I'll Bet $250 Million

The Facts
Until last week, the largest award that I knew of in a gender discrimination lawsuit was a $54 million award against Morgan Stanley. That has been trounced by the $250 million in punitive damages and $3.3 million already awarded in compensatory damages (with more to come*) to be paid by Novartis. The jury found the company guilty of paying women less than men, promoting fewer of them and allowing a hostile workplace.

So, I went online to see a couple of things. First, how is this being spun by various media? Second, and this one I'd bet $250 mil on, the number of women on Novartis' board?

The Spin
The New York Times led with the fine, but in the first sentence highlighted the irony of Novartis' 10 years as one of Working Mother's 100 "Best Places to Work for Women" award (this is why I think the NAFE award is much better). Market Watch led with Novartis' dispute of the finding and Business Insurance called the award "breathtaking".

The headline that galled me the most was from the WSJ: "Hit from US discrimination suit looks manageable." Excuse me! If I were a shareholder, I'd want my dividend pennies from that money - that, oh by the way, could grow significantly. Let's see...5600 times $300,000* would bring the $253.3 million up to nearly $2 billion. Unless, of course, Novartis is successful in its appeal.

But money aside, think of the "hit" the women of Novartis sales in the US have taken in diminished earnings for themselves and their families - not to mention the harassment they dealt with.

The Board Failure?
But let's return to the money. Were I a shareholder, I would be wondering where was the board in protecting my investment? Were I a betting woman, I'd bet that Novartis' board would have fewer than 3 women on it. Why? Because boards with 3 or more women (and the higher the precentage the better) are more likely to pay attention to wage and career path equity for women. So, I looked on BusinessWeek's investing site and found that - as if its last update - there are only 2 women on the Novartis board out of 15 directors.

According to a recent report by the World Economic Forum, 72% of surveyed companies have no way of tracking wage equity! One of the ways to decrease that number is to have more boards with higher percentages of women on them...women who can see the relationship between their fiduciary responsibility to shareholders and a company's track record on wage and career path equity. Because one of the responsibilities of the board is risk management - and even if it's a small fraction of Novartis' revenue, I'm sure the potential $2 billion could be put to much better use than awards to defendants.

*Each of the 5,600 women in the class could receive up to $300,000 each based on the ruling of the court-appointed administrator.

Lead ON!
Susan
Susan Colantuono is CEO of Leading Women and author of No Ceiling, No Walls. She blogs on networking for PINK Magazine. Follow her on Twitter.

Another Smorgasbord

Executing Executive Compensation
In a recent Bloomberg News article about F500 women CEO compensation, a compensation expert was quoted as saying,

“When you see numbers like this, one can truly say that the glass ceiling in Corporate America has been shattered,” said Frank Glassner, CEO of San Francisco-based Veritas Executive Compensation Consultants LLC. “I don't remember seeing women ever getting paid more than men.”

He was commenting on the fact that, according to Bloomberg, the 15 F500 women who were also CEOs in 2008 got a 19 per cent raise in 2009 — while the men took a 5 per cent cut.

This has VERY little to do with the glass ceiling being shattered. As several studies in the past have indicated (and later comments in the Bloomberg article attest) most of those women were earning significantly less than their male counterparts. This isn't a smashing of the glass ceiling, it's what could be called a "market adjustment" in response to wage inequity. To quote Graef Crystal, the analyst who crunched the numbers,

"compensation committees are saying we don't want to have any trouble" over underpaying women, "so if we err, let's err on the side of giving them too much."

A Peek Into IWiNs
We call internal women's initiatives and networks IWiNs. Sylvia Ann Hewlett and DeAnne Aguirre recently provided a peek into the women's advancement activities at AMEX, Deloitte, Citi and Cisco. Read about them here.

Tearing My Hair Out
If I see another study that over-emphasizes interpersonal skills or personal attributes to explain why women are better leaders, I'll go bald! Not long ago, ASPIRE released the most recent claiming that women will be the leaders of the future because they self-describe as matching 8 out of 10 of the most needed leadership attributes. What are these? Integrity, emotional intelligence, responsible, takes action, people-person, aware of behaviors, change agent, true to self, visionary, inspirational. (BTW again as I mention in my book, No Ceiling, No Walls, the women do NOT match on "inspirational", although men do.)

These are not the criteria that get people into the corner office. They are nice, but insufficient. Along with them are the hard skills like business, strategic and financial acumen. As long as studies continue to under-measure these, the more women will wonder why they aren't moving into the C-suite!

Damned if You Do...Doomed if You Don't
This earlier Catalyst finding (that women are seen as competent or liked, but rarely both) seems to be turned on its head the higher women move up the ladder. A new study led by assistant professor Ashleigh Shelby Rosette of Duke University’s Fuqua School of Business found that:

“In business environments, even if women are thought to be sufficiently competent, they are frequently thought to be not very nice,” said Rosette. “But on the tiptop rungs of the corporate ladder, competence and niceness may have a certain level of compatibility for women top leaders.”

Although both top executives and middle managers were described as successful, students only evaluated females more favorably than males when they were in top-level positions. They rated these women as more competent for having faced double standards and triumphing over exceptional hurdles.

Participants in the second study also rated women as more relationship-oriented because they expected top women to engage in a more traditionally ‘feminized’ type of leadership, an employee-focused leadership style that is increasingly viewed as effective.

Both the double standard and feminization of management perceptions help explain why women top leaders were rated as more effective leaders overall than men."

Lead ON!
Susan
Susan Colantuono is CEO of Leading Women and author of No Ceiling, No Walls. She blogs on networking for PINK Magazine. Follow her on Twitter.