For privately held companies, the dependence on professional networks and word-of-mouth referrals is likely even greater. Given that CEOs and other directors are predominantly men, the personal networks from which they draw candidates likely under-represent women. Additionally, a preference for prior board service or CEO experience may further tip the scales in favor of male candidates.
Only a fraction of the private companies studied would meet these criteria today. For the 115 companies based in California, 44 had a female board member, as required for the 2019 deadline. Only four of the companies met the July 2021 deadline criteria. Admittedly many of these companies may never be traded on the public market. However, those planning to go public will need to significantly alter their board composition to meet the law’s requirements.We completed a comparative analysis of 98 U.
For independent directors, the gender mix is slightly less extreme, pointing to the opportunity some privately held companies are taking to introduce more diversity to the boardroom through the addition of independent director seats. Of the companies studied, 29 percent did not have an independent director on their board.