In 2019, when Corbin Petro helped get Waltham startup Eleanor Health off the ground, she and her two female cofounders found themselves working with a board of directors that was pretty typical for a startup: four white men.
Petro wanted to change that, and it was a chance encounter with another chief executive over drinks that motivated her to do it.
Earlier in her career, she had worked as chief operating officer for Massachusetts Medicaid, and ran a health care joint venture in New Hampshire that involved Harvard Pilgrim. Eleanor Health focuses on the estimated 20 million Americans with substance use disorders, aiming to provide medication and mental health services virtually and at 28 in-person clinics. The company is paid by insurers, with the goal of reducing the cost of serving those patients. That can happen, for instance, by driving down the number of visits to emergency rooms — the so called value-based health care model.
Eleanor has raised $82 million in venture capital funding — a big chunk of it from the Cambridge firm General Catalyst. It employs about 300 people and expects to serve more than 60,000 clients by the end of this year.
Petro says she is a married gay woman. One cofounder, Nzinga Harrison, is a Black psychiatrist and addiction medicine specialist. A third cofounder, Srishti Mirchandani, helped shape the business concept as a project inside of Oxeon Partners in New York. (Mirchandani left to work for another health care startup earlier this year.)
“We were built on a really strong foundation of equity and diversity,” Petro says. “Our team is very diverse, and we report out on that.” But with four male directors helping to supervise the company, she felt “it was almost like the board didn’t reflect the rest of the company. There was a disconnect.”
Petro was inspired to act after attending an awards dinner in Philadelphia where she bumped into Gail Boudreaux, the chief executive of Anthem. The Indiana-based health insurance company boasts $137 billion in annual revenue. “We were talking about board diversity,” Petro recalls, and Boudreaux said her goal was 50 percent men and 50 percent women. “I said, ‘I don’t really control my board.’” Boudreaux’s response: You always control it. “She’d dug her heels in on it, and I was like, ‘I could dig my heels in, too.’”
Eleanor’s board had an open seat for an independent member — someone not tied to the company’s investors and founders. “When you’re heads-down building the business, you’re not totally focused on deploying that independent board seat,” she says, explaining why it had sat empty. Petro asked friends for recommendations, including Phyllis Yale, a longtime management consultant at Bain & Co. who focuses on health care. Yale pointed her to Kyle Raffaniello, a New Jersey-based health care chief executive. (Raffaniello is a woman, and now holds a seat on the board.)
When board member Andy Slavitt was appointed to a role overseeing pandemic response in Washington, that opened up another seat, and the board redo continued. Petro spoke with one of her investors, who had recruited Slavitt for the board, and they identified Rachel Winokur, an entrepreneur who had built and sold a network of primary care clinics. When the private equity firm Warburg Pincus came in as a new funder of Eleanor, Petro says, she and the investors there “brainstormed a list” of men and women with “strong behavioral health expertise.” They landed on Christina Mainelli, chief executive of a New York health care analytics startup, Quartet Health. Both Winokur and Mainelli joined the board.
The company now has a seven-member board with four women on it, all people who have built companies. “I would say in some ways, we still have work to do,” Petro says, noting that all the members are white.
A 2021 report by BoardReady, a Seattle nonprofit that works on issues of board diversity, looked at companies in the S&P 500 index and found that companies with more than 30 percent of their board seats held by women generally outperformed companies with less diverse boards. (Unfortunately, that study also found that there wasn’t yet enough racial diversity on public company boards to analyze its impact on performance.)
Jenny Abramson says there are other important rationales for companies to build more diverse boards. She’s the managing partner at Rethink Impact, a venture capital firm that only backs women founders; Abramson advised Petro on reshaping her company’s board, and put money into it as part of an April funding round.
“If you are a company serving women and men, and racially diverse customers, to not have those perspectives on the board when you’re making your key strategic decisions is not great from a business standpoint,” Abramson says.
Petro says that bringing women onto the board who have built startups “was really important,” and has led to “much richer” discussions about the decisions and trade-offs that need to be made as a company grows. “You can’t just say, ‘I want a woman on the board,’” she says. “It has to be filling a need, in terms of capabilities and expertise.”
Abramson and others observe that it can be easier to remake boards when a company is still young, rather than after it goes public; at that stage, being named to a board often requires having a lengthy resume of other experience at publicly held companies.
There are several local programs that exist locally to help train women to serve on company boards or connect them with opportunities. Deloitte & Touche, the auditing firm, runs a four-month program called Board-Ready Women. Jessica Ackerman, a partner at the firm, says it has placed 20 of its graduates on 27 different boards. The Massachusetts Technology Leadership Council, a trade group, will run its Board-Ready Bootcamp again this fall; it is open to people of any background that is underrepresented on boards.
And a very seasoned group of women have formed The Last Mile, a pro bono initiative that describes its key objective as “to see more qualified female directors on boards.” A key focus is on building a list of women with the credentials to serve on private and public company boards. Its founders, including Deborah Ellinger, Pamela Reeve, and Pam Lenehan, have board experience at companies that include iRobot, TJX Cos., DentaQuest, and The Princeton Review. Ellinger says the initiative has compiled a database of 700 prospective board members and placed more than 20 women on boards last year.
Training and identifying prospective board members addresses the supply problem. But there also needs to be more demand from Boston’s ecosystem of startups to move the needle on board diversity.
Petro believes it is there — just buried, at times, under more pressing business issues. She says she now has conversations with founders “who were in my seat from two or three years ago, and don’t realize there’s an option. We talk about mapping it out.”
Changing the status quo will happen like it did at Eleanor Health: one board member at a time.