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BIO Has Big Diversity Goals. Does It Have the Means to Reach Them?

Xconomy National — 

Whether from embarrassing parties or sobering surveys, the biotech gender gap problem has made plenty of headlines the past couple years. The industry’s largest trade group, the Biotechnology Industry Organization (BIO), is trying to encourage its more than 1,000 member companies to do better.

Last winter, BIO posted diversity goals for the industry to hit by the year 2025, and last week, BIO sent a letter to remind members of those goals: gender parity—50 percent women—among company leadership, as well as 30 percent female board membership. Current estimates put the industry’s rank and file at 50 percent women, but women comprise only 25 percent of leadership roles and 10 percent board seats.

BIO’s letter also called for more racial diversity and LGBTQ representation, but the organization is only setting gender goals for now because of data already available, such as a 2017 report which found that women held just 11 percent of board seats among the 177 biotechs that went public from 2012 to 2015.

Just as a now-infamous cocktail party during the 2016 J.P. Morgan healthcare conference sparked urgent conversation about diversity, an offsite party during this year’s BIO convention week brought the topic again to the fore. The party, PABNAB (Party at BIO Not Associated with BIO), featured topless women dancing on stage with names of company sponsors—some of whom are BIO members—painted on their bodies. (BIO itself has nothing to do with the party, which has been taking place since the mid-2000s.)

Last week’s letter, signed by BIO’s top executives, was its first official note to members in the wake of PABNAB. Why wait four months? And beyond setting goals, what specifically is BIO doing to make the industry’s upper echelons more diverse? Xconomy reached the chair of BIO’s Workforce Development, Diversity & Inclusion committee Helen Torley to ask these questions. (Torley is also CEO of San Diego biotech Halozyme. Two years ago, she was named in a study as the only woman CEO among 44 San Diego biotechs. “When the report came out, I was absolutely gobsmacked,” she says.)

The trade organization is planning to conduct a regular diversity survey and to make an “HR toolkit” available on its website early next year, including a database of diverse candidates for board positions. But while last week’s letter threatened “membership review” if companies do something ”inconsistent” with its diversity “values,” Torley says BIO will not punish its members—the more than 1,000 are split 25 to 75 percent between public and private companies—if they can’t hit the diversity marks, Torley says. “We don’t want to be draconian.”

Xconomy talked to Torley about making a business case for diversity, how best to get companies to reach these goals, the risk of tokenism, and more. Our conversation has been edited and condensed.

Xconomy: Do you feel confident that pledges of diversity will go beyond political correctness or lip service?

Helen Torley: Definitely. What we’ve managed to change in the last two years is that diversity’s not all about political correctness of gender and race. It’s needed to make drug development successful: a diversity of gender, race, background, skill sets, creating inclusive cultures where the best ideas win in a much broader sense. That concept is being embraced. People better understand the business impact.

All the studies show a correlation [between diversity and business success], and investor groups like CALPERS and Blackrock and Wellington insist on sending letters to companies to say you must get diversity on your board and in your C-suite.

X: Is it dispiriting that you have to make the business case to convince certain people before they take diversity to heart?

HT: As a mother of daughters, I’m surprised we still face this in today’s world. But many people, frankly, haven’t been in organizations that have been diverse. Everybody just hiring everybody like themselves is such a natural comfort zone, so the idea of bringing in different people, some people haven’t seen it before. You have to bring the facts. We’re a data-driven industry.

X: If BIO’s 2025 goals have been posted on its website since December, why did you send the letter last week?

HT: To continue to highlight the importance of diversity, but also to take a stand with regard to how BIO would expect its members to behave, which in part was coming after PABNAB. After PABNAB there were quotes from [BIO chair] John [Maraganore] and [BIO president and CEO] Jim [Greenwood] on the topic, but we hadn’t had an official communication being clear that those behaviors don’t fit.

X: Nothing specific happened to prompt a reminder?

HT: There was no specific stimulus. It was a nice opportunity to remind all our members. It takes many times for people to hear and take action on a message. We’re hopeful that by the first quarter of next year, we’re going to have several tools available that CEOs can use, especially in smaller companies that may not have the resources or staff that larger companies have.

X: What do you mean by “tools”?

HT: I’ll start with metrics. We do not have good metrics on race or LGBTQ. You’ll see in the first quarter a survey to get better metrics across multiple dimensions of diversity so we can set goals outside of gender. Gender is a leading indicator, but all these other constituencies deserve to see us track [their interests] with equal energy. We’ll repeat the survey annually or biannually.

We’ll also develop an HR toolkit that will be available on the BIO website for companies that want best practices in succession planning: How to do sponsorship programs, how to do mentorship programs. How do I make sure I’m advancing a diverse set of candidates and unconscious bias isn’t creeping into it. That’s still in development.

I look at my career. Perhaps I didn’t have all the experience and background for a role, but somebody in the organization decided I showed the leadership potential. What made me most able to be a CEO was at Amgen, I moved from a strategic marketing function to running a P&L [a “profit and loss” business unit within the company]. Somebody took a major chance on me, given I didn’t have a lot of commercial background. Those types of things accelerate and develop talent. Large companies do that all the time. It’s harder to do in smaller companies.

X: Any other tools?

HT: We’re creating a database. CEOs can nominate their talented candidates into the database and BIO members can search it for particular skillsets so they can add diverse candidates to their search for board positions.

X: These are ambitious goals by 2025. A lot of companies are at zero.

HT: These goals are not that dramatic, in my view. By doing the interim metrics we’ll see if we’re on track. It won’t just be BIO doing this. Investors are also very focused on this, and California companies are being mandated to put a woman on the board.

Small companies can get access to funding because there are female-only funds available. It’s not BIO talking about this in a vacuum.

X: What do you think of the California law? Not everyone is on board with a legal quota.

HT: It’s always a worry that quotas can be seen as resulting in tokenism. There was a bit of backlash. But there are a lot of qualified candidates who can be on boards, and our database will be helpful for that. I worry that a few people will feel it’s a political correctness coverup, but I think we should embrace it.

X: Whether it’s government mandating quotas or a powerful trade organization like BIO suggesting quotas, isn’t that risking tokenism?

HT: BIO isn’t suggesting quotas in any way. Goals are very different than quotas. BIO is raising awareness: how to develop a more diverse set of candidates for the top of the house and how to access the already large pool of diverse candidates who aren’t being called. Half the time I guarantee the women and racially diverse candidates are going to win. They simply aren’t getting their shot. If you have the philosophy of always bringing forward diverse candidate slates, you will achieve the goals. Not quotas: that risks people picking the wrong people.

X: Let’s talk carrots and sticks. BIO has a stick in its hand, which is membership. And you’ve already waved that stick a bit after PABNAB, to say if there’s more bad behavior your membership will be up for review and we might kick you out. If companies are recalcitrant about meeting BIO’s goals, could they be kicked out?

HT: There may be occasions where the most qualified candidates happen to be male candidates. There will be times at my company where I skew to one gender or another. BIO wants a CEO to make sure you have diverse candidate goals and pick the best person. We don’t want to be draconian, you have to leave it to the CEO to figure out the best candidates.

X: No sticks, then. What about carrots? What can BIO do to reward companies that have increased diversity?

HT: We haven’t focused on that. One thing we do is have CEOs write articles, showcase them. Some form of recognition and acknowledgement will probably be important.

X: It’s hard to increase board diversity in the private sector because boards include a lot of venture capitalists, who are still largely a boy’s club. Does BIO have to put pressure on the biotech VCs?

HT: We need to work on the early part [when creating startups]. We don’t have an answer, we’ve focused so far on public-stage companies.

X: How has the #MeToo movement affected the push for diversity in the biotech sector?

HT: It doesn’t come up often in conversation. We as an industry have had appropriate behaviors for a long time. I’ve heard very little. The only controversy I can think of recently has been the PABNAB party. People say sometimes in early startups it’s a different dimension. I read some articles about that recently. That’s not been my experience.

X: Have you run into companies that don’t have an accepting culture, or old-school male executives who are hostile to changing company culture?

HT: That hasn’t happened to me working on this diversity initiative. Now, there may be inertia to take action, and a fear of not finding someone with the right experience. That’s a more common pushback: “What if I find a more qualified male?” I say, “Then you’ve got a more qualified male, but make sure you’ve looked to interview a very qualified diverse candidate, too.”

Image by Wonder woman0731 via a Creative Commons 2.0 license.