Biggest IPOs, Under Scrutiny, Debut With More Female Directors
Biggest IPOs, Under Scrutiny, Debut With More Female Directors
(Bloomberg) -- Among the 25 largest public offerings last year, only one hit the market with an all-male board, the cannabis product company Greenlane Holdings Inc. That’s a huge change from the previous five years, when about half the boards had no female directors.
At six of the biggest companies that went public last year, women held 30% or more of the board seats, according to a six-year analysis of the largest initial public offerings, released Thursday by the advocacy group 2020 Women on Boards.
“We hope it’s not a fluke,” said Malli Gero, co-founder and senior adviser to 2020 Women on Boards. “I think it’s companies getting the message.”
Goldman Sachs Group Inc. put companies on notice this year that it won’t underwrite any IPOs in the U.S. or Europe that plan to hit the market with boards composed of only white, straight men. Next year, they will require two directors from outside that group. The space-sharing company WeWork faced a public drubbing after it proposed to go public with an all-male board, adding to the pressure for public companies to be diverse from inception.
Lyft Inc., Uber Technologies Inc., Levi Strauss & Co. and Chewy Inc. were among IPOs with more than 20% women on the board when the first shares sold to the public, the group found.
Once public, the scrutiny grows. The largest index investors, such as BlackRock Inc. and State Street Global Advisors, are voting against directors at companies without a female director. Legal & General Investment Management, one of the largest U.K. funds, this year will vote against directors at the largest S&P 500 boards that have less than 25% female directors.
The Women on Boards analysis shows that boards are adding more women over time. Looking at the 134 companies still active from the largest IPOs since 2014, the group found that only 7% lacked a female director by the end of 2019, down from 9% a year earlier.
Among the new 2019 listings, women made up about 22% of directors, nearly double the previous average.
“This is a full year before Goldman Sachs made their announcement, so it’s not a result of that,” Gero said. “I think the companies truly are understanding that stakeholders and investors are looking at this, it’s important to them, and companies are adjusting.”
To contact the reporter on this story: Jeff Green in Southfield, Michigan at jgreen16@bloomberg.net
To contact the editors responsible for this story: Rebecca Greenfield at rgreenfield@bloomberg.net, Philip Gray
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