By Bert Black |
The now infamous July 2017 Memo from a male Google engineer about the supposed limitations of women as techies and business leaders provides a fascinating glimpse into the gender bias that persists in corporate America. Often only veiled and implicit, this bias was all too explicit in the memo, which serves as a jarring reminder of how false stereotypes can impede the advancement of women into leadership roles. While the Memo purported to endorse diversity goals in the workplace, it then proceeded to describe a jumble of outdated stereotypes and gross misinterpretations about various “traits” that the author attributed to women in general. He argued that those traits affect women’s workplace performance and leadership ability.
An article by Claire Cain Miller in the August 13, 2017 New York Times Sunday Business Section pointed out that as a matter of science the author of the Memo got the biology and genetics wrong, but also missed badly on what it takes to be a successful business leader. An accurate presentation of the science in this area demonstrates that in many cases, female-associated traits can be more beneficial than not to both workplace performance and successful leadership. Moreover, a look at studies on comparative performance of men versus women as business leaders establishes that female-led companies often out-perform comparable male-led companies, making the best business case possible for continued enforcement of diversity goals.
A 2014 article posted on the American Management Association Website reported that women “CEO’s among the Fortune 500 are found to have stronger qualifications than their male counterparts.” The 24 women (4.8% of those holding such positions) “were found to have earned more rigorous academic degrees, have greater work and life experience when first appointed, and proved more often to have worked their way up internally.”
Even more striking, large companies led by women tend to do better than those led by men, perhaps a reflection that a woman has to be way over-qualified to even get a chance at leadership. A 2016 posting on InvestorPlace.com reported that during the previous year, stocks for S&P 500 companies with female CEOs delivered much better returns in terms of market valuation than male-led companies, a measure of performance that’s about as objective as can be. The “stock market is typically indifferent to matters of equality and principle and generally speaks only one language: share price.”
Performance comparisons between female and male led companies other than those large enough to be included in the two “500” indices are few and far between, but a 2016 posting on Strategy-Business.com by Matt Palmquist reported on a study of European companies, for which more data is available because of more stringent disclosure regulations. The study’s authors had a pool of information that covered 132,950 firms, and they selected matched pairs of companies very similar in every way except for the gender of the CEO. They found that overall, “the companies overseen by women tended to be older and more profitable [and] those run by men were typically larger and had a faster rate of sales growth.”
The European study also found other differences, but nothing that would suggest women are less suited to leadership than men. “The firms run by women carry less debt against equity, post more stable returns on assets, and are more likely to remain in operation than those led by men. Indeed, the likelihood of survival over five years was 61.4 percent for the firms with a female CEO and 50.5 percent for companies with a male CEO.” So do women seek positions at different kinds of firms than men, or do different kinds of firms have different gender biases in hiring? The answer is not clear, though the study authors suggest that the way women are treated and evaluated may explain much of the difference in risk tolerance. For sure, the data do not suggest any reason why we should not see much closer than a 50-50 mix of CEOs across the board. Women most definitely are not genetically disadvantaged.
The Google engineer’s Memo, however, provides a revealing glimpse into the mindset resulting in the persistent gender disparities in high level leadership positions. Despite the scientific studies that demonstrate otherwise, stereotypes about women lacking certain “male” traits (which are falsely equated with leadership success) persist in corporate America. Until these false stereotypes are eradicated, much needed diversity will suffer. Women leaders adversely affected by these stereotypes will find experienced advocates at Schaefer Halleen who understand how to address the effects of gender bias when it occurs.
Bert Black has been practicing law for over thirty years. His current cases are mostly in the areas of condominium development, employment, and consumer protection litigation. Before attending law school at Yale he worked for several years as an engineer, and over the course of his career many of his cases have involved complex scientific, technical, statistical, and financial issues.