Why Facebook’s IPO Matters to Women

Contributed by Beth Stewart, Chief Executive Officer, Trewstar Corporate Board Services; Director, Carmax; Former Director, General Growth Properties and AV Homes. Inc.

February was a tough month for women.  At a House committee hearing, a panel of five men expounded on religious liberty—in the context of President Obama’s compromise plan on insurance coverage for contraception. In Oklahoma, protesters rallied against Republican Senator Dan Newberry’s bill that would require a woman to hear the fetus’s heartbeat before a doctor could perform an abortion.  Facebook announced a $5 billion IPO without a single woman on its board. But, unlike the House committee hearing, or the Oklahoma personhood bill, the public outcry against Facebook’s board was anemic.

A group of young women—two journalists, one paralegal, and a Rhodes Scholar—decided to do something about it. They wanted to use Facebook, not to topple Arab governments, but to create meaningful change in corporate America—change that has not occurred for years, despite the articles, conferences, and commitments to do better.

They could see no reason for Facebook not to expand its board to include women. Study upon study has shown that when boards include women, attendance at board meetings improves, audits occur more frequently, and equity—the shareholders’ investment in the company—grows.

Further, women on Facebook’s board could generate positive publicity for Facebook as a leader in corporate governance as it has been in so many other areas of our society.

In his Letter to Investors, CEO Mark Zuckerberg referred to Facebook’s role in the Arab Spring, saying that the site should “empower people” to seek an alternative to the “monolithic, top-down structure that has existed to date.” The young women wondered: Shouldn’t Facebook’s top management structure be less monolithic, too?

Finally, it would be good for society. They saw the composition of Facebook’s board as a problem—but also an opportunity. Catalyst, celebrating its 50th year this week, has shown that the percentage of women on corporate boards has remained constant at 15-16 percent over the last six years. But it’s not just senior women in business. Other research shows that the same is true in government, medicine, law, and Hollywood.

“The only argument anyone gave against the campaign was that Facebook should be able to decide its board members for itself,” said Alice Baumgartner, a graduate student in Latin American history at Oxford, and one of the campaign’s founding members. “I thought that wasn’t very convincing, since it was the same argument white businessmen gave during the civil rights era to explain why they didn’t need to hire black employees. Liberty for themselves was more important than the right of all, black and white, men and women, to equal employment.”

Alice and her friends decided to launch a campaign that would start a conversation across the world—not just about Facebook’s board, but about those making decisions across all industries and professions. They decided that using Facebook to out Facebook would be an opportunity to bring positive change to corporate boards and maybe to all senior management practices.

At the beginning of March, Alice—who, in the interest of full disclosure, is a friend of my son’s—approached me about the campaign. She knew that I had just started my own company, Trewstar Corporate Board Services, Inc., whose sole focus is placing qualified women on corporate boards, and that I had written to Sheryl Sandberg, asking her about Facebook’s board. Alice thought that I might be interested in advising the campaign.

Campaigns make women my age nervous. We have families and careers, and can’t risk either, even for causes we believe in. At first, I thought that I could be most helpful by locating qualified women for the board and this would have been easy. But, I realized, there would be no point to this approach if Mark Zuckerberg did not first commit to including women on the board of Facebook.

After listening to their concerns, I did a little more research myself. Facebook is the tip of a deep iceberg: Zynga, Expedia, Hertz, and Duane Reade—among many others—have no women on their boards; Groupon, Apple, and Amazon have only one. Only twenty-four women were added to the boards of Fortune 500 companies last year. At this rate, it would take almost 40 years years to fill 30 percent of Fortune 500 board seats with women. Facebook could lead the way, encouraging the 149 Fortune 500 companies with only one woman and the 56 Fortune 500 companies with no women to each add a woman in 2012. That would be almost ten times the number added in 2011.

Having served on the boards of public companies for almost twenty years, I understood that the usual approach to the issue of women in corporate governance—education, research and networking—is incredibly important. But if we are honest with ourselves, it has not been enough. The question became how to facilitate the success of everyone’s efforts. It seemed that a broad-based coalition was necessary- and something new that was worth trying.

It was in my interest—and in the interest of everyone who cared about women in business—to support this campaign. What is the point of educating people about the issue, if not to give them reasons to do something about it? These young women had a possible solution to our problem: insufficient demand in the face of ample supply of women qualified to serve on corporate boards.

In less than a month, the young women have organized their campaign. Their committee now includes men and women from across the world—from Australia to Europe to the United States to South America. One member, a man, built their website. Another, also a man, put together a YouTube video. They have a blog, a Twitter, a petition, and dozens of graphics to post on Facebook. And a great name: FACE IT.

The campaign launches in the days leading up to April 1. The timing couldn’t be more perfect. One of my favorite posters is an image of Mark Zuckerberg, saying, in reference to the campaign, “Is this a joke?” At the opposite side of the poster is an image of an indignant-looking woman, who says: “Is your board?”

Let’s hope that this campaign will convince Facebook—and other companies like it—that a board without women can’t be taken seriously. Check it out: www.faceitcampaign.com.

Beth A. Stewart is Chief Executive Officer at Trewstar Corporate Board Services, Director of Carmax, Inc. and Former Director of General Growth Properties and AV Homes. Inc. Beth graduated from Wellesley College in 1978 and started her career at Goldman Sachs as one of the first analysts in the investment banking division. After graduating from the Harvard Business School in 1982, she re-joined Goldman Sachs as an associate in the Real Estate Investment Banking division. Since her ‘retirement’ from Goldman Sachs in 1993, Beth has pursued many professional investing and consulting activities in addition to her directorships. She also has been an adjunct professor at the Columbia Graduate School of Business. She has five children (ages 14-23) and one husband.