Having a Conversation Isn’t Progress: Pao versus Kleiner, Perkins, Caulfield & Byers
Late last week, Ellen Pao lost her gender discrimination case against Kleiner, Perkins, Caulfield & Byers. Kleiner is a major venture capital investor in Silicon Valley. Ms. Pao alleged that she was passed up for promotion because of her gender and discriminated against her for complaining about her treatment. Although Ms. Pao lost the lawsuit, many commentators have tried to extract a victory by asserting that the case has started a conversation on the role of women in venture capital and finance.
Over the past several years, “starting a conversation” has become a substitute for making change. When white police officers aren’t indicted for killing unarmed black males, commentators intone that there’s been an advance because we’re having the conversation about racial profiling. The same refrain is used when it comes to the reporting and disposition of sexual assaults on college campuses. The idea is that we’re making progress because we’re sitting down and talking about controversial issues. The beer summit in the White House garden between President Obama, Vice President Biden, Professor Henry Louis Gates, and police sergeant James Crowley is cited as the great example of “starting a conversation.”
However, we’re not having quiet and reasoned conversations on any controversial subject. Rather we’re engaging in a great deal of posturing and dueling press releases. The beer summit wasn’t a model for starting a conversation. It was just four guys having a beer.
When it comes to the investment business, males dominate the senior ranks of the industry. I’ve written about this in the past (for example, “The Case for Diversity: Hire Women to Manage Money” [1/19/13] and “Drawing the Wrong Inference: In-state Investing in NC” [9/2/14]). The hard data suggests that nothing is changing. Moreover, the Pao trial revealed a locker-room environment that is all too familiar at some brokerage firms, hedge funds, and money management firms. To be clear, many firms do not tolerate sexist behavior, and some firms have promoted women into senior positions. Nonetheless, the industry’s culture is still male-dominated, and its record is poor.
In a nutshell, here’s the conversation in the wake of the Pao verdict. According to The New York Times, Kleiner issued a statement saying that it was committed to supporting women. At a press conference, Ms. Pao said, “If I’ve helped to level the playing field for women and minorities in venture capital, then the battle was worth it.” This isn’t the start of a conversation; it’s just the usual platitudes. One side makes a meaningless statement using the word “committed” and the other side invokes “level playing field.” In the end, very few firms are committed to helping women or minorities. They are committed to making money. As to the playing field in finance, white males continue to occupy the high ground and it is largely impenetrable.
Until investors and politicians insist on a different set of values, the culture of investing will remain unchanged, even if the next woman to challenge the system wins her case. My former industry is more than happy to have the conversation as long as they don’t have to make real change.