(Bloomberg) -- WeWork Executive Chairman Marcelo Claure promised the company’s staff that the co-working startup will boost diversity on its all-male board of directors.
The company had said last month that it was adding a woman, Frances Frei, upon the completion of its initial public offering. She was not mentioned in a statement Wednesday about governance changes. Frei is no longer expected to join following the withdrawal of the IPO, said a person familiar with the matter who asked not to be identified discussing personnel moves. Frei referred a request for comment to WeWork, which declined to comment.
In Claure’s memo to staff sent Thursday that was seen by Bloomberg, he said: “I can assure you that you will see more diversity on the WeWork board and management team.” His message follows the announcement by WeWork late Wednesday that named new representatives to the company’s board: Claure and Raine Group’s Jeff Sine. As it stands, the company’s top three executives are male, and the entire board is composed of men.
Shortly after Claure’s memo, WeWork’s commitment to workplace inclusion was further called into question. A former employee filed a complaint with a U.S. civil rights agency alleging discrimination. Medina Bardhi, who was chief of staff to former Chief Executive Officer Adam Neumann, said she was demoted twice after she became pregnant and that Neumann referred to her maternity leave as a “vacation.”
The board now has nine men and a male observer, Neumann. SoftBank Group Corp., the largest investor, has the right to appoint two other directors. Lax corporate governance was a major issue for public investors during the IPO process, and the continued lack of a woman should be a concern, said Abby Adlerman, CEO of Boardspan Inc., which offers governance services to companies. “It’s a shocker that they came up with a board that has no diversity in any respect,” she said.
WeWork’s parent company We Co. received an early payment this week of $1.5 billion from SoftBank as part of a bailout package. The investment, announced back in January, was originally scheduled for April 2020. The deal was accelerated to rescue the troubled co-working startup after a failed IPO.
In his memo, Claure also told staff that WeWork has “no plans to entirely exit any market,” contrary to reports that have suggested it could scale back in markets including China and Latin America.
“We are evaluating operations and assets across all markets,” he said, adding that no decisions have been made.
Claure addressed another elephant in the room at WeWork -- the fact that many employees have strike prices for their stock that is above the $19.19 price that SoftBank is offering as part of the bailout.
“After we launch the tender, we will separately look into employee equity and compensation plans to make sure everyone can share in the company’s upside,” Claure wrote.
As for impending job cuts, the Sprint executive told staff “anxiously awaiting clarity” on their future at WeWork that management hoped to have answers in the next month.
(Updates with former employee’s complaint in the fourth paragraph.)
--With assistance from Candy Cheng.
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