Goodwin Procter, Clients Push to Diversify Public Company Boards

Goodwin Procter is teaming up with investment and venture capital firms to try to diversify the boards of publicly-traded companies.

Stuart Cable and Lisa Haddad, partners in Goodwin’s M&A practice, created an annual program that begins virtually this summer for about two dozen women and minorities—one third of whom are Black. The goal is to have each participant on a board within a year.

“We want to help jump start board careers,” Cable said in an interview.

The lawyers and their clients are trying to put a dent in figures that show White people hold 84% of Fortune 500 board seats, based on a January 2021 Society for Human Resources Management study. Blacks hold only 4.1% of board seats in the top 3,000 companies, and Latino representation is at 2.2%, the study found.

“Studies and data have consistently shown diversity in the boardroom brings critical new perspectives and enhances Board and company performance,” Haddad said.

Yet education and training programs haven’t been enough to increase board diversity, Cable said. “Networking is how you get your start,” he said.

Cable and Haddad canvassed Goodwin clients for willingness to participate in the effort. Companies that have gotten involved include Accel, a Palo Alto, Calif.-based venture capital firm; private equity firms Blackstone Life Sciences and Charlesbank Capital Partners; and Flagship Pioneering, a life sciences venture capital firm that has invested in companies like coronavirus vaccine maker Moderna.

The Goodwin partners then assembled the first group of participants for the program, called GOOD Directors, from some 150 candidates suggested by the companies. The group includes chief executives, chief financial officers and chief business development, strategy, scientific, marketing and product officers.

Among those selected are Percival Barretto-Ko, chief business officer at Astellas Pharma Inc.; Ambaw Bellete, chief operating officer at FerGene; Bhakti Bhargava, senior vice president at ElevateBio; and Howard Davis, COO at Third Harmonic Bio.

Goodwin’s program will help close the gap for experienced candidates who lack the titles search firms and companies look for when they seek to fill board candidacies, said Sara Martinez Tucker, a former AT&T Inc. executive and former Education Department official who served on several company boards.

“I was never a CEO or a CFO, but I ran large departments and had deep operational experience,” said Tucker, who advised Goodwin on the program. “What’s missing from board recruitment efforts are those connections that show what you can do.”

Cable and Haddad are drawing on the case study method they used over the past decade in annual forums to educate board candidates. They decided to try to make their efforts more concrete by enlisting client companies not only to come up with candidates, but to also place one in a company board seat.

One client consulted was Tony Coles, CEO and chairperson of Boston-based Cerevel Therapeutics, which researches neuroscience diseases. Coles, who heads the spinoff from Pfizer, noted that “educating a new generation of directors, and to have a board seat, is very rarely paired.”

He is among those who has committed to mentor one of the newly-minted program members. His 11-member board, he noted, is already diverse with three people of color, including former Massachusetts Gov. Deval Patrick, and three women.

“There is a need because companies with diverse management perform better,” he said. “Despite really good efforts, we still have a paucity of people of color and LGBT, and this is a good way to bring more diverse people into the boardroom.”