Invisible Executives: Why aren’t women being seen in the board room?
Perspective by Kate Rowley, Venture Partner, Global Bio Fund
As I survey the landscape of venture growth and investment, more and more I am seeing involvement of women. In Feb 2021 it was reported that women now make up over 30% of the top 350 UK boards and there has been a rise in women centred VCs like Astia. To add to this Pitchbook analysis from 2019 shows that during the past decade the percentage of deals with women on founding teams has nearly doubled, from 7.9% to 15.7%. These are truly things to be celebrated for the progress being made but it’s simply not good enough. 30% board representation means that 70% is not female, most VCs still involve a majority of male decision makers and almost 85% of deals being made have no female representation on their team. We need more direct action to drive change.
I am not saying we aren’t making progress. We certainly seem to be, thankfully, well beyond the days in 2016 when LifeSci Partners LLC felt the need to hire scantily-clad women at a JP Morgan Healthcare Conference to ‘provide balance’. Women in the industry we are starting to be recognised and there’s good reason. Work by BCG, Pitchbook and the British Business Bank shows that investments in companies with a female founder performed 63% better than those with all-male founded teams. They have a higher internal rate of return (112% vs 48%) and gender diversity delivered high returns and a lower risk of failure. They are more likely to exit and provide faster routes to exit. The evidence is staring us in the face so why is the investment in and involvement of women still so poor?
A recent conversation with a company exec who approached us for support, on having been told that the company was ineligible having no women on his exec team, board or scientific advisory board, suggested that they were too young and not well enough funded. Is that what it takes to include women in senior roles? More money and more time? That just doesn’t seem to make sense given the performance indicators above. There are others within investment firms who just don’t believe that there is a problem, they don’t see gender representation as an issue but the question is do they see women executives at all? When a report from the BVCA shows that 75% of pitch decks that reach a VC contain no women it implies that some investors may not actually even see women to invest in them.
If we really want to make businesses as successful as they can be it is imperative that we build diverse leadership teams with female representation at leadership and board level. We know that the evidence shows that they will make better businesses, deliver better returns and exits. While the issues of diversity are complex and interdependent, funds that drive women as leaders to support them and elevate their presence will drive the creation of strong businesses that deliver for us all.
References
Source for infographic https://www.ecnmy.org/engage/does-putting-women-on-boards-really-matter/ copyright from Execucomp
https://www.bcg.com/capabilities/diversity-inclusion/gender-equality
Beauhurst, The Deal: Equity investment in the UK in 2020
Alex Keown LifeSci Bosses Apologize for Scantily Clad Women at J.P. Morgan Party After Pharma Execs Issue Letter. BioSpace.com Feb 08, 2016
PitchBook-All Raise All In: Women in the VC Ecosystem November 11, 2019 available from https://pitchbook.com/news/reports/2019-pitchbook-all-raise-all-in-women-in-the-vc-ecosystem
UK VC & Female Founders report, undertaken by the British Business Bank in partnership with Diversity VC and the BVCA
