A New California Law Requires At Least One Woman On Corporate Boards. How Does The Music Industry Stack Up?

Getty Images
The US Capitol Building in Washington, DC.

A new bill signed into California state law on Monday (Oct. 1) will require several publicly-traded music companies, including Pandora and Live Nation, to add more women to their boards -- or else face hefty fines.

The law, Senate Bill 826 -- which was first introduced this January and signed yesterday by Governor Jerry Brown -- requires public companies with principal executive offices in California to meet certain gender-inclusion requirements on their boards, based on a tiered system. Company boards with four directors must have at least one woman; with five directors, two women; and with six or more directors, a minimum of three women.

Failure to comply with the new law by the end of 2019 (or 2021 for larger boards) will lead to fines of $100,000 for each first violation -- i.e. for each seat required but failed to be held by a woman -- and $300,000 per violation in subsequent years.

How does the music industry stack up? Diversity reports from music companies suggest that female representation continually decreases as one climbs up the corporate ladder. For instance, women account for 49 percent of employees overall at Pandora, but only for 38 percent of management roles; Spotify’s inaugural diversity data report from July revealed that only 38.7 percent of its employees identified as women, with that share declining to 31.9 percent of management.

The numbers in corporate boards are even worse. Billboard examined the boards across 11 of the most influential companies in the music business -- including streaming and radio services Spotify, SiriusXM and Pandora (which SiriusXM just acquired last month); concert promoter Live Nation; label owners Vivendi, Sony Corp. and Warner Music Group; and media/tech conglomerates Alphabet, Amazon, Apple and Liberty Media. With the exception of Warner, all of these companies are publicly traded.

Out of the 117 total board members across these companies, 21 percent are women. That's slightly better than national averages; according to ISS Analytics, women hold just 18 percent of positions on the boards of the 3,000 largest publicly-traded corporations in the U.S. today.

What’s more, out of all the companies on the list, only Amazon, Spotify and Vivendi currently satisfy the new California bill’s requirements, touting at least three female board members each -- and none of the three companies are headquartered in California. The lowest-ranking companies on the list are Pandora and Warner Music Group, which each have just one woman on their board.

Additionally, nearly half of the female board members at the above companies were elected within the last three years, and four of them were elected within the last four months -- possibly due to legal pressure that Senate Bill 826 has created across the country. Indeed, ISS Analytics found that women accounted for 31 percent of new board directors added at the top 3,000 publicly traded companies overall -- a nearly twofold increase from the current national average of 18 percent.

Below is a more detailed breakdown of the boards of the top music companies, ranked by female representation, and just how well they will fare (or not) under California’s new law.

Vivendi: Six women, 50 percent of board

French media conglomerate Vivendi, which owns Universal Music Group, has unusual gender parity for the elite ranks of music and media. Its supervisory board is 50 percent female -- including but not limited to American exec Katie Stanton (CMO of Color Genomics, former vp of global media at Twitter; also on the board of Time) and French fashion veteran Aliza Jabès (founder and chairwoman of Nuxe).

Despite gender parity on Vivendi's board, all three major labels have still been the subject of recent scrutiny with respect to the gender pay gap. A report released in April, and mandated by U.K. law, revealed that female employees in Universal Music's U.K. office were paid nearly 30 percent lower hourly salaries than their male counterparts last year.

In the U.S., Universal Music Publishing Group chairman/CEO Jody Gerson currently sits on the advisory board of USC’s Annenberg Inclusion Initiative.

Spotify: Three women, 33 percent of board

Spotify is the only publicly-traded pure-play music company to satisfy Senate Bill 826’s provisions of having a minimum of three female directors for a board with six or more members.

All three of Spotify’s female board members were elected within the span of five months in 2017. Cristina Stenbeck, principal owner and former executive chairman of Swedish investment company Kinnevik, and Padmasree Warrior, CEO of electric car maker NIO and former CEO of Cisco, both joined Spotify’s board in June 2017 -- at the same time that Napster co-founder Sean Parker departed the company. Heidi O’Neill, president of direct-to-consumer at Nike, later joined the board in October 2017.

Spotify is currently under heightened scrutiny for gender equality in its workplace, facing a lawsuit from former sales exec Hong Perez alleging gender discrimination, equal pay violation and defamation. The streaming service hired its first female C-suite executive since its founding, chief content officer Dawn Ostroff, in August.

Amazon: Three women, 33 percent of board

Amazon, which saw its market cap reach $1 trillion in September, is the only tech conglomerate on the list that currently satisfies California’s new law.

Like the other big-tech companies on the list, all of Amazon’s women board members joined the company before 2015. Patricia Stonesifer, currently president and CEO of nonprofit Martha’s Table, has been an Amazon board director for over 20 years. Jamie Gorelick, partner with law firm Wilmer Cutler Pickering Hale and Dorr LLP and former Deputy Attorney General of the United States, has served on Amazon's board since 2012.

The third female board member, Judy McGrath, founded production joint-venture Astronauts Wanted with Sony Music in 2013, and joined Amazon’s board a year later. Previously the CEO of MTV Networks, McGrath stepped down from her chief role at Astronauts Wanted in February.

Apple: Two women, 25 percent of board

Both of Apple’s women board directors currently work in finance. Andrea Jung, president and CEO of nonprofit microfinance company Grameen America, joined Apple’s board in 2008, and also sits on the boards of retail and e-commerce giants Unilever and Wayfair. Susan Wagner, co-founder and director of investment corporation BlackRock, joined Apple’s board in 2014.

Apple Music is currently neck-and-neck with Spotify in the race for paid subscribers in the U.S.; the former claimed the North American lead in the streaming wars during its Q3 2018 earnings call.

Alphabet: Two women, 18 percent of board

Alphabet is arguably the most transparent company on the entire list when it comes to gender equality within its wider organization. Google’s extensive annual diversity report, which has been running for five years, reveals that women comprise only 25.5 percent of its leadership in 2018 -- an increase of less than 5 percentage points from 2014.

The parent company’s corporate board is even more skewed, including only two women out of 11 total members. Diane Greene joined Alphabet’s board in 2012, and is currently CEO of Google’s Cloud business; Ann Mather joined the board in 2005, one month after stepping down from her role as executive vp and CFO of Pixar. Mather also joined Airbnb’s board in August.

Despite transparency around internal diversity initiatives, Alphabet’s shareholders recently turned down a proposal backed by employees that would have tied pay to diversity goals.

Sony Corporation: Two women, 18 percent of board

Sony, which is headquartered in Tokyo, has a majority-Japanese board (with the exception of Tim Schaaff and John Roos) and is tied with Alphabet on this list in terms of female representation. Eriko Sakurai, president of chemical company Dow Silicones Holding Japan, joined Sony's board in 2014; Toshiko Oka, president of Oka & Company as well as board director of Mitsubishi Corporation, was elected to Sony's board in June 2018.

According to company reports, women accounted for just 34 percent of Sony's workforce and 25 percent of management positions worldwide as of year-end 2017. Those numbers rise to 39 percent and 37 percent respectively for U.S. employees, and nearly equal percentages in Europe. The market with the lowest representation of women in Sony's workforce is the corporation's home country of Japan, where women account for just 8 percent of leadership and 22 percent of total roles at the company.

Live Nation: Two women, 17 percent of board

As previously mentioned, Live Nation elected both of the women on its board in June. Dana Walden currently serves as chairman/CEO of Fox Television Group, and also sits on the board of directors of Hulu (a key content and distribution partner to Live Nation). Ping Fu founded 3D imaging software Geomagic (which sold to 3D Systems in 2013) and also serves on the National Advisory Council on Innovation and Entrepreneurship at the Department of Commerce.

While Live Nation has not disclosed further internal diversity statistics, the company has taken steps to help the cause of improving gender equality in the live music industry at large. In May 2018, the company established the Women Nation Fund, an early-stage investment fund for female-founded live music businesses across concert promotion, festivals and other events.

SiriusXM: Two women, 15 percent of board

Headquartered in New York City, SiriusXM is now one of the most powerful and far-reaching audio companies in the U.S., with Pandora under its wing. Notably, the broadcasting company was the main industry holdout on the Music Modernization Act (MMA), which finally passed in the U.S. Senate last month thanks to a last-minute compromise, sources told Billboard.

SiriusXM has just two women on its board -- the most recent addition of which is Kristina Salen, who joined the board in July and currently serves as CFO/COO of UnitedMasters. Salen arms SiriusXM with valuable digital-music expertise, which will come in handy for the new owner of Pandora in an increasingly-crowded streaming landscape.

The other woman on the board is Joan Amble, who has been with the company for more than a decade. She also serves as president of JCA Consulting as well as a board member of Société Générale and Zurich Insurance Group.

Liberty Media: One woman, 11 percent of board

Liberty Media, which is headquartered in Colorado, has become one of the most powerful companies in music this year. The conglomerate took majority ownership of SiriusXM in 2013, owns a 34 percent controlling interest in Live Nation and will now absorb Pandora, the largest internet radio service in the U.S.

Its one female board member, Andrea Wong, has served on the board since 2010. Wong was most recently president, international at Sony Pictures Entertainment until September 2017 and was previously president and CEO of Lifetime.

Pandora: One woman, 10 percent of board

Pandora has only one woman on its 10-member board. Mickie Rosen, the current president of Tribune Interactive, joined Pandora’s board in September 2015 and is also a board director of Australian media company Fairfax Media (publishers of the Sydney Morning Herald).

Despite gender inequality at the topmost ranks, Pandora remains one of the most outspoken music streaming services when it comes to diversity initiatives, and is the only such company to declare concrete internal diversity benchmarks, pledging 50/50 gender parity in both hiring and promotion practices by 2020.

Warner Music Group: One woman, 8 percent of board

Warner Music, the only private company on this list, also ranks last on overall female representation on its board. The company’s only woman director is international economist Noreena Hertz, who rejoined the board after a year-long hiatus and at the same time as Warner execs Jon Platt and Max Lousada.

According to the aforementioned report, Warner Music's U.K. office saw a 49 percent pay gap between men and women in 2017. Despite such issues around gender parity, several female Warner execs, including Atlantic Records executive vp Juliette Jones and chairman/COO Julie Greenwald, have been outspoken about the importance of supporting young women in the music industry.

“It’s important, as women, that we learn to use our power to support each other, plus be comfortable in asking questions and voicing our career desires,” Jones told Billboard in June. “We need more Julie Greenwald's and Sylvia Rhone's in the top seats -- someone who sees the potential in women. I don’t think men are up there systematically keeping us out. It’s just not top of mind for them.”


THE BILLBOARD BIZ
SUBSCRIBER EXPERIENCE

The Biz premium subscriber content has moved to Billboard.com/business.


To simplify subscriber access, we have temporarily disabled the password requirement.