The evidence is piling up. Companies with more women in charge are better businesses. So why are so many biotechs still led mainly by men?
Saira Ramasastry, a former Merrill Lynch analyst, is now a Bay Area consultant on the boards of three biotechs, including Sangamo Biosciences (NASDAQ: SGMO). Having benefited from female mentors such as Harvard University professor Vicki Sato and longtime Shire executive Gwen Melincoff, Ramasastry says, “I feel there’s been progress, but biotech absolutely has a gender gap.”
Writ large, the gender gap could amount to an economic anchor weighing down global productivity, as the McKinsey Global Institute reported last year. Then in February, The Peterson Institute for International Economics published a global study, funded by EY, which counted nearly 22,000 companies across industries and across the world. Those with 30 percent or more female leaders showed an average 6 percent higher net profit margin. The Peterson study has its caveats, but it builds upon momentum from an earlier study by the bank Credit Suisse that surveyed a smaller pool of companies and came to a similar conclusion: Gender diversity at the top of the org chart is good for the bottom line.
Some people in biotech, and some companies, get it. But the numbers show there’s a long road ahead before women, who are half the workforce, have a similar presence in the upper ranks. A 2014 report from U.K. executive recruitment firm Liftstream is often cited as the most comprehensive study of gender diversity for public life sciences companies. Liftstream surveyed nearly 1,500 public companies in the U.S. and Europe and found that more than half of boardrooms were all male (52 percent in the U.S., 60 percent in Europe). The percentage of women directors and top managers varied depending on the size of the company, but not by much. At small-to-midsized U.S. companies, just 9.7 percent of directors and 20.9 percent of leaders were women; at big companies the number of female directors went up slightly, to 19.2 percent, but leadership numbers came down to 13.9 percent.
Liftstream also surveyed life science venture capital firms. A dismal 9.6 percent of partners were women in traditional VC firms, but the rate nearly doubled for corporate venture groups, such as those at Pfizer and Roche—both of which are run by women. VC numbers are important because for new biotech companies, the VCs, who get director seats as part of their deal terms, make up a big part of the board.
Last year, Liftstream followed up with a survey on private biotechs that noted all companies raising cash in a six-month period across 2014 and 2015. Of those companies, 51 percent had an all-male board, and just 17 percent of the executives they appointed during that time were women, with a range from 32 percent for VPs to 15 percent for board members.
One might hope that Liftstream’s eye-opening reports, plus this one in Nature Biotechnology, plus the backlash against New York investor relations firm LifeSci Advisors’ now-notorious staffed-by-models J.P. Morgan party in January, could be moving the needle in a positive direction.
I asked Liftstream CEO Karl Simpson if he’s seeing more interest in recruiting female candidates. “It’s more what I would call consciousness and awareness,” Simpson said. “There are more discussions now with boards about gender diversity,” but if there is an uptick, “it’s too small to call a trend.”
Discussions are nice, but many in the industry are looking for solutions. Xconomy is hosting a series of dinners—the first was in April in San Francisco—bringing together women in biotech, and a few men as well, to hear what works, and what doesn’t, in bridging the gender gap. What I learned during last month’s dinner and subsequent conversations with folks from around the industry fell into three main themes.
—Boardrooms and C-Suites: If change from the top is going to happen, recruitment practices need to change. There are barriers. In startups, there’s the aforementioned VC problem. And when time comes to find outside directors or C-level executives, tiny companies going a million miles a minute can’t afford to hire a recruiter, so they dip into personal networks and feel pressure to move fast.
“If we keep looking for the been-there-done-that CEO, or the veteran board member that we’ve served with before, or calling our same network on references, then we’ll likely be recycling the same list of men,” says Nina Kjellson, a general partner at Canaan Partners who co-hosts an annual “Women in Venture” dinner at J.P. Morgan every year. “What about the woman at the VP level? The female exec from another industry? The academic or not-for-profit leader? Until more women get the chance to rise to the ranks and build the experience, we won’t have them in the pool for searches.”
Liftstream found that of the women in biotech C-suites they surveyed, only 16 percent had been contacted for non-executive board positions, compared to nearly 60 percent of their male counterparts.
Biogen (NASDAQ: BIIB) has taken an unusual approach to the problem: Increase the supply. In early 2015 it began a training program for women in its upper ranks to prepare them for board seats outside Biogen. The report card: 13 women entered the program, called Raising the Bar. Two left Biogen before a placement, one was placed but then retired. Of the other 10, five have found board seats and five have not.
A new cohort is on its way, and the program is going national. Biogen is transferring stewardship to the volunteer group Women In Bio, according to Biogen senior director of diversity and inclusion Javier Barrientos.
In early stage biotech, where so many personnel choices are driven by the venture investors, the low female VC numbers don’t bode well. But venture firms can make a difference. When Rosana Kapeller, the CSO of Atlas Venture portfolio company Nimbus Therapeutics took the industry to task last September, Atlas partner Bruce Booth immediately issued a mea culpa. The number of women in the C-suites of Atlas companies was “shocking[ly] low,” Booth wrote on his well-read blog.
I asked Booth for an update. Via e-mail Booth said, “We’re too small for ‘policies’ and such,” but since September, three Atlas-funded companies have added four female directors, “so we are trying to do more.”
—Policies, Programs, Practices: Booth’s comment raises an important question. Would small biotechs be helped or handcuffed by rules aimed at closing the gender gap? A few European countries have instituted quotas for women on boards. The Peterson study found no evidence that those quotas, such as Norway’s 40-percent threshold for state-owned businesses and public companies, “have any significant impact, positive or negative, on company performance.”
Quotas will be a tough sell in the U.S. Even a majority of people at our San Francisco dinner were uncomfortable with the idea. But a CEO of a private biotech offered that a company can send clear signals through its policies that it is woman-friendly. Maternity leave comes to mind immediately, but perhaps less obvious is paternity leave. More liberal paternity leave policies correlated with more female board seats, the Peterson study found: “It stands to reason that policies that allow child care needs to be met but do not place the burden of care explicitly on women increase the chances that women can build the business acumen and professional contacts necessary to qualify for a corporate board.”
Also important is clear guidance about behavior. What does the employee handbook say about harassment, for example?
Whether codified or not as policy in the handbook, there are programs and practices that might help foster gender equality. For example, training executives to spot and reduce unconscious bias is catching on, driven in part by Google’s use of the data-heavy methods to reverse its own dismal diversity numbers, self-disclosed two years ago. (Biogen CEO George Scangos told Liftstream that it was “the best HR training I’ve ever participated in.”) But the recruitment firm said in its 2014 report that a majority of biotechs had not yet put procedures in place to head off unconscious bias. It’s unclear how much of the industry is training employees at this point, but it’s worth noting that with all the academic research into unconscious bias, there are scant real-world results. Google’s 2015 diversity report looked practically the same as 2014.
Companies might also try to steer employees away from informal practices that feed exclusionary, male-tilted behavior. (The cliché is the Saturday golf outing.) While it would be hard to stop employees gaining the ear of key managers over drinks after work, a company could compensate by working harder to open lines of communication during work hours.
“Visibility is important for mobility,” says Sachiyo Minegishi, whose career began in the macho world of finance. She has since moved to biotech and is currently in charge of the sickle cell and oncology business at Bluebird Bio in Cambridge, MA. “The more you can articulate ideas to senior leadership,” she says, “the more you can move forward in your career.”
Starting with a sales position at Amgen 10 years ago, Minegishi has moved to smaller and smaller companies, preferring less bureaucracy. “I’ve been working my way down,” she says with a laugh. Smaller companies tend not to have formal advancement programs, but “the women I talk to in small biotechs say they don’t feel as much gender bias,” Minegishi says.
—Stick Your Necks Out, Men: Several women I spoke with said women’s groups inside larger companies were not helpful. A common refrain: Men have to be involved in the diversity conversation. The United Nations’ “He For She” program came up as a template: men working with and advocating for women. In the workplace, that translates into men not just being mentors but active promoters. “A lot of companies have women-mentoring programs,” says Ramasastry. “A mentor is great, gives you the benefit of their experience, counsel, maybe some introductions, but when a promotion is put up, will she advocate for you, call [the person hiring] and talk about your skill set?”
Given the gender imbalance in the higher ranks, men have to be advocates. They have to stick their necks out for women. During our dinner conversation in San Francisco, some women around the table had reservations about advocacy programs being forced, and thought they had to be volunteer-only, without political correctness or subtle pressure on those who declined to participate. Easier said than done.
LifeSci Advisors, pilloried for the J.P. Morgan cocktail party that featured models in skimpy dresses hired to mingle with the guests, has gotten gender religion. The firm says it will launch a program with Women In Bio in about four weeks to help women crack the glass ceiling and “make the leap to the board position,” says cofounder and CEO Andrew McDonald. That follows on the firm’s commitment to help Girls Inc. New York City to teach STEM subjects (science, technology, engineering, math) to girls from 8th to 12th grade. “They encounter roadblocks to doing science that I as a male never encountered and didn’t see until I paid attention more,” says McDonald. His firm has also pledged to place 15 women on boards by the end of 2017. A new advisory board—which includes Kate Bingham, the veteran life sciences VC who co-wrote an open letter excoriating LifeSci—is meant to keep tabs on the firm’s promises.
Saying the party episode didn’t lose LifeSci any clients, McDonald isn’t shy about using his new platform to call others out. The BIO trade group, he says, should take a stronger stance on board composition, perhaps pushing for quotas like other countries have adopted. He also points to VCs, “some of which signed the open letter. Yet when they hold the mirror up to themselves, they haven’t done anything to change.”
There are more ideas out there. As I work on more stories related to biotech’s gender gap problem, I’d love to hear yours.
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