Estée Lauder on Monday added two female CEOs to its board: Jennifer Hyman, co-founder and CEO of Rent the Runway, and Jennifer Tejada, CEO of cloud computing company PagerDuty. The additions will give Estée Lauder 17 directors, eight of whom are women.
The company’s executive chairman William Lauder told Fortune that the hunt for the two new directors began in earnest in October and sought one candidate with cyber experience and another with social-digital expertise. Tejada, 47, and Hyman, 37, fit those bills, respectively, Lauder says.
Tejada, who previously served as CEO of software company Keynote Systems, “has great deal of experience in the cyber world, more on the technical side,” Lauder says. “That’s very front-and-center in the minds of boards going forward.”
Hyman, meanwhile, “has deep consumer knowledge about why they’re shopping or why they’re choosing not to shop,” Lauder says. Plus, Hyman, whose wardrobe rental startup is reportedly valued at nearly $800 million, is familiar with the “language, tools and techniques, and best practices” of newer forms of media.
At 17 directors, the size of Estée Lauder’s newly-expanded board far exceeds the average 10.9 directors among Fortune 500 companies, according to Equilar analysis. Lauder says that’s due to the closely-held nature of the family-controlled company: there are four Lauders on the board. “We need to have a majority of independent directors,” he says.
Lauder declares himself a champion of boardroom diversity; he is committed to the 30% Club’s goal of achieving 30% female directors in the S&P 100 by 2020. Indeed, even before adding the two new directors, Estée Lauder’s board was already 40% female with seats occupied by the likes of former Burberry CEO Rose Marie Bravo, Ariel Investment President Mellody Hobson, and Lynn Forester de Rothschild, chair of private investment firm E.L. Rothschild. That’s nearly double the average share: of 5,519 board seats in the Fortune 500, just 22.7% are held by women.
“I’m a very big believer that you have to put a stake in ground: This is what we’re going to go do,” Lauder says. “It may or may not happen, but there’s a responsibility to say let’s find a way to make it happen.” Three-quarters of Estée Lauder’s employees are women and 95% of its customers are women, he says. “Why shouldn’t our board be reflective of that? Not as a hard-and-fast rule, but so you have that thinking and mindset,” he says.
Lauder attributes his board’s gender diversity, in part, to a tendency to tap into its own board network to find director candidates, rather than relying on recruiters. For the two new board positions, Lauder says two current directors each provided a list of 10 possible candidates who met the search criteria—women with cyber or social-digital experience, generally speaking—with no overlap. “There’s a lot more talented, capable women in this space than the press gives credit for,” he says.
Tejada, for her part, says women’s representation on Estée Lauder‘s board is what drew her to the opportunity to add to it. She says she fields inbound inquiries about board positions “multiple times a month—sometimes multiple times a week,” and it’s often obvious that a recruiter is just looking to tick the “woman box.”
“Sometimes you can tell; they just want to get women on the shortlist,” says Tejada, who also sits on her own board and that of Puppet Lab, a privately-held software company. She’s not against joining an all-male board, but she bases such decisions on what feels like the most natural fit with her background.
Companies “showcase their values by the nature of who they elect to join their board,” Hyman tells Fortune. “I didn’t want to be on a board where I have to represent the opinions of all women,” she says. Estée Lauder is Hyman’s only board position aside from her seat on Rent the Runway’s.
Beyond board culture and meeting the position’s criteria, Hyman says she was drawn to Estée Lauder’s ethos, particularly its history as a female-founded brand. (Estée Lauder started her namesake cosmetics company in 1946). Plus, Hyman says sitting on the board of a public company will inform her consideration of a Rent the Runway IPO.
Then there’s this connection:
Hyman attributes her current career to an opportunity she got years ago to start a first-of-its-kind honeymoon registry as part of Starwood Hotel’s innovation push. The CEO behind the initiative was Barry Sternlicht, now chairman and CEO of Starwood Capital Group, who also sits on Estée Lauder’s board.
“That’s the reason I became an entrepreneur in the first place,” Hyman says. “I’ll have to tell him that during our first board meeting.”
