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.
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