Starbucks‘ board is more diverse than most. Uber and Travis Kalanick could’ve learned something from it.<\/b>
\nOne of the major turning points in the Uber saga came during a staff meeting on June 13.
\u201cThere\u2019s a lot of data that shows when there\u2019s one woman on the board, it\u2019s much more likely that there will be a second woman on the board, \u201d Uber board member Arianna Huffington told the audience.
Her fellow director David Bonderman responded: \u201cActually, what it shows is it\u2019s much likely to be more talking.\u201d
The comment, first reported by Yahoo, cost Bonderman his board seat. It also perfectly illustrated Huffington\u2019s point. Having more women on Uber\u2019s board would have discouraged that kind of shockingly inappropriate remark. More important, it would’ve discouraged the toxic culture for women that in large part led CEO Travis Kalanick to resign yesterday.
Uber added its second female board member only this month\u2014Nestl\u00e9’s Wan Ling Martello \u2014reaching what Nell Minnow, an expert on corporate governance calls the tipping point. \u201cIt takes one woman to make a motion and the second to second it, \u201d she explains. \u201cThe idea that there are two suggests it\u2019s not tokenism.\u201d
Fortune recently profiled Starbucks, a company whose board composition starkly contrasts with Uber\u2019s. Four of Starbucks\u2019 12 independent directors are women. That\u2019s 33% of the board if you count just the independent directors or 28.6% if you count the CEO and executive chairman, who also sit on the board. Those numbers surpass the averages for Fortune 500 companies, where 21% are held by women. Three of the four women on Starbucks‘ board are women of color. For a sense of how rare that is, a recent Catalyst study found that minority women hold just 3.8% of all Fortune 500 board seats.
Uber and Starbucks are in much different businesses, but they\u2019 re both consumer-facing operations with many thousands of employees or contractors working for them. Starbucks\u2019 board attempted to reflect the diverse customer base it wanted to serve and the employees it wanted to hire. \u201cIt\u2019s what Starbucks stands for, \u201d said Ariel Investments president Melanie Hobson, who has been a director since 2005. \u201cWe want to be a place where everyone feels comfortable.\u201d
At Uber? Not so much.
Fortune interviewed Starbucks director and Hearsay Systems CEO and founder Clara Shih in May, and her comments were prescient. \u201cThis is a company that lives its values to its very core, \u201d she said of Starbucks. \u201cTo be honest, I think Silicon Valley is missing a lot of that leadership.\u201d She added, \u201cI don\u2019 t need to recite all the examples in Silicon Valley where\u2019s there\u2019s been a dearth of moral courage and leadership, but it\u2019s just such a stark difference.\u201d She noted that traditional companies have a lot to learn from Silicon Valley but one area where Valley companies can learn from companies like Starbucks is culture and leadership and \u201cwhat that really means to build a business and legacy.\u201d
(As an interesting side note, Uber watchers are speculating that one-time Starbucks director Sheryl Sandberg could be considered as a possible replacement for Kalanick. Sandberg gave Shih’s name to the executive search firm when she stepped off the Starbucks board.)
The financial results of having more women on boards are tangible. An analysis by MSCI over a five-year period between 2011 and 2016 found that U. S. companies that began the period with at least three women on the board had median earnings per share gains of 37%. Companies that began the period with no female directors saw their earnings per share decline by -8% over the course of the study.
Having more women on boards also tends to mean more oversight for the CEO, says Larry Fauver of the University of Tennessee\u2019s Corporate Governance Center. Female directors attend more meetings of the board and of the compensation committee and do more monitoring, he says. \u201cThey are more involved, \u201d he explains. \u201cWhen the CEOs are performing worse, when more women on are the board, they replace the CEOs more often.\u201d
Starbucks is far from flawless. Its lead director is a man and two of its three board committees are headed by men. Its most senior leadership is overwhelming white and male. And though Starbucks often takes a leadership role on social issues, it’s not always perfect on the ones that matter most to women. Its store employees, for example, get only a third of the paid maternity leave that corporate employees receive.
But startups may want to take notice. It might benefit them to build a board from the start that looks a little bit more like Starbucks‘.<\/p>\n

\n

Similarity rank: 20<\/div>\n

Sentiment rank: 1.6<\/div>\n

<\/div>\n<\/div>\n