Gender Diversity In Pharma: Caught Between Desire And Reality
Charting The Executive Gender Mix Across 384 Companies
Executive Summary
Charting the executive gender mix across 384 companies from mid-2014 to mid-2019 demonstrates that C-suite gender balance in pharma is moving towards a point that more closely reflects its total workforce, but that progress has been slow and that there is a long road to travel before the transformation is complete.
Pharma as an industry suffers from cerebral dysmorphia: the structure of its head does not always match its body. The industry is struggling to align its executive management layer with the diversity in its workforce. There are short-term, symptomatic fixes for the condition but curative therapy is a protracted process that, at current rates, will take until 2050 to complete.
Beth Crowley is now senior vice president and chief product development officer at Celldex Therapeutics Inc., a clinical-stage antibody and immuno-oncology company in Hampton, New Jersey. But she started her pharmaceutical career in 1992 at a much bigger firm, Bayer AG.
Crowley stayed with Bayer until 2005 and found it to be a very family-friendly company. It fostered a culture where parents could strike a balance between their work life and home and family life. “There was corporate day care, which we regarded as a luxury,” said Crowley. “I was never told that I couldn’t do it all.”
Yet, in the wider pharmaceutical environment, there was an anomaly, she recalled: “Women with children could be found in middle management; corporate executives had chosen not to have children.”
That was how things were. But in 2019, most companies in the pharmaceutical industry recognize that commercial success depends on full mobilization of all their resources, and that talent does not reside solely within the confines of one gender, color, ethnic background or reproductive status. Pharma and its research tributary and competitive collaborator, biotechnology, are proven equal-opportunity hirers, at least as far as gender is concerned: across the industries and around the globe, around 50% of pharma employees are women.
But the upper echelons of pharma still echo with an older order. Charting the executive gender mix in each of 384 companies from mid-2014 to mid-2019 (see box for method) demonstrates that C-suite gender balance in pharma is moving towards a point that more closely represents its workforce, but that progress has been slow and that there is long road to travel before the transformation is complete (see Exhibit 1).
|
|
Total executives |
Female executives |
Gender balance (Female/Both genders) |
Count* |
|
2014 |
2778 |
546 |
19.7% |
384 |
|
2019 |
2745 |
660 |
24.0% |
384 |
In the pharmaceutical industry, reassortment of executive team members is a constant process, the nuances of which are not captured by snapshot data collection methods used here. However, the net result of this churn is that the number of female executives within a broad sample of 384 firms rose between 2014 and 2019 from 546 to 660, a 20.9% increase. Over the same period, the number of male executives fell from 2,232 to 2,085, a drop of 6.6%.
While the percentage increase in the number of female executives is impressive, the industry’s starting point was low. The bottom line is that in five years, in these 384 companies at least, increase in the percentage of women in the executive team - from 19.7% in 2014 to 24% in 2019 – is measurable but not striking. “We need to do better,” said Beth Crowley, “and focus on the pipeline [of female managers below the executive team].”
The five-year change is equivalent to the removal of a third of a man and adding a quarter of a woman per company. At the current rate of improvement in the industry’s executive gender ratio – 0.86 percentage points per year – it would take another 30 years or so before for gender equality in pharma is achieved. By that time, most people currently in the industry will have retired.
The roles in which female executives are deployed has its own pattern, as Beth Crowley noted: “It’s still clear that the majority of women in pharma-biotech are still in the more traditional roles: drug development, regulatory [affairs]; human resources: There are some women CSOs, but it’s rare.”
Crowley’s observations are largely borne out by the survey data (see Exhibit 2). Human resources roles constitute both the single biggest category for female pharma executives in 2019 and the fastest growing category. Drug development and regulatory affairs make the top five, although legal and finance functions take the second and third spots. As Crowley anticipated, female CSOs are rare – 33 in the sample – only just ahead of CEOs (28).
|
Role |
Count 2019 |
Count 2014 |
2019 |
2014 |
|
Human Resources |
94 |
58 |
14.2% |
10.6% |
|
Legal |
77 |
52 |
11.7% |
9.5% |
|
Finance |
63 |
59 |
9.5% |
10.8% |
|
QA/Regulatory Affairs |
53 |
46 |
8.0% |
8.4% |
|
Drug development |
51 |
56 |
7.7% |
10.3% |
|
Business Development/Strategy |
46 |
30 |
7.0% |
5.5% |
|
Operations/General |
42 |
30 |
6.4% |
5.5% |
|
Medical |
41 |
32 |
6.2% |
5.9% |
|
Comms/Investor Relations |
35 |
27 |
5.3% |
4.9% |
|
CSO |
33 |
23 |
5.0% |
4.2% |
|
Head of Unit |
30 |
20 |
4.5% |
3.7% |
|
CEO |
28 |
27 |
4.2% |
4.9% |
|
Commercial |
27 |
28 |
4.1% |
5.1% |
|
Other Research/Technical |
21 |
19 |
3.2% |
3.5% |
|
Clinical |
16 |
17 |
2.4% |
3.1% |
|
Chair |
1 |
4 |
0.2% |
0.7% |
|
Other/Unknown* |
2 |
18 |
0.3% |
3.3% |
|
Total |
660 |
546 |
The top three – HR, legal and finance – account for 35.5% of the female executive roles in pharma. The link between them might be that, along with communications/investor relations and possibly business development, industries other than pharmaceuticals and biotechnology act as “feeder layers” for the executive talent pool. While sector-specific experience would undoubtedly remain an advantage, it might be less common and less vital in, say, legal or HR roles than in scientific or clinical jobs.
Commitment To Change
“Overall, the growth rate in gender diversity is insufficiently high,” said Karl Simpson, CEO of Liftstream, an executive search firm that specializes in the life sciences. “I’m not surprised that things haven’t gone far.” He pointed to two practical obstacles to progress. “Companies can’t just start kicking people out in order to put women in place and, [for the change in gender balance] to be sustainable, you need a healthy pipeline of people that can fill the posts, which requires progress at all levels and a change in how you look for and evaluate leaders.”
Sustainability, as Simpson sees it, is a question of building the drive for equality and full use of resources “into the memory muscle of the organization.” There is some evidence from the survey that that inflection point has not been reached in many companies in the pharmaceutical sector: that gains in the past are reversible rather than built upon.
|
|
Gender balance (women/total) in 2014 (# companies) |
|
|
Gender balance direction in 2019 |
Below average 2014 (192) |
Above average 2014 (192) |
|
Decrease |
8.3% |
54.2% |
|
Same |
32.3% |
10.4% |
|
Increase |
59.4% |
35.4% |
Exhibit 3 shows the percentage of firms increasing or decreasing gender balance from 2014 levels. The 384 companies in the sample were divided into two groups – those above or below the mean gender ratio in 2014. If companies were embedding sustainable change, the direction of change would continue, outperforming firms would continue to outperform.
However, only in around a third of the firms with an above-average proportion of female executives in 2014 did gender balance increase further by 2019: in over half (54%), the gender ratio fell below its 2014 level.
In contrast, nearly 60% of firms with below-average female representation had raised their game by 2019.
That below-average group, of course, includes 126 companies with no female executives at all in 2014, firms, therefore, with only one way to go; slightly over half of them twisted, the rest stuck.
The other below-average group – companies with at least one female executive in 2014 – appears to have done better: in 71% of those firms gender ratio increased (albeit from a below-average level) by 2019.
Disappointingly perhaps, over half (57%) of the underperforming companies that improved their representation of women between 2014 and 2019 did so by reducing the number of men rather than adding female executives. Indeed, 54% of above-average firms that improved their executive gender ratio also did it by cutting out men.
It appears from this analysis that there is little momentum, if any, towards executive team gender equality. Rather there is, in most companies, oscillation around a lower, preset figure that represents a currently accepted level of female presence.
Diversity Appears
Methodology
Scope: 384 public companies in pharma and biotech, the majority (379) from North American and Europe (including Israel).
For each company included in the survey, counts by gender were made manually of the executive team members, member of the boards of directors and members of scientific or clinical advisory boards. The information was extracted in the main from the parts of corporate websites dealing with ‘leadership’, often found within ‘About Us’ or ‘Corporate Governance’ sections. Infrequently (in less than 10% of cases) data were also obtained from corporate filings, such as 10-K and annual reports.
Gender assignments were binary (male/female) and made based on the presence of photographs, highly gender-specific forenames or gender-specific pronouns or possessive pronouns in associated biographies. For female executives, job titles were noted.
The data are snapshots (with a slow shutter speed): data were collected in September and October 2014 and again in August and September 2019. Caveat: companies, their websites and their executive teams are not static entities.
A 2017 report on gender diversity that Liftstream undertook with MassBio, the biotechnology umbrella organization for the state of Massachussetts, noted among other findings that 45% of female candidates are deterred from seeking interviews at companies that they perceive as not having appropriate levels of gender diversity (all-male board, all-male management team, all-male interviewing panel).
In a competitive job market, prospective candidates at all levels will glean information about company culture from their websites, said Simpson. Some companies have “got savvy” to this fact and may include profiles of more peripheral leadership team members to appeal to diversity candidates. “Its not a scam,” insisted Simpson, “they simply want to get the best applicants and know that diversity plays well in hiring.”
In regions where the competition for biotech and pharma talent is most intense, representing diversity can be even more important. In 257 pharma companies in the US, the percentage of female executives was 23.9% in 2019, up from 20.1% in 2014. Both figures are slightly higher than comparative numbers outside the US. But in companies from the hubs of California and Massachussetts, which represent just under half of the US sample, that number went from 23.1% in 2014 to 26.4% in 2019. In the rest of the US, progress was more modest, from just 17.1% in 2014 to 21.4% in 2019.
Simpson argued that it may not matter much whether the exhibition of greater management diversity in companies based in life science hubs is real or for show. “To some extent,” he said, “companies have been forced into looking toward more diverse candidates because the competition for talent is so fierce. But having more diversity means you can attract more going forward.”
Drivers Of Diversity
The pharma industry is nothing if not a dynamic employer. Several factors contribute to the churn of executives in the industry: one is the accumulation of individual decisions about self-furtherment and another is the serial nature of merger, acquisition and growth in response to clinical progress, setbacks and external funding.
At the end of 2014, Alameda, CA-based cancer drug developer Exelixis employed around 100 people. Now it has over 500 and is still growing rapidly. “Growth provides an opportunity for hiring and retaining the most talented employees,” said Gisela Schwab, Exelixis’s president of product development and medical affairs and chief medical officer. Along with the company’s growth spurt, the proportion of female employees now exceeds 50%. A third of Exelixis’s senior management team are women (3/9), lagging the workforce a little but not much.
Growth and the demand for highly skilled personnel bring the possibility of accelerating renewal and gender-balancing within the employee base up to very senior levels. However, the executive teams may not always reflect that change. Doubling the research and development base, for instance, is not necessarily a reason to appoint an additional chief scientific officer. Unless corporate progression opens up new responsibilities (as when late-stage clinical approvals turn the spotlight to sales and marketing) there may be no reason to expand the C-suite.
The survey data bear this out. Exhibit 4 divides companies into four groups based on the change of employee numbers between 2014 and 2019. Whether companies cut their workforce, or expanded it substantially or something in between, the proportion of women on executive teams increased by the same amount, 2.6-3.9 percentage points.
|
|
Change in employee number 2014-2019 |
Gender ratio (Female/Both) |
Change in mean gender ratio 2014-2019 (in percentage points) |
|
|
Class (# firms)* |
|
2014 |
2019 |
|
|
Reduced (85) |
Cut by 10% or more |
18.4% |
22.0% |
+3.6 |
|
Even (76) |
-10% to +20% |
19.0% |
22.6% |
+3.6 |
|
Expanded (99) |
+20% to +100% |
21.0% |
23.6% |
+2.6 |
|
Doubled (100) |
Over + 100% |
20.7% |
24.6% |
+3.9 |
Experiences at Incyte Corporation, based in Wilmington, DE, help explains why. FDA approvals for the company’s drug Jakafi (ruxolitinib) in 2011, 2014 and 2019 (for different indications) and the acquisition of European rights to Iclusig (ponatinib) in 2016 were clear catalysts for the expansion of the company. It grew from just under 600 people in 2014 to nearly 1,500 in 2019. “We have been constantly filling posts,” said Paula Swain, Incyte’s executive vice-president human resources. “We have hired a lot of senior people and at least half of the open positions on our executive team were filled by women.”
But Incyte’s executive team remained much as it had been in 2014 with Swain as the only woman member, until Maria Pasquale joined in April 2018 as general counsel. In February 2019, Christiana Stamoulis came in as CFO. With those appointments, the gender ratio at Incyte’s executive team shot from 12.5% to 33.3%, but the opportunities for change arose only when members of the management group departed for new challenges, said Swain: “Changing things at the very highest level of management is not easy, and the opportunities to do so are less frequent.” Growth and success preserve the status quo as often as they promote it.
While the growth of companies is a double-edged sword when it comes to increasing the proportion of female executives, growth within management teams themselves is strongly associated with improved executive diversity. For the group of companies where executive teams were smaller in 2019 than in 2014 (200 in the sample), the mean gender ratio moved less than one percentage point (from 20.2% to 21.0% over five years). In expanding teams (from 153 companies), gender diversity went from 16.2% to 24.3% over the 2014-2019 period (see Exhibit 5).
|
Change in executive team size 2014-2019 |
Gender ratio (Female/Both) |
Change in mean gender ratio 2014-2019 |
|
|
|
2014 |
2019 |
|
|
Decreased |
20.9% |
21.7% |
+0.8% |
|
Stayed the same |
21.2% |
25.1% |
+3.9% |
|
Increased |
16.2% |
24.3% |
+8.1% |
Thus, the diversity in the pharma’s upper management is likely, ultimately, to reflect the changes in the broader workforce, but changing the C-suite requires its own catalysts, and company growth may not be one of them.