The big tech companies may be having a hard time at the moment as they come to terms with high inflation and lower consumer spending, but some things are going well—including governance.
A survey of Silicon Valley’s (SV) top 150 companies finds that representation of women has improved in the boardroom, surpassing representation at Standard & Poor’s (S&P) top 100 corporates.
A survey in 2022 by the law firm Fenwick finds that the percentage of women serving in the boardroom at SV 150 companies stands at 32.5%, well in tune with international standards, and up on 2021’s 25.7%.
This growth rate tops that of companies in the S&P 100, where the proportion of female board members stands at 32.3%, a little behind their techie counterparts, but still up on 28.7% the previous year.
Many tech companies had once been notable for having no women on their boards at all. Fenwick says both SV 150 and S&P 100 companies have made progress on gender diversity. “There has been a distinct downward trend in the percentage of SV 150 companies with no women directors (82.3% in 1996; none in the 2022 proxy season)…,” the report says.
Fenwick believes female representation may be a function of board size: smaller tech company boards mean fewer women overall.
It takes two
There are other areas where tech firms seem more advanced. Fewer IT businesses now combine the chair and CEO roles: 44.2% for Silicon Valley firms while S&P 100 boards indicate a preference for insiders, with 59.6% combining the top jobs.
However, tech companies and S&P appear to have very different attitudes when it comes to the controversial subject of dual class share. Silicon Valley companies continued their preference for giving founders greater voting power with a quarter (25.5%) having a dual class share structure in 2022. That’s up from 2.9% in 2011, demonstrating just how much tech leaders like to have control over their organisations.
In the S&P 100, meanwhile, dual class shares have fallen in popularity. Where nearly one in 10 (9%) S&P companies had dual class shares in 2011, the proportion is now only 5%.
Fenwick’s report says: “Adoption of dual-class voting stock structures has emerged as a recent important long-term trend among Silicon Valley technology companies—particularly among the mid-to-larger SV 150 companies—though it is still a minority of companies.”
One last observation: audit committees at tech companies tend to be smaller, an average of 3.5 directors compared with 4.6 members at S&P companies, and have fewer meetings—7.7 on average each year, compared with 9.3 among S&P firms.