With one wrong footing, the world’s second most valuable startup, WeWork’s leap to seventh corporate heaven turned into a back-breaking fall to scandalous abyss. But then, how far can any of us fly with a foot tied to the tight leash of outmoded culture? Not a single woman in leadership? Discrimination cases? Onlookers instantly picked up all the awkward moves in this spectacle. In the broad daylight of impartial public scrutiny, its initial IPO revealed itself as another well-fed mangy rat that scurried past media, people, funding bodies and displaying all its sickly mien. The question was - who was going to buy it?
After much demeaning backlash and ridicule and, a sharp tumble in its IPO, the co-working giant has now appointed Frances Frei, a Harvard Business School Professor, to its board all in a jiffy - A genuine change of hearts or a mere damage control mechanism, only time will tell. It slashed its IPO by 50% and has shrunk its numbers from USD 47 billion to present USD 20 billion.
WeWork is just another cog in the giant dysfunctional wheel of gender-bias. And though we have directed all our floodlights on it, others around and everywhere roll on in their ethically impaired ways.
Male “like-mindedness” and perceived “comfort zones” have foxed us all up as the biggest anti-diversity monster in the corporate universe. This mammoth spreads its tentacles across different regions, levels, and industries. WeWork is no different. The incident opened up a can of worms indicating a much bigger problem than evident. George Fleck, of the New York recruiting firm, says that IPO Boards are mere reflections of the VC firms that fund them. These again, are mostly male and have a dominant say in the composition of the firm. In WeWork’s case too three out of six board members were appointed by SoftBank Vision Fund LP, Hony Capital, and Benchmark Capital.
Studies show new startups on average take a minimum of 4 years to appreciate the value of diverse boards. Pitchbook says out of 100 companies that IPOed till august this year, 40% have all-male boards. Equilar’s 2015 survey revealed 60.5% of companies had at least one female director. In McKinsey’s 2017 study, Black Americans came out to be holding only 4% of senior positions. They represent 10% of college graduates. Hispanics and Latinos who represent 8% of college graduates hold only 4% of senior positions. Women are at 26% of board positions.
The Echo of Dysfunction:
Discrimination isn’t self-containing. It echoes down to lower rungs. And so happened in WeWork’s case.
In 2018, Ruby Anaya, 33, filed a lawsuit against the company alleging that the company did not address the two-sexual harassment reports she made over the course of her employment at WeWork from 2014 to 2018. Another former executive has accused the company of gender and age discrimination.
Brighter Colors on the Palette:
Equilar’s 2015 survey says in 500 brightest players in the public market the percentage of women board members strikingly shot-up to 96.4%. McKinsey & Company’s 2015 Why Diversity Matters and, the Peterson Institute for International Economics 2016 Is Gender Diversity Profitable? Evidence from a Global Survey back this observation. The reports say companies with diverse representation achieve more profits. McKinsey’s 2014 study found diversity at the board level improves their chances of making above-average profits by 43% and its 2015 report, delivering through diversity, states gender diversity in leadership positions increases profitability. The report further adds companies in the top 25th percentile for gender diversity on their executive teams were 21% more likely to experience above-average profits.
Kahnlitwin 2019 says diverse boards are less risk-prone, are more likely to pay higher dividends to stockholders, can better adapt to changes, can accelerate innovation, have a broader perspective on the outcomes, can match the market trends, can better address internal problems, have a positive impact on the organizations’ reputation and brand. These boards are also tuned better to diverse global customer needs.
Planning Your Perfect Picture:
Diversity means more than checking a box. As easy as it sounds, addressing ingrained bias needs constant and deliberate efforts. These can help: