Don’t appoint a woman on your board just for the photo opportunity
“When news emerged in May that Facebook had hired an executive search firm to look for a woman to add to its board of directors, I had hoped that with the appointment would come a great deal of diversity of thought and experience and an independent voice. Facebook has now announced that it has chosen its COO, Sheryl Sandberg, to join its board. Having Sandberg on the board is a good step, but does it address the larger shortcomings that are concerning Facebook users and investors?”
LUCY MARCUS blogs.reuters.com (June 26, 2012)
Facebook appointed the first woman on its board last month. That’s good news, right?
Many tech companies have been roundly criticized for rarely getting women to sit on their boards. Despite the fact that these are the gee-whiz enterprises of the world today, setting a scorching pace, on this matter they remain rather old-school: they’re largely boys-only clubs.
So when Facebook steps up soon after its recent IPO to announce it has finally appointed a woman, who on earth would have a problem with that? Reuters columnist and corporate governance expert Lucy Marcus had a problem. So did I.
Let’s start at the beginning. Why do you need a board of directors? The easy answer is: because it’s a legal requirement. That, unfortunately, is the primary reason that many (perhaps most) entrepreneurs ever consider having a board. To these thrusting folk, having to justify their actions to bunch of part-timers is a minor inconvenience at best, a major irritation at worst.
That’s understandable. When you’ve built up a business from scratch from the sweat of your brow, you are going to be somewhat reluctant to share future decision-making with others, none of whom have been through your tribulations or feel the passion for the business that you do.
So most boards are constructed for the first time simply because the law seems to believe in them. Entrepreneurs rarely do.
As Ms Marcus would argue, this is short-sighted. Businesses undergo phases of growth, and what works in the early phases rarely works in later ones. Once a company has expanded beyond a certain point, it ceases to be a one-person show, otherwise it places a ceiling on its own growth. Rapidly expanding businesses need capital – but they also need diversity in leadership.
Back to Facebook. This firm is a real phenomenon, the fastest-growing social network in history. Its young founder, Mark Zuckerberg, is entitled to feel a sense of singular achievement. But this is not a business without significant current and future challenges. Its recent IPO has gone badly; its revenues are still low, and it requires remarkable further growth in order to meet market expectations; and it is not clear how it will migrate its advertising model into mobile space, which is where all the action will be.
With that in mind, Facebook needs truly diverse and truly independent voices around the board table. Its new shareholders need protection, just like the old ones. Ms Sandberg is a very capable executive, but she is not independent. She will, in all likelihood, agree with and vote with Mr Zuckerberg on major issues.
As Lucy Marcus points out, putting a woman on your board is not just a matter of “optics.” Don’t do it for the photo opportunity; do it because having women in leadership will increase the perspectives on life available to you. Do it because diverse and challenging viewpoints around the board table make sense to you. Look for all sorts of diversity: in opinion, in experience, in age, in skill and in geography. And, of course, in gender. With a multitude of navigators available, you are more likely to be able to steer through the many storms that are undoubtedly going to come your way as a mature enterprise in a disruptive era.