Over the weekend, Twitter CEO Dick Costolo was pummeled after his company's public filing exposed the makeup of the board of directors seated atop his $20 billion real-time empire: All white and all male.
Except for Costolo’s lame joke dismissing one critic—pundit Vivek Wadhwa—as “the Carrot Top of academic sources,” the skirmish played out like every other round of Monoculture Mad Libs: Name of hot tech company verb act of exclusion.
How familiar is this game, exactly? Here's a chart of the corporate boards of the top 17 tech companies, created by Gawker's Jim Cooke:
In the aftermath of the Times article, Costolo justified the absence of women on Twitter's board with a familiar riff: "you give people an easy out by just checking a box," he tweeted at Wadhwa. "The issues are much bigger than checking any 1 box." That's the exact same thing Mark Zuckerberg told The New Yorker when he tried to justify denying Sheryl Sandberg a board seat back in 2011.
When I asked Mark Zuckerberg why his five-member board has no women, his voice, which is normally loud, lowered to a whisper: “We have a very small board.” He went on, “I’m going to find people who are helpful, and I don’t particularly care what gender they are or what company they are. I’m not filling the board with check boxes.” (He recently added a sixth member: another man.)
That billionaire tech executives confuse criticism with a call for quotas hurts their companies most of all. "This to me is not a gender issue, it's an innovation issue. That’s the cost to Twitter," serial entrepreneur Nilofer Merchant told Valleywag by phone yesterday.
"All innovation is a derivative of ideas and especially new ideas," added Merchant, who serves on the boards of both public and private companies. "What they’re saying is I’m gonna work under my same old, same old. And same thinking leads to parrot ideas, which ultimately leads to failure."
Fab.com, to take one example, has a user base that's roughly 70 percent female and no women on its board. It recently completed its second major round of layoffs. That's not to say that a more diverse group of directors could have salvaged a bad bet on flash sales, but it demonstrates a disconnect between a company and its customers. All the products made by the tech companies in our chart are used by women—in Twitter's case, perhaps even more so than men.
(In an op-ed in Time.com, Merchant pointed to findings from a Catalyst study of Fortune 500 companies that shows that "on average, companies with the highest percentages of women board directors outperformed those with the least by 53 percent.")
“Everyone is trying for diversity, both gender and ethnic diversity, on boards and in operating positions,” said Rick Devine, chief executive of TalentSky, a Silicon Valley recruiting firm. “The issue isn’t the intention, the issue is just the paucity of candidates.”
As AllThingsD’s Kara Swisher, a longtime critic of the lack of women on corporate boards, reported weeks before the Times waded in, Twitter had already "placed a top priority on adding a woman to the current all-male roster," including hiring a search firm to make Silicon Valley’s version of a binder full of women:
That list, according to sources, was topped by — in the biggest wish of all time, perhaps — former Secretary of State Hillary Clinton. While there has been no official outreach to Clinton, who is likely to run for president in the next election, and might be busy, a number of other potential female directors have already been interviewed. But none have been selected as yet. Said one person close to the situation: “It is a stated goal of the board, and we had hoped to have a woman director before the IPO.”
There is a wide and persistent race and gender gap in the technology industry. But when Silicon Valley decries the “paucity of candidates,” maybe they’re just asking the wrong people.
Merchant had a long list of potential directors who could bring Twitter more value than just checking off a box.
"If they needed more legal counsel on how to maintain privacy, they could have chosen Miriam Rivera, the former general counsel of Google, employee no. 108, who understands more about the law and this kind of open structure than anyone you could point to. And she’s currently on the board of Stanford, so no lightweight!" said Merchant. If Twitter wanted brand expertise, how about Wendy Clark, the chief marketing officer at Coca-Cola? If cloud computing is important to the company, why not Padmasree Warrior, the chief technology officer of Cisco?
Or even outside the corporate world: "From a policy point of view, because Twitter is shaping global world opinion, they could have added former secretary of state Hillary Clinton or her daughter Chelsea, who clearly has a very strong point of view and is active on Twitter,” Merchant added. "Anne Marie Slaughter is clearly an outstanding leader and thinker and from a policy point of view could be a great alternative to Hillary. And so on."
It's not like Costolo needed to do all the work himself. The CEO, Merchant said, could also have reached out to Katie Stanton, Twitter’s VP of International. “She used to work in Hillary’s office. She helped do all international expansion. So here’s a very talented executive at the company, mind you not on the executive team, but at the company, and he could have turned to her and said, ‘Clearly you’re well connected, I need you to help me form the search process.”
Given the reports of Twitter’s search committee, it’s possible that Costolo is in negotiations with one or more of those women right now, which is partly why his defensive and dated response was such a disappointment.
Of course, the homogeneity of Twitter’s pre-IPO board was hardly surprising, given the wider structural inequality of capital investment. Investment in the startup is what buys you a seat at the table. "The current board government is tied to ownership of the company," Merchant explained, "and ownership of the company unfortunately ties to venture capital and how little dollars are tied to woman."
Across Silicon Valley, start-ups tend to have all-male boards, largely because board members are the venture capitalists who invested in the company, 89 percent of whom are men, according to the National Venture Capital Association.
It is often when tech companies first face the pressures and demands of being a public company that they recruit women to their boards.
The same day that AOL Inc. spun off from Time Warner in 2009, it named three female directors (Patricia E. Mitchell, Susan M. Lyne and Karen E. Dykstra) and its first African-American director (Colin Powell’s son Michael K. Powell) to its board.
But there’s no law that says companies have to wait until IPO day: Before filing its first S-1, Facebook added Erskine Bowles, a veteran of the Obama and Clinton administration, and Donald Graham, CEO of the Washington Post Company, to the three venture capitalists on its board while Sheryl dutifully leaned in from the sidelines.
From her experience sitting on corporate boards, Merchant said the common thinking was that “Since I don’t know them, they must not exist”:
The reality is if you had never met a black person before 1952, you might have thought that it was perfectly fine for them to sit in the back of the bus. So the fact that Dick [Costolo] is not seeing qualified people right in front of him, says to me he’s blind. When I say he’s blind, I mean blind to innovation. Because new ideas come from new people and allowing that friction of people to have a debate. So far his board looks like a lot of sameness.
Instead of touting the ways Twitter was trying to include a broader range of talent, Costolo went on the defensive, said Merchant:
As if somehow you’re calling [him] a racist or a sexist and that’s not actually what we’re trying to do. We’re trying to say: Twitter, you deserve to do better for yourself.
Then again, so do most of the tech companies in our chart.
A note on the chart: publicly-traded companies and some private startups list their current board of directors online. Here are the boards for Microsoft, Apple, AOL, Yahoo, Amazon, eBay, Google, LinkedIn, Facebook, Twitter, Zynga, Gilt Groupe, Groupon, and Fab.com. I tried to supplement that information by checking with the companies themselves and previously reported changes to the board. As I noted, I did not hear back from Apple, Google, Amazon, and eBay to confirm the information. Yahoo declined to comment.
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[image via Getty, chart by Jim Cooke]