Warner Music Group’s recently-announced plan to go public took the music industry by surprise. One detail included in the company’s initial public offering (IPO) should also raise eyebrows: The glaring lack of diversity on its board of directors.
Of the combined 18 total executives and board members listed in the company’s Feb. 6 filing with the SEC, zero are people of color, and just four are women, or about 22% of the whole.
WMG’s 11-member board includes just one woman (and again, zero people of color), as Boss Betty first pointed out. The sole female member is English economist Noreena Hertz, who rejoined the board in October 2017, after previously serving as a board member from May 2014 to June 2016. The board is led by chairman Michael Lynton and vice chairman Len Blavatnik (the multi-billionaire whose Access Industries owns WMG).
All nine WMG executive officers named in the filing — led by CEO Stephen Cooper and CEO of recorded music Max Lousada, who double as board directors — also appear to be white. There are three women included in that group: Warner Chappell Music co-chair/COO Carianne Marshall; WMG executive vp/CHRO Maria Osherova; and WMG executive vp, new business development — chief acquisition officer Oana Ruxandra.
Hertz appears to be the only woman to have served on WMG’s board in more than five years, according to the company’s annual Form-10K filings with the SEC. The board was entirely male on Form-10K filings from 2011 until her election in 2014, as well as during her hiatus between June 2016 and October 2017. The WMG board included two women in 2010, both of whom were first elected in 2006: Phyllis E. Grann, the trailblazing former president/CEO of Penguin Putnam, Inc.; and Michele J. Hooper, co-founder of Directors’ Council — a firm specializing in recruiting diverse candidates for corporate boards — who is African-American.
Aside from Hooper, former Warner/Chappell Music chairman/CEO Jon Platt is the only other person of color to have served on WMG’s board in the past decade, and only for a brief stint in 2017.
WMG did not respond to a request for comment at press time.
A widely-cited 2015 study from McKinsey & Company found that diversity in leadership is linked to greater financial returns: Companies with leadership in the top quartile for gender diversity were 15% more likely to have financial returns above their industry median, while companies with leadership in the top quartile for racial and ethnic diversity were 35% more likely to do so.
Goldman Sachs is underwriting WMG’s IPO along with Morgan Stanley and Credit Suisse. The company, home to Lizzo, Ed Sheeran and Cardi B, could be worth as much as $16 billion when it goes public. As Boss Betty also notes, Goldman CEO David Solomon recently pledged that starting this summer, the investment bank will help companies go public in the U.S. and Europe only if they have at least one “diverse” board member, “with a focus on women,” noting that U.S. companies that go public with at least one female director tend to fare “significantly better” than those without.
Even so, Warner is soon to join a slew of publicly-traded music companies with a glaring lack of diversity on their executive boards.
Over at Spotify, the 10-member board of directors includes three women and two people of color. Live Nation has two women and two people of color on its 13-member board. Of the 13 people on the entirely white SiriusXM Holdings Inc. board, two are women. Madison Square Garden, which is soon to spin off its entertainment business from its sports segment, has room for 16 people on its board, but that includes just two women and one person of color.
Meanwhile, WMG’s major label competitors, Sony Music Entertainment and Universal Music Group, fare only slightly better in terms of diversity in leadership.
Because both their parent companies — Sony Corp. and Vivendi, respectively — have their own boards of directors, neither major label has its own official, public-facing such board. (For what it’s worth, women comprise four of the 13 people on Sony Corp.’s board of directors, the majority of whom are Asian. Vivendi’s two-tier governance structure currently consists of an 11-person Supervisory Board with six women, including one person of color, and a 7-person Management Board which is entirely white and male.)
Of the 12 key executives listed on the Sony Music Entertainment website, three are women. Those are executive vp/global head of corporate communications Amanda Collins; Epic Records chairman/CEO Sylvia Rhone; and executive vp business affairs & general counsel Julie Swidler. Rhone appears to be the sole person of color listed. (It’s worth mentioning that Platt is now Sony/ATV’s Music Publishing chairman/CEO, though he is not part of the list.)
At Universal Music Group — which expects to file its own IPO by early 2023 — the 11-member Executive Management Board appears to include just two women (executive vp Michele Anthony and Universal Music Publishing Group chairman/CEO Jody Gerson) and two people of color (general counsel/executive vp business & legal affairs Jeffrey Harleston and executive vp, human resources Gautam Srivastava, who is Indian).
For many corporate boards, the lack of turnover and election processes can present obstacles for increasing diversity. According to WMG’s IPO, each board director will hold office until his or her successor has been “duly elected and qualified, or until his or her earlier death, resignation or removal.” And when new directors are elected, they are likely to have served in executive leadership positions, a pool that often excludes women and minorities.
This is beginning to ever-so-slightly change. When WMG goes public, it will join the S&P 500, where all companies have at least one female board member, as of July. And the percentage of women joining boards reached a new high in 2019, with 45% of new Russell 3000 stock market index board seats filled by women, according to a May analysis of board diversity trends from ISS Analytics, the research arm of Institutional Shareholder Services.
In Warner Music UK’S legally-mandated 2019 gender pay gap report, which the UK government made an annual requirement for companies with 250 employees or more in 2017, the label said it is “committed to achieving full gender equality at every level of our business,” while admitting that “we’re still a long way from achieving that aim, but we’re travelling in the right direction and making progress.” Last March, Warner Music UK named its first-ever head of inclusion and diversity.