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Welcome to Liftstream - Life Sciences Executive Search and Leadership Advisory

Tackling the Deficiencies of Professional Networks

Defining the Problem:

  • – Professional networks are the most prevalent method for appointing to the board of directors, perpetuating the gender imbalance on boards. Nearly half of life sciences companies (46%) report using professional networks to appoint board candidates.
  • – Women-only groups are not offering a total market solution to companies wishing to access women leaders because just 13% of women report these networks as valuable in growing their networks.
  • – C-suite women are not establishing strong networks with executive search firms. Companies are employing the services of search firms for C-suite hiring (42%) but few women (7%) report finding their C-suite positions this way.

These network approaches are not increasing the participation of women at either the C-suite or board. Companies explain they are using networks because they are low-cost and offer a level of candidate ‘validation’. The way Venture Capitalists tend to recycle CEOs, and other executives, from within their network is an example. Professional networks do not reach the best people universally and often introduce recruitment processes that lack structure and rigour, leading to appointments based on historical and personal factors, and which are not always well suited the requirement at hand.

However, boards and executive management teams that do report using executive search firms for hiring suggest that they are often disappointed with the number of women ultimately presented to them as part of the long and shortlists. This view is partly supported by the data suggesting women at the C-level are not finding their roles this way. Both parties are suggesting that there is insufficient network engagement between the search companies and women executives, the reasons for which are so far unclear.

Liftstream Delivering a Solution:

Our intentional approach to cultivating diverse candidates since 2005, gives us the ability to access people that our clients would not otherwise reach. We also host several annual events for industry executives that target women and diverse candidates from across the community which help to develop these networks and increase the probability of lasting relationships between us.

Our search and evaluation process has been designed to eliminate bias and preference, focusing solely on the individual merits of each candidate. And because the evidence shows it is crucial to engaging women, we have introduced more comprehensive feedback approaches to ensure all candidates receive detailed, fair and constructive feedback.

Our fee structure balances cost, value and performance relative to the different success drivers of board and executive hiring. At both the board and executive levels, we have introduced contractual commitments on our part to fulfil gender diversity objectives, thereby tying diversity to financial reward – and going beyond rhetoric to accountable action.

Liftstream is committed to meeting the requirement (Voluntary Code of Conduct – UK Government) to always shortlist a minimum of one woman, and we aspire to achieve 50/50 balance as a standard.

Liftstream Target:

To achieve an annualised 50/50 gender balance across all assignment shortlists by 2021, while addressing all other dimensions of diversity.

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Biopharma Bucking the Trend for Separating Board Chair and CEO

The debate over whether or not to separate the roles of the Board Chair and CEO is one that continues unabated. The Dodd-Frank Act requires companies to reconsider their governance structures, including the decision taken regarding the combination or separation of the Chair and CEO, encouraging companies to adopt the latter. In other regions of the world, such as the UK and continental Europe, it is almost always the case that an independent Chair will lead the board. The UK, for example, under the direction of the Financial Reporting Council, recommends as part of the corporate governance code that the Chair of the board be independent – expecting companies to comply or explain fully why they would opt for combining the roles. In continental Europe, the separation of the ‘supervisory board’ and ‘management board’ as the dominant governance structure, largely negates the Chair/CEO combination issue.

In 2019, in the US, there were a high number of shareholder resolutions against corporate boards which retained the Chair/CEO combination, signifying the growing opposition to this governance structure. This investor action is in line with the long-term trend of these two leadership positions separating. According to ISS, the number of S&P 500 companies with a Chair/CEO combination was 46% in 2019, down from 62% a decade ago.

These averages for multisector indices indicate a longer-term trend, but what of the pharma and biotech sector? We wanted to look at the governance structures of large pharma and biotech companies. Our 2020 analysis encompassed 45 companies, all of which were commercial-stage companies with 2019 revenues and market capitalisation of more than $1bn. It includes large pharma and big biotechs from across several countries.

Examining the 45 companies, we found that 19 companies (42%) have a combined Chair/CEO structure, whereas 26 companies elected to separate these roles. As there is a higher prevalence of companies with a combined CEO/Chair structure in the US, we looked at this group of companies and found that 17 of the 26 (65%) US companies have a combined Chair/CEO structure.  Among the ex-US companies, all of the boards had chosen to go for a split Chair and CEO structure.

Across all 45 companies, we found that 40% of the Chairs are independent, and depending on which governance guidance you follow to classify independence, a strong case can be made to reduce this percentage further. The issue of independence also arises for elected board Chairs who previously had a tenure as CEO. Across the 45 companies in this analysis, we found that 22% of the current Chairs had previously held the CEO office.

Given many CEOs are also the Chair, we were keen to understand the origins of the CEO appointment. Are companies selecting CEOs from the external talent market, or are they internal appointments coming by way of succession planning?

We defined the ‘internal’ appointment as a person who has been with the company for more than two years before their CEO appointment, or where they have held at least two prior positions before being appointed to CEO. Additionally, we wanted to identify the predominant weighting of the function experience of the CEOs. One argument often put forward for a Chair/CEO combination is that the complexity and strategic demands of these large R&D driven businesses are better served by a Chair/CEO with the right understanding of the science and/or clinical development.

Across all the companies we examined, 66% of companies have CEOs who have been appointed internally. Analysing the currently serving CEOs, 53% of CEOs have progressed through commercial functions, 17% scientific and 11% finance. The companies with combined Chair/CEO have mostly appointed CEOs internally (76%). From this analysis, we can see that deep scientific or medical experience is not requisite for leading these large complex R&D companies.

In our 2017 published study of 177 biotech IPOs (here), we found a correlation between the governance structure and the gender diversity of the board. It was clear from that study that companies which had chosen to separate the Chair and CEO were much more diverse than those boards which hadn’t. The data was suggestive of a particular board culture that was excluding women and could be partly attributed to the male control of the Chair/CEO axis in those companies where the roles were combined.

There were only two (2) women CEOs across the entire 45 companies in our analysis, none of which were among US companies, and only two (2) women Chairs, one of which was in the US and one in Europe. In examining the 45 companies in this analysis, we found that across all companies with a combined structure, women represent 27.7% of the directors. All companies separating the Chair and CEO roles have 28.8% women directors on their boards. When splitting these out regionally, US and ex-US, 24.4% of directors are women at US companies with a separate Chair and CEO, whereas ex-US, 34% of directors are women.

Our analysis is not aiming to make a case for or against the benefits of a combined Chair/CEO.  However, understanding the data reveals opportunities to monitor and challenge these structures going forward. Institutional investors will continue to oppose boards with a combined Chair/CEO structure, but perhaps in the pharma and biotech sector, we’ll begin to see a voluntary move by companies to introduce such structures as they catch up with the wider corporate landscape.

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Liftstream Addressing the Chair and CEO Power Axis

Defining the Problem: 

•  The Chair of the board and the CEO are heavy influencers on strategy, policy and culture, and are also male in most life sciences companies, even where women are sitting on the company board. The Chair is male in almost 98% of companies and the CEO is male is over 90% of companies.
•  A lack of independent governance structures is contributing to fewer women on boards. Companies where the Chair and CEO role are split, are more likely to have a gender diverse board (66% have women on the board) than when the roles of Chair and CEO are combined (42% have women on the board).
•  Companies are trending towards a governance structure where the Chair and CEO are separated. Nearly three quarters (74.7%) of companies are choosing to split the roles of Chair and CEO, leading to more independent governance structures.

The concept of ‘setting the tone from the top’ is crucial in promoting gender diversity at the board, and throughout the rest of the company. With the Chair and CEO axis, so male-dominated, this tone and culture-setting are not being done by the key leaders. Separating the Chair and CEO is growing in popularity, particularly among public companies, and a clear relationship exists between this and the diversity of the board. Chairs and CEOs who have shown a commitment to increasing gender diversity agree it is an issue of leadership. If these figureheads are not leading and urging the rest of the company to follow, then the participation of women does not grow at all levels.

*All data is proprietary generated data published by Liftstream [Diversty Reports]

Liftstream Delivering a Solution:

•  We work with VP, SVP and C-suite women to provide explicit guidance to help those with the requisite capabilities to consider pursuing and fulfilling CEO positions.
•  Provide expert advice to companies considering to appoint a Chair or CEO, offering constructive guidance and challenge to the profiling and description development, thereby widening the selection opportunities.
•  We have established a partner relationship with BioDirector, a prevalent board director network, to grow the experience, effectiveness and capabilities of women and minorities already serving on boards, such that they would be increasingly likely to serve as Chair of the board, or as Chair of board committees.
•  As part of succession planning, develop discreet long-term target lists of CEO candidates for Chair / Nominations Committee, including a higher than market-average number of women prospects.
•  Through our own research, track and monitor the women with experience to Chair a board of directors. Work with our external partners to strengthen this population of prospects wherever possible.
•  Offer a very detailed diversity review to board Chairs, and the respective board of directors, to discuss their diversity position and, where requested, initiate a clear plan to increase board diversity toward clearly defined goals, metrics and objectives.
•  Work with boards to devise the most suitable governance structure for the company, giving consideration to the current directors and their respective skills, as well considering how the board must evolve to meet the strategic opportunities and challenges of the company.

Liftstream Target:

All CEO shortlists to have at least 30% women candidates and that CEO placements maintain an annualised average twice the market of sitting women CEOs (i.e. 9%). All Chair shortlists to be balanced 50/50 over an annualised period.

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Racial and ethnic diversity in the life sciences sector requires a tailored approach

 

This article is authored by Karl Simpson of Liftstream, an executive search and leadership advisory business servicing the life sciences industry in Europe and the US. In the article, he examines how life sciences companies in the US should introduce tailored approaches to racial and ethnic diversity. 

A study of the talent pipeline in the life sciences sector, from entry-level to boardroom, provides multiple opportunities to assess where talent resides, as well as where it is coming from and going. In late 2017, we published a study of life science companies across Massachusetts that showed where women were participating in the industry’s workforce. Despite widespread protestations to the contrary, the undeniable availability of women who currently do, or have immediate potential to, serve in the most senior roles (c-suite and board), supports every argument for their greater inclusion at the top of companies. The 24% of C-suite positions presently held by women and the 29% who make up the levels feeding the C-suite, proves there is a large pool of suitable talent.

When examining the status of people from underrepresented racial and ethnic groups in the sector, we see a different situation. If we take the state of Massachusetts, drop a pin in Cambridge and fan out towards the biotech inhabited suburbs, it’s clear that there are inadequate numbers of Black or African American or Hispanic professionals serving in the upper-echelons (C-suite, C-1, C-2) of life science companies. Collecting reliable data in the area of racial and ethnic diversity is notoriously difficult, partly because of companies not wishing to disclose their employee demographical data, and also because identifying race and ethnicity without the individual self-identifying is inherently assumptive and inaccurate. In the absence of such data, we can apply the ‘look test’ for validation of the thesis that people from workplace minorities are just not fulfilling these roles.

If there is to be a sustainable talent supply in the life science sector, then increasing the participation of racial and ethnic workplace minorities is a fundamental goal. It is incumbent upon the industry to be much more accessible in terms of professional opportunities for people right across our societies. Data suggests that the population in the US will see an increase in the proportional populations of Black, Hispanic and Asian people, while the Caucasian population is set to fall to less than half in little over 20 years (Fig. 1, Fig. 2). This demographical shift will place pressure on the talent supply unless companies move toward more diversified hiring and attract human resource from across the entire talent pool. It also indicates that the patient populations, which pharma and biotech companies are seeking to serve, will also be made up of different constituencies of race and ethnicities, and points to one explicit motive for the sector to be more diverse at all levels.

People of all racial and ethnicity profiles are distributed throughout the talent pipeline, but understanding where different racial groups are concentrated is crucial if a business is to introduce interventions that will enable people to thrive and advance. For example, we know that Black or African American people participate in higher number in the early career stages of the pipeline but fall away dramatically in the senior ranks, whereas Asians fare much better in senior leadership. We also know that proportionally, Black or African American people are more likely to be found in larger companies than start-ups. Better understanding this fragmented picture means a bespoke solution optimised for each group can be introduced to improve their participation at all career levels, including the most senior.  Although many similarities exist with gender equality, there are vital differences, and so prescribing solutions to race which have been transposed from tackling gender diversity will have limited effect. Likewise, adopting universal approaches that are intended as a ‘catch-all’ for any diversity, will be shown to be ineffectual.

Fig 1. – Percentage of total US population by race.

Fig. 2 – Historical and Future percentage of the immigrant population of the US by race.

There are, of course, many situations where we’re tackling gender and racial inequality simultaneously by bringing intersectionality to the workplace. Widespread academic research tells us that intersectionality has a profound effect on inclusion. We know women and men, irrespective of race, are experiencing the workplace differently, with women consistently reporting less favourable outcomes than men. Women from racial and ethnic minorities report even more extreme negative experiences and perspectives impacting their careers. Relative to their white colleagues, they are far more likely to express that there is bias in the recruitment process within their company; that their company’s performance review process is biased, that their own job performance is evaluated unfairly by others; and they are much more likely to reject opportunities at companies where diversity is not apparent.

This ‘double jeopardy’, where multiple disadvantaging factors intersect, is often overlooked when applying or implementing diversity initiatives in the workplace. When women of colour and white women have very different workplace interactions and experiences, the ‘solution’ to increase gender participation is often insufficiently tailored to heighten increased participation for women of all races.

Fig. 3 – Percentage point different between Bachelor’s Degree Attainment of women and Men Aged 25-34 by Race and Hispanic Origin – 1976 to 2015.

There are many other factors that can prejudice a person’s success, among them is their social standing or class, socioeconomic status, education, cultural identity or religion. The intersection of multiple factors can severely inhibit professional fulfilment, because, for many minorities, they are seen through the widest filter which ties them to stereotypical biases we implicitly harbour about social groups. And the individual also fears the threat of conforming to stereotype.

Education is a crucial factor when assessing the capacity of different racial and ethnic groups to occupy high-skilled professions. Data from the 2015 US census show an encouraging signal that women of colour aged between 25-34 (now part of the next generation of leaders) are attaining a degree education more than men of the same race.  This perhaps makes a further case for both racial and gender diversity as we think about the talent pool. In the workplace though, men continue to dominate across every racial group, thereby signalling that gender inequality cuts across lines of race and ethnicity.

If we zoom out to the macro view, nationally within the US, there remains a considerable delta between the academic achievement (Bachelors) of Asian (53.9%) and White (32.8%) populations relative to Black (22.5%) and Hispanic (15.5%) people, a disparity also observed at the advanced degree level.  In the figures below (Fig. 4 and Fig. 5), we see that when looking at the attainment of college degrees by White and Black students, as well as White and Latino, there are some significant differences. States recognised as offering significant employment in the life sciences, such as Massachusetts and California, are included in the ten states with the widest gaps for both comparator groups.

Fig. 4 – US States with the widest gap in college degrees (black and white populations)

States with widest gaps in college degrees (black/white)

Black White Gap
West Virginia 24% 48% 24 points
Wisconsin 22% 45% 23 points
North Carolina 28% 50% 22 points
Connecticut 29% 50% 21 points
Massachusetts 32% 53% 21 points
Minnesota 27% 47% 20 points
Colorado 34% 53% 19 points
Ohio 24% 42% 18 points
Nevada 24% 42% 18 points
California 33% 51% 18 points

 

Fig. 5 – US states with the widest gap in college degree (Latino and white)

States with widest gaps in college degrees (Latino/white)

Latino White Gap
California 17% 51% 34 points
Colorado 20% 53% 33 points
Massachusetts 22% 53% 30 points
Nevada 14% 42% 29 points
Connecticut 22% 50% 28 points
New York 21% 48% 27 points
Illinois 19% 45% 26 points
Virginia 18% 44% 26 points
North Carolina 24% 50 % 26 points
Vermont 18% 44% 26 points

Academic accomplishment is an essential factor in the participation of racial and ethnic minorities across the life sciences sector, an industry renowned for its high-barrier to entry based on education. Data generated in our 2017 study (Opening the Path to a Diverse Future<) of the Massachusetts life sciences sector, found that more than 30% of respondents have a Master’s degree and a similar number have a PhD (Fig.6). This very high education threshold is indicative of the requirements set for many jobs in the life sciences sector.


Fig. 6 – Academic Attainment across Study Respondents (Liftstream/MassBio – Opening a Path to a Diverse Future)

Elucidation of the educational gap is just one data set that shows business alone cannot tackle these issues. Unless people from the racial and ethnic minorities are emerging from education with equivalent educational qualification to the white or dominant population, the onus will heavily rest with business to tilt the balance in other ways, such that workplace minorities are prospering. Of course, the corporate sector must bear its portion of responsibility, and perhaps it can be more active in its engagement with public bodies, including educational institutions. There is undoubtedly a role for the public sector to inject money and resource, particularly as they look to increase the potential for social mobility among these underrepresented groups. This responsibility cannot fall squarely on the shoulders of private enterprise; otherwise, long-term progress will remain stunted.

Despite this need for policy-makers and public bodies to step up and actively address inequality, businesses cannot use this as an excuse for doing nothing. Whatever their time and financial horizons, there is a talent imperative to find people with highly diverse backgrounds and this should include the full participation of all racial and ethnic minorities. Their inclusion in our workforces demands that we take far more personalised approaches to hiring and retention. We have to revisit many aspects of the processes and systems we use to employ people, and ask if they are disadvantaging people or optimised for the people we seek. We cannot pretend that this is easy, but with good leadership and tailored equitable approaches, change can happen fast.

Today we’re facing a talent crunch in the life sciences industry and by further opening the door to talent from across society, we will introduce one part of a sustainable solution. It is time for life science companies to act on the issue of race and ethnicity and give equal opportunity to the immense talents that exist among these people.

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11 Lessons from delivering leadership diversity!

This article was authored and posted by Karl Simpson, CEO and Founder of Liftstream, an Executive Search and Leadership Advisory firm operating in Life Sciences. It’s contents reflect his personal views and experiences. 

I am personally predisposed to look to the future, but in search of the best path, I find it useful to reflect on the past from time to time. Transitioning from one decade to another, I was given cause to look back on the previous few years and what I have learnt over that time. Working towards a more equitable workplace by promoting the opportunities and advantages for improved diversity has afforded me some of the richest experiences and some of my greatest lessons.

Much is written about the topic of diversity. In recent times, the torrent of information and assertions regarding a more diverse workplace have overwhelmed even the most avid supporter. All of which has undoubtedly raised awareness, while potentially risking a level of ‘diversity fatigue’ to take seed. Despite all of this tumult, the impotence of the argument seems to be laid bare in the glacial pace of change; highlighted by very slight incremental improvement in the statistical representation of women and workplace minorities at the board and leadership levels of organisations; the level at which the data are more abundant. Both the cadence and scale of change would need to increase if we’re to dramatically alter the composition of the leadership landscape in the coming years. This would require many things to happen, not least a higher engagement level by leaders of all identities who are willing to speak out and take action.

I know that choosing to speak out on this topic is not without hazards. While I believed strongly in the purpose, it is not always easy to see the route to commercial viability in taking up such positions, especially when so many are unreceptive to your ideas or what you’re promoting. Given my profession, this is illustrated by the fact that in the life sciences sector, in which I work, the representation of women at board level was in the single digits when I took on this cause, and it remains there today for people of colour. However, the purpose is an important one and I will try to avoid repeating many of my mistakes of the past. Below I have set out some perspectives which might help you formulate your own efforts to improve the levels of diversity in the workplace.

1. Bring the Data

Just 5 years ago (late 2014), my company published its initial report into gender diversity in the biotech sector (Diversifying the Outlook – The X&Y of Biotech Leadership). I’m not going to cover the findings of that report, or any since, but merely to state that this report changed things. Prior to this, our advocacy for diversity was not cutting through at all. Suddenly, with data in hand, we could penetrate the general discourse with more factual contributions, which had the effect we desired; which is to say people listened more intently and were often spurred to act. Bringing credible research to the discussion won more conviction from others. This was singly the most important step we took. Without good quality data, you’re just another person with an opinion.

2. Understand your WHY?

The question I have been asked more than any other over the past few years is “Why are you doing this?”

I have various motivations, some of which have grown organically as I’ve deepened my involvement. However, my founding motivation, or North Star, is that I believe deeply in the power of diverse teams; something I’m passionate about making happen in the life sciences industry. I have found it valuable to remain very connected to this ‘Why’, because it shapes how I think and it guides me, even in those difficult or defeatist moments. I recognise that not all people I encounter will share this view, however passionately I try to persuade them. Crucially though, I know that if I am to apply myself to this cause, then it has to be for a reason that I unwaveringly believe.

3. Solicit a wide range of opinions

There is value in ‘Preaching to the Choir’ – so to speak. Those people partly or fully persuaded of the cause often become useful and powerful allies in communicating a message at scale. With a core base of support; more evidence, demonstrative actions, and conviction; I found that more and more people were willing to support the mission. That said, you can quickly find yourself in an echo-chamber, where your ideas and world-view go mostly unchallenged. On a sensitive and unfamiliar topic like diversity, this effect can be more profound. Many who possess a different perspective are often reluctant to express it, which inhibits progress because the real debate is not taking place.

4. Don’t go into opposition

Many people over the past few years have asked me why we’ve had some degree of success in getting the argument for diversity and inclusion across. One reason that stands out to me is that I always knew that I didn’t want to oppose people. When I’m promoting gender diversity, I don’t see this as opposing men (after all I have a vested interest here), similarly when I’m tackling race, age or sexual orientation. Diversity is about growing the opportunities for all, becoming stronger together. To create an opponent and directly attack them is negative and confrontational. Neither of which seem like positive attributes of a change program and I understood very early that I’d need the support of a wide cross-section of stakeholders to enact any meaningful change.

5. Spend your political capital wisely

To make an impact, you must have an active community that appreciate and respect what you’re doing; the reasons you’re doing it, and the positive influence that it has on them or their environment. This cultivation of trust and relationships with people, who are broadly supportive of your efforts, begins to pay forward the currency of political capital. However, you have to be very strategic in how you choose to spend that political capital. There are many challenges that I faced, where it proved neither necessary or wise to employ the goodwill of my legion of supporters each time I met one of these challenges. Fundamentally, I understand the long-game and how that political capital is going to be valuable down the road.

6. Collaboration is hard to do

During the past few years, I have had many successful collaborators on the issue of diversity, among them, I point to Biogen, MassBio, MedCity and the NEVCA. These collaborations are vital. They allow you to communicate with new and diverse audiences, to accelerate ideas, establish new research, and add momentum to the mission. The expression “it takes a village” is as relevant here as it is anywhere. That said, even in villages some people are self-serving. I have learnt just how difficult collaborations are in this field. The justifiable cause for which you’re coming together begins to recede from view and suddenly you are met with the reality of a ‘partner’ who is not truly serving the cause, but hoping to elevate their own organisational or personal status. I have found many parties seeking our collaboration only to associate themselves with our excellent work in a complicated area. I have learnt an enormous amount about these types of collaborations and the requirement for a clear set of aligned objectives.

7. Revisit your assumptions

The diversity and inclusion field is an emerging area of social science with many prescribed solutions for solving its myriad challenges. Not all have the desired or sustained impact that is envisioned. An example of this is ‘unconscious bias’ training (UBT), which emerged as a ‘go-to’ option for many organisations. It turns out that UBT can raise awareness, but there is mixed evidence for its effectiveness in reducing implicit bias; no real evidence that it has a positive effect of explicit bias; and insufficient evidence to indicate it is effective for behavioural change. Yet, despite this, companies continue to spend considerable money and resource on UBT in an attempt to alter employee behaviour. This one example highlights a wider problem, which is that many individuals are inclined to regurgitate ideas that they themselves have insufficiently researched, and that companies are merely following the herd, and not continually measuring and assessing the validity or performance of their D&I efforts.

8. Take a positive, rational and business-led approach

At a high level, people’s motivation for wanting greater diversity tend to derive from three main categories; because it’s required by law, it’s right and just; or it is good business. I have almost always pushed back any personal moralistic stance in favour of focusing entirely on driving a sound rational business-led argument, which I’ve tried to frame positively (often difficult given the quite negative source material). Analogous with convincing a child to eat spinach because you tell them its good for them, intelligent and independent thinking business people need to more factual and compelling arguments. I have not chosen to single out individuals or companies, to apportion blame, nor ridicule or embarrass people, but instead to commend affirmative action. It has always been about allowing a way into the conversation for anyone who wishes to take part.

9. Never exclude the possibility that you’re wrong

The diversity and inclusion issue is multidimensional and complex. For this reason, it is incredibly important to me that I always consider the possibility that I’m wrong. I am constantly vigilant to the likely reality that my perspective, from where I sit, is entirely out of kilter. For example, it is improbable, if not impossible, that my understanding of issues of race can be layered with the context and nuance that someone of an under-represented racial group can offer – and you want to learn from those perspectives and ideas. There are so many areas of this topic where you can be wrong, and it is detrimental to consider otherwise.

10. Failure is likely but equality is not

I am under no illusion that an issue like equality, which is as old as humanity itself, is unlikely resolved in 10, 20 or 30 years. I accept that my efforts, meagre in totality, will not achieve equality, not in life sciences or elsewhere. Despite this admission of inevitable personal failure, I am excited and buoyed by the progress we make, and my passion and commitment to the cause are undimmed. I am prepared to make the sacrifices to push for a more equal workplace that is safer, more productive and fulfilling for all, knowing full well that I will probably never reach my destination.

11. Shared aspiration

I have travelled far and wide speaking to people on this topic. I have talked to people from racial minorities who I expected to be passionate and willing to engage, but weren’t. I’ve talked to old white men, a demographic often accused of being dismissive of diversity, who have been effervescent with enthusiasm to change things. The truth is, around us, many people share an aspiration for a more diverse, inclusive, equal and belonging workplace. Many of whom do not have the practical understanding, ideas, courage or tools to act. If you can find those people with a similar vision of the future and provide them with the vehicle to make an impact, then in my experience, they’ll drive that far beyond where you expect it might take them.

I am proud of our diversity efforts in the last 5 years (2014-2019) and I believe good progress has been made. I also enter this decade with great optimism about the future, while acknowledging there is still very much to do. The years ahead provide an excellent opportunity for transforming the culture of the life sciences sector toward an even more diverse place where more people feel they belong.

 

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Looking for your first board director role? – 5 steps to get you started.

Choosing to begin a new phase in your career as an independent board director requires some forethought and planning. Reaching a senior level in your executive career and feeling like you’re looking to add something new and different to your experience, does not necessarily mean that board service is for you. Board work is still working, and usually is hard work, and it does not always carry significant rewards. If having dispelled some common misconceptions about board work you are still keen, then read on.

Because companies come in all shapes and sizes, the board of directors governing them also vary greatly. Therefore, it is difficult to describe the work and responsibilities involved accurately for all boards. It is for this reason I have never really found myself employing the phrase ‘board-ready’ when talking about aspiring directors. This term implies there is a universal threshold applied to any person wishing to take this career step. I can tell you categorically; there is not. Boards require all sorts of skills, experience and perspective to function effectively in their fiduciary and oversight duties. What is true, is there are very clear competencies that most board directors must exhibit, and these are common to almost all governing bodies. It is for this reason that we’re constantly evaluating how to measure the right competencies and how these must change and evolve.

1: Understand the pathway to board service

There are many ways in which to find that first board role. Today there remains two dominant ways in which people find board work. The first is your network. To work out if your network is going to help you, you’ll need to conduct a network audit. An audit will help to establish the number of useful connections and how strong your relationship is with those people. You then need to be very intentional in connecting and communicating to that network your desire to serve on boards.

The second channel is executive search firms who are actively engaged in board work. Not all search firms do board work, or have board practices – the economics of this work is different. However, a good executive search firm can help you in not only providing access to opportunities, but also acting as an advisor to you as you craft your search strategy, develop your pitch, and support you with solid advice about how to choose the right board when you reach this seemingly enviable position.

2: Find the right board to join

You must think through how you expect to deliver value to a board and its corresponding company. The experience, skills, contacts and perspective you bring should have relevance to the board you’re aiming to serve. There are many ways that you might do this. One such way is to foresee the strategic opportunities and challenges that lie ahead for a company and know why your experience could be of intrinsic value to the company and board. Thinking this through comprehensively would be a tremendously beneficial way to heighten your compatibility with the board/s you’re targeting. There is, of course, the need to think too about any conflicts of interest or other restrictions which might prevent you from joining a board, especially where you continue to serve as an operating executive.

3: Think like a Director, not an Executive

Making the step to becoming a board director may not, on the face of it, seem like a dramatic change in the way you’ll operate. After all, you’ve probably been interacting with boards a fair bit of your career by now. Many first-time directors though, do tend to jump in and show a willingness for helping companies in a way most consistent with their experience in an operating role. Sure, boards need technical specialists, people who can go deep on topics that are central to their business. They also need directors to be able to take a broad and elevated view of the vast cross-section of issues they’re perhaps facing. Effective board members know when to delve in deep and when not to. As a director, knowing where the board plays a role and where else it must fall to management is a really important judgement.

4: It is more than the technical know-how

There are a growing number of board courses and qualifications for aspiring board directors to take. These qualifications can lay the foundations of your technical understanding of board work; such as financial literacy, strategic planning and corporate governance. However, there is a lot more to being an effective board member than know the technical aspects. A board of directors, usually with its 7-10 constituent members, are environments where the nuances of communication, influence and power play out in a significant way. Much of this know-how has to acquired over time, as with experience in any role you have fulfilled hitherto, but new board members must prepare for such an environment. One strategy for this is to ensure the board you’re joining has an experienced director on it who might be prepared to guide and mentor you.

5: Define the commitment you’re able to give

If you have well defined the type of company you wish to join, you may already have an understanding of the likely commitment required from a board director. A common mistake among many new board members is they do not appreciate the time commitment to serve on a board. Most people are aware they’ll have to attend board meetings frequently, although even these can vary greatly regarding number and cadence. Serving on a board places greater demands on your time than the board meetings though. You have preparation and board materials to read, sometimes in vast quantities delivered very close to the meeting. If you serve on a board committee, these can often meet separately on different dates to the whole board and carry added duties. You can also envisage that you’ll spend time meeting with the CEO and other executives, as well as other stakeholders, as you get to know the business, and so you can serve to your fullest potential. It is therefore important to be ready for this commitment, especially where it might be alongside a day-job.

If you have decided to join your first board, then congratulations for at least getting to this. Hopefully, the pointers above will make that an easier objective to reach.

  • Liftstream is an executive search and leadership advisory company serving companies across the global life sciences industry.
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Californian lawmakers shake-up the governance landscape in life sciences

 

Putting women on company boards is seemingly just too difficult. For the past few years, voluminous evidence showing the considerable advantages of a gender-balanced board of directors has trickled through to most leaders. Data from multiple studies and publications show the gap between the representation of men and women in boardrooms, strengthening the case for change. But despite the data, there has been nothing greater than incremental improvement when looking at women’s participation in boardrooms.

Such is the intractability of this problem, that we have seen governments around the world make various interventions to coerce business into acting. In countries such as Norway, Germany and France, quotas have been introduced to make companies add women to their boards. In the UK, the government chose not to introduce a quota, but instead set an ‘aspirational target’ with a thinly veiled threat to introduce a legal requirement should companies not act. The response was that the largest companies (FTSE100) boosted the numbers to 25% and are going beyond towards a revised target, while the FTSE 250 play catch up, although the cadence of progress has stalled throughout.

Now California, a US state with an economy larger than the UK and seven times greater than Norway, decided that it would act by introducing Senate Bill 826, requiring public companies to have at least one woman on their board by the close of 2019. Companies are then required by the close of 2021 to add further women based on the size of their board (i.e. the number of members). Boards of four directors must have one woman, boards of five directors are required to have two women, and boards of six or more members are required to have at least three. This bill means that public companies up and down the state of California are forced to diversify their boards through the addition of women, either within a year or within the next three. Of course, since the bill passed, many have spoken of the unconstitutional nature of this law and expect it to receive a legal challenge. This notwithstanding, the law imposes considerable challenges upon public corporations.

California is universally renowned for its technology industry and these companies will be under pressure to act. Also, the San Francisco Bay Area and San Diego in the south of the State are two of the biggest life science clusters anywhere in the world, and so this new law unquestionably impacts the biotech, pharma, medtech and life sciences service companies across the sector. The lingering question is – how much will they be affected?

Liftstream has authored multiple reports examining the data of gender representation in the life sciences sector and so we’ve delved into our data to see what the impact of Bill 826 might have on the life sciences sector.

We, therefore, selected publicly listed companies from across the sector who on their regulatory filings list California as their headquarters. This encompassed biotechnology therapeutics companies, biotech services, pharma and health technology.  Given that the law ultimately considers the board size, we focused on this issue first. Of course, adding a woman to a current board, without anyone stepping off, would increase the board size and could push the board to the next level of requirement. Conversely, to reduce the number of women needing to be appointed, companies may shrink the size of the company board – a pattern which has been witnessed in other places where mandatory thresholds have been set. For the purposes of our calculations, we assumed that boards would remain the same size through the 2019 and 2021 periods.

Fig 1. The average size of the board of public life sciences companies in California expressed in the number of directors.

If companies are to add women directors in the numbers required by the new law, it is imperative to question where this talent will be sourced from. Boards overwhelmingly prefer to select board members with board experience, and so knowing the participation of women on life science boards gives us a baseline population of sitting directors who may form the predominant target group for other board roles. It is true that a proportion of the current sitting directors will be from out of State, however, the fact they are serving on the boards of Californian companies implies a willingness by them to continue to do so.

Fig. 2. – Participation of women on boards expressed as a percentage of all serving directors across each category of public life sciences companies in California.

Women make up between 10.8-14.2% of boards across the different company types we looked at (Biotech Therapeutics, Biotech R&D, Other Biotech, Pharma, Medical Technology, Health Tech). Fig. 2. clearly shows that public biotechnology therapeutics companies in California have the lowest participation, which might also be attributable to it being the largest group of companies (n=140).

As we look to the most immediate challenge of having at least one woman on the board by the end of calendar 2019, it requires to understand just how many companies are currently without women serving as directors. Fig. 3. shows that in the case of biotechnology therapeutics companies and biotech R&D services companies, more than 50% of companies have no women on their board. This is consistent with previous data Liftstream has published as far back as 2014, which highlights the glacial progress that is being made.

Fig. 3. Percentage of companies within each category with all-male boards.

Across all public life sciences companies in California, this means that 126 women directors will need to be added to the boards of these companies by the end of calendar 2019. This total figure is broken down across the sub-category of companies, as shown in Fig. 4. Here again, we see that biotech therapeutics companies have the greatest task ahead of them with 73 women needing to be appointed, should the net size of the board of these companies remain constant and all current women directors remain in-situ. Perhaps one of the more important aspects of this requirement being met is that boards clearly do not operate in a vacuum. Directors resign, are asked to step down, retire, die, choose to reduce their board roster in favour of other roles, and depart for many other reasons – essentially it is a revolving door for men and women. In our study (A Public Reality for Women in Biotech Boardrooms) of 177 biotech companies that went public between 2012 and 2015, we showed a net increase of 15 women were added to these 177 boards over this time and up to 2016. The data published here just for California shows that five times as many women need to be added by the end of 2019. This underlines the magnitude of the task facing companies as they compete for women to serve on their board.

Fig. 4. The number of companies required to add one woman to their board by end of 2019.

Therefore, we can expect a near-term talent battle to insue as companies meet the 2019 requirement. To deliver upon the 2021 commitments, a veritable war will rage. To understand the implications of the law by 2021, we looked at the current companies, the composition of their boards, and the board sizes. From this, we were able to assess the deficit that each company faces were it to fix its board to the current size and not lose any of the current women serving. As it stands today, based on the current number of public companies, the total number of additional women required to serve on the boards of life sciences companies throughout the state of California would be 456 by 2021. The majority of these would be required by biotechnology therapeutics companies which require some 278 women to serve.  All of which needs to be achieved against a backdrop of life sciences companies from other states seeking to add directors; other sectors from within California and other regions hoovering up director talent to serve on their boards too; and many women reaching maximum capacity in terms of board roles.

Fig. 5. Number of women which need to be added to boards by end of 2021

To add further context to this, in every category of company except pharma, over 90% of companies would need to add women to their boards by 2021. This is not only an astonishing number, but it highlights the problem that this law was introduced to tackle.

Fig. 6. Percentage of companies needing to add women to their boards by end of 2021

While companies have made some effort to diversify their boards, the data show that far too few companies have anything approaching gender-balanced boards, and many have no gender diversity at all. It is little surprise then that regulatory intervention has been the result. Now it is over to companies to act.

 

Liftstream is a human capital services company delivering executive and board level searches to the life sciences sector, as well as advisory services to boards on governance and leadership. Our diversity and inclusion consulting service provides the required expertise to help companies transform their organisational culture. You can contact us to discuss your board and leadership requirements at info@liftstream.com. If you would like to discuss a free executive session on diversity and inclusion, please contact karl.simpson@liftstream.com. 

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Plaudits, Progress and Partnerships – One important lesson in the push for equality!

 

By Karl Simpson, CEO, Liftstream

Winning is wonderful, it truly is, particularly the recognition which accompanies it. And we are very grateful to have scooped the latest ‘Commitment to Diversity’ award at the Xconomy Awards earlier this month. I commend Xconomy for making this an award category worthy of recognition and I credit all those amazing people, some of which were also finalists, for making tremendous contributions to the field of diversity and inclusion across life sciences.

This year, we were nominated for our work in partnership with the Massachusetts Biotechnology Council (MassBio) and the immediate past Chair of the Board, Abbie Celniker. Beyond the award itself, which is given following an arbitrary judgement by a panel, it delivers to me a clear message that the power needed to push for change and a more inclusive industry lies in partnership and greater levels of collaboration.

It is a privilege to encounter so many people who are deeply devoted to improving the lives of people employed across the life sciences sector, by making the workplace a fairer, more equal and inclusive place. Whatever the motivation for their earnest and noble efforts, they should be commended. As CEO of Liftstream, I am unrelenting in my pursuit of progress on this matter, and I apply my discretionary effort across many areas of the world. That said, I partially knew at the beginning of this mission, and I certainly know it now, that collaboration with other passionate and like-minded people and organisations, would allow me to have a far greater impact and achieve outcomes otherwise unattainable.

Our work with MassBio on diversity has spanned many years and so to have been jointly awarded is a validation of this sustained partnership. MassBio has been a strong partner with great conviction and we’re pleased to have been at their side in this effort. Successively, the organisation has shown a commitment and courage to take the issue on. In the push for greater equality you encounter some strong supporters, but overwhelmingly you are met with dismissive glances, subtle grunts of discomfort and good old fashion resistance. Therefore, MassBio deserves lashings of praise for the stance they’ve taken, especially given their prominence in all things biotech.

Liftstream has been lucky to have many great partners, yet, as I engage with leaders from some organisations representing important stakeholders in the drive for equality in life sciences, I see evidence of some parties wishing to push their own narrow agenda and somehow ‘own’ their chosen issue. However, this is a complex problem, and the report published by MassBio and Liftstream shows just how complicated it can be. There are many interrelated and interdependent elements which contribute to the wide-spread inequality that today severely impacts the careers of women, and even more so the careers of racial minorities.

The drug industry has spent the past 20 years breaking down walls and seeking the best science and the most talented people with the best ideas, wherever these exist. The siloed, narrow focus of companies was abandoned in favour of collaboration and more openness because it was thought it would spur innovation. So far that experiment seems to have been largely right.

And so it must be with another big industry challenge; the deep inequality that currently inhibits the sector from being as competitive, innovative and sustainable as it can be. To solve this problem we need individuals and groups to come together and find common purpose. To set aside the personal motive or any individual recognition that they might achieve, and to focus on a cause greater than ourselves or the organisations which employ us. For in collaboration exists untold promise for solving these deep-rooted and complex problems, and the potential for changing the sector for the current and future generations in a way which will be meaningful and lasting. At Liftstream, our goal was, and remains, progress on equality. It just so happens that our willingness to work with others has brought us plaudits.

 

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Liftstream nominated for Xconomy ‘Commitment to Diversity’ award

For the second year running Liftstream has been nominated as a finalist for the ‘Commitment to Diversity’ award. This year we have the pleasure of being nominated alongside our wonderful partner MassBio and their Chairwoman – Abbie Celniker. the nomination would seem to recognise the research and advocacy work that Liftstream and MassBio have been doing on the issue of gender diversity in the life sciences industry of Massachusetts.

In late 2017 we published the study ‘Opening the Path to a Diverse Future’, a 140-page report that publishes important findings that provide the life sciences industry with a better understanding as to why women are not fully represented at every level of the industry. This has been followed up with actions and advocacy which has received widespread attention.

We are of course proud and honoured to have been nominated. We hope this year we win!!

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Tackling the lack of gender diversity in life sciences by turning the ‘Red Flags’ to ‘Green’

In the past 13 years, I have heard almost every conceivable excuse why a company has neither truly committed to appointing women nor been successful when trying. Many of these are well rehearsed and follow a very similar pattern. Some of them were perfectly illustrated in a recent review by the UK government into the progress of UK companies adding women to corporate boards. This review featured extraordinary comments by Chairmen and Directors of FTSE 350 companies such as “women don’t want the hassle or pressure of sitting on a board” and “there aren’t enough women with the right experience to sit on a board – the issues are extremely complex”, revealing attitudes which stand in the way of better progress. These views echo many of the comments and attitudes I hear across the life sciences sector. I call them ‘Red Flags’, as they deter women from showing genuine interest in joining a company, usually because the underlying sentiment is disingenuous or alarming.
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