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 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.
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.