Women of Colour Narrowly Outnumber “Daves” in Boardrooms
5 min read · Jan 2025
Shepherd (2023)
Women of colour now comprise 4% of board members in privately-held companies, but 76% of company boards have zero women of colour.
Summary
All-male boards of directors are no longer common among public companies, however, privately held companies are experiencing slower progress in achieving gender diversity. This report highlights that while privately held company boards remain predominantly male, they are becoming more diverse than in previous years. One reason is the limited diversity within the networks of privately held companies, which restricts their ability to identify board members who reflect broader demographic representation. Additionally, these privately held companies often underestimate the advantages of appointing board members from outside their networks. Still, research shows a positive feedback loop: diverse boards tend to expand their networks, making it easier to source a broader range of diverse and independent board members over time.
Method
This report analyzes the composition of boards of directors in 667 well-funded private U.S. companies using data from 2019, 2021, and Q1 of 2022. The authors compile a diversity dataset by sourcing information from platforms including Crunchbase, company websites, and other publicly available sources. Gender and ethnicity variables were determined through a combination of self-identification data and biographies supplemented with contextual and visual identification. The study focuses on the representation of people of colour, defined as Black or African Americans, Indigenous and or/Native Americans, Asians, Hawaiian or Pacific Islanders, and Hispanics.
Key Findings
For the first time in history, there are more women of colour on boards than male board members named “Dave” in the study of privately held companies.
Women of colour now comprise 4% of board members, but 76% of company boards have zero women of colour.
Women are gaining increased representation on boards of privately held high-growth companies.
As of 2022, women represent 16% of board members, a 2% increase from 2021 and an 11% increase from 2019.
In the past three years (2019-2022), women have gained 0.6 more board seats in privately held companies than in the past.
Companies with diversity showed stronger funding outcomes than those without.
Companies with women on their boards raise 16% more funding than boards with zero female representation.
To fully take advantage of economic diversity, boards should have at least three women, but private companies currently lag behind public ones.
Research indicates that to capture the full economic benefits of diversity, boards need at least three women, yet in private companies, only 31% have more than one woman on their board, just 9% have more than two women, and 32% still have zero women on their boards.
In contrast, while all S&P 500 companies now have at least one woman board member — an important step forward — they still fall short of the three-women threshold needed to realize the benefits of diversity fully.
Takeaways
There has been a positive movement towards board diversity in recent years, with public companies increasingly prioritizing gender diversity and representation. Women of colour have also made strides, now accounting for a higher percentage of board members than men named “Dave” or “David.” There are roughly 68.3 million Black, Indigenous and women of colour in the U.S. compared to 4.8 million men named “Dave.” However, despite these gains, underrepresentation remains a persistent challenge, as women, particularly women of colour, continue to face barriers that limit their presence in boardrooms.
Publicly held companies are setting the standard and creating pressure for privately held companies to prioritize board diversity. Further evidence highlights the benefits of board gender diversity: a 2021 study of FTSE 100 firms from 2005 to 2016 shows a positive and significant effect of female board members on financial performance (Brahma et al., 2021). However, simply adding women to boards is not sufficient. Findings from Australia’s ASX200 index companies reveal that representation alone does not disrupt existing power dynamics or ensure women’s ability to influence decisions (Verhoeven et al., 2022).
Currently, women of colour hold only 4% of board seats in high-growth private companies, reflecting a need to address the intersecting barriers of gender and race in boardroom representation. Privately held companies should pay close attention to the policies, power dynamics, and structures that limit women’s ability to bring new perspectives, oversight, and leadership. Research has validated that companies that embrace meaningful diversity and inclusion position themselves ahead of competitors.
References
Shepherd, Ann. “Him for Her and Crunchbase 2022 Study of Gender Diversity on Private Company Boards.” Crunchbase News, 28 Mar. 2023, news.crunchbase.com/diversity/2022-gender-study-private-boards
About WIN-VC Canada:
New Power Labs is the research lead of the Women and Nonbinary (W) Impact (I) Network (N) for Venture Capital (VC), a national collaborative of organizations working to provide services, programming, events, and dedicated resources to women and non-binary entrepreneurs and gender lens investors across Canada who are working towards becoming investment ready and increasing the pool of investors driven to invest in these ventures.
This research is part of WIN-VC Canada, supported by the Government of Canada. WIN-VC acknowledges the support of Innovation, Science and Economic Development (ISED). ISED has awarded funding for WIN-VC that will make the venture capital environment more inclusive for women by transforming traditional investment processes, processes and knowledge into respectful and meaningful approaches that value equity and impact with a focus on diverse women and non-binary entrepreneurs and SMEs including Black communities, Indigenous peoples, racialized populations, persons with a disability, 2SLGBTQ2+ and new Canadians.
