approve the offer of Nasdaq. At the same time, all companies in the state of California will have to meet the same requirements by the end of this year. In addition, from July 1, Goldman Sachs refuses to place companies that do not have a certain variety of boards.
These restrictions were a concern for Maravai LifeSciences Holdings CEO Carl Hull as the company prepared to go public in the summer. The four-member, all-men council had no choice but to diversify. The company is headquartered in San Diego and was selected by Goldman Sachs to host its IPO. It was looking for a listing on the Nasdaq stock exchange.
Critics of quotas say they lower standards, give people unfair advantages based on their race, ethnicity or gender. Working with Goldman և Heidrick & Struggles’s executive recruiter, in about three months, Maravai found three qualified women to be added to its list. Anat Ashkenazi, Eli Lilly CFO. Ess Esika Hopfield, Scientific և Pharmaceutical Industry Consultant; : Susanna Gray, former CFO of Royalty Pharma. Maravai is developing drugs և health therapies, including some of the technologies used in COVID-19 vaccines, all of which have decades of experience in the medical science industry.
Gray, who never sat on the board last year, now sits on four. “You fall into that circle where, if you were not on the board, you could not sit on the board,” he said. “Goldman widened the hole.”
Traditionally, the boards were assembled with friends of the founders, the leaders և other directors տնօրեն’s friends. That pattern keeps them largely white’s need to change if companies want to take on new mandates, says Ilana Wolf, head of Goldman Sachs’ corporate governance board. “Choose someone you know and trust,” he said. “But when the only pool candidates you know և trust’s all the same ունեն probably have shared experience և origins, it is not effective in optimizing talent.” Over the past year, Goldman has helped find 21 different directors for 21 companies.
Among those companies was Root, a car insurance company. CEO Alex Tim has been trying for more than a year to find a variety of directors. The company is based in Ohio, which does not have a board quota, but wanted Goldman Sachs to hold its IPO in the fall. The bank helped him find Depardieu Deward, a former chief market officer at Office Depot who was already on the Under Under Armor board.
This year, DeVard also helped establish the Black Executive CMO Alliance, the c-suite executives of Amazon և Netflix companies that demand more marketing executives. Often the boards are looking for certain credentials for potential directors, such as the c-suite experience. Women ությունները minorities do not have a well-known role in these roles, which leads to their under-representation on the boards. “The system was designed for the success of the majority, not the minority,” said Devard. “We do not play on an equal footing.”
Both the MeToo movement and the Black Lives have significant protests, raising awareness of discrimination against women and minorities, which keeps them in power. But the reason for the variety of boards is also the improvement of management, adding different types of thinkers to the table. Hal said that the new directors of Maravai LifeSciences have changed the dynamics to bring new perspectives. During their second meeting earlier this year, the three women had different ideas about communication strategies than the veterans.
“We’re all talking,” said Gray, one of the new directors. “It does not make sense for any of us to put a board, because it is convenient for us to have the right sex.”
The fate of the Nasdaq rule remains unclear. According to the exchange, of the more than 200 comments submitted by the SEC this winter, it received almost 85% support for the program. It featured endorsements from Facebook CEO Cheryl Sandberg և US Sense Catherine Cortez Masto և Kirsten approval illibrand. Gary Gensler, President of the newly established SEC, is considering proposals for the disclosure of diversity data by the company. In addition, Congress is considering a law that would require companies to include a variety of boards in regulatory documents.
Republicans in the Senate Banking Committee urged the SEC to reject the rule, arguing that the Nasdaq’s role was not to “act as an arbiter of social policy or impose a one-time solution on markets.”
When the offer was announced in December, only a quarter of the companies listed on the Nasdaq met the standard. Even if the rule is not approved, the face of corporate councils will continue to change.