Risk & Compliance

WeWork to Add First Woman Board Member

The company faced questions about its diversity practices ahead of its IPO.
Lauren MuskettSeptember 4, 2019

The We Company, owner of office-sharing startup WeWork, named Frances Frei as the first woman member of its board of directors amid investor criticism as it pursues an initial public offering. Frei will join the board once it completes its IPO, planned for later this month.

Frei, a professor of technology and operations management at Harvard Business School, is credited with helping to change the culture at Uber, which was described as toxic under the company’s founder and chief executive officer Travis Kalanick. Frei was hired at Uber as senior vice president of leadership and strategy in June 2017, just before Kalanick’s resignation. Frei left Uber in February 2018.

The We Company said it would add another director to its board within a year of the IPO, “with a commitment to increasing the board’s gender and ethnic diversity.”

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Big institutional investors including BlackRock and State Street have been critical of all-male corporate boards saying more diverse boards make better decisions.

The We Company also announced that CEO Adam Neumann would return a $5.9 million payment he received from the company for use of the trademarked word “We” amid concerns from corporate governance experts over Neumann’s arrangements with the company, where he is the controlling shareholder.

“The challenge is, from my vantage point, you’ve got a CEO who is going to control decision making that has to date not demonstrated the good judgment that I would expect from the CEO of a public company,” said David Erickson, a senior fellow and finance lecturer at the University of Pennsylvania’s Wharton School.

The company was valued at $47 billion earlier this year, but it has been criticized for its corporate structure and huge losses. It reported revenue of $1.54 billion in the first half of this year, twice the revenue for the same period last year, but its losses were $900 million.