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Tuesday, June 26, 2012

Facebook Adds Woman to Board

Story first appeared in The Wall Street Journal.

The No. 2 executive at Facebook Inc. has made it a mission to tell women that they can have it all. Now she has added one more résumé item to help her lead by example: a board seat at the social network.

On Monday, Facebook named her as the eighth member of its board. In doing so, the Menlo Park, Calif., company answered criticism by diversifying its all-male board with a high-profile female executive.

Her appointment comes amid intensified efforts to increase the number of women on American corporate boards. Their ranks have grown fairly slowly for years. Women accounted for about 16% of directorships at Fortune 500 companies last year, according to Catalyst, a New York group that researches women's issues. On the other hand, big businesses rarely put more than one insider on their boards.

Facebook's move gives her—who is frequently on the wish list of companies seeking to name a new chief executive—a voice at the highest echelons of the social network.

In a statement, the Facebook CEO Mark played up her importance to the company. He called her his "partner" and said she has been essential to Facebook's "growth and success."

She joined Facebook as its chief operating officer from Google Inc. in 2008, and was deeply involved in the social network's recent initial public offering and has helped build the company's online ad business.

In February, a California State Teacher's Retirement System's director of corporate governance, wrote a letter to the Facebook CEO saying that they are disappointed that Facebook's board will not have any women. The letter said evidence has shown that boards perform better when they are more diverse.

The board appointment on Monday alleviates that image but didn't quell all the critics. An author of several governance books, said since the CEO currently holds about 57% of Facebook's voting power, the company needs to go the extra mile to demonstrate its (board's) independence. In making this new appointment, Facebook is reaffirming its commitment to clubbiness with this choice because she's an insider.

Still, the appointment is likely to have the effect of keeping the executive—who is worth $1.4 billion from her 44 million shares of Facebook restricted shares and options—deeply vested in the social network. She has been wooed for CEO jobs in the tech and media worlds, say recruiters.

She appeared on a wishlist for the New York Times Co. chief executive position, according to a person familiar with the matter, which the company has been trying to fill since its former CEO retired in December. But "she was never approached" by the Times, another person familiar with the matter said.

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