Exactly a year ago, we decided to publish the gender data on founders at Rock Health. Despite women being the majority of our team and our board, only 30% of our portfolio companies had a female founder (today, we are at almost 34%). Because we’d like to help our portfolio companies access a diverse talent pool, we began the XX in Health initiative nearly four years ago.
The aim of this initiative is to bring women together to network and support one another. The 2,400 members of the group share resources and ideas on LinkedIn and meet regularly across the country. This week we’re hosting a webinar on the topic for both men and women, and next week we’ll host our sixth XX in Health Retreat in NYC.
Today, through this initiative, we are proud to share our third annual report on the state of women in healthcare. Our past reports on this topic have been some of our most popular content, and we encourage you to share this report with your colleagues.
Women are still underrepresented in leadership positions in healthcare.
Despite making up more than half the healthcare workforce, women represent only 21% of executives and 21% of board members at Fortune 500 healthcare companies. Of the 125 women who carry an executive title, only five serve in operating roles as COO or President. And there’s only one woman CEO of a Fortune 500 healthcare company.
Hospital diversity fares slightly better. At Thomson Reuters 100 Top Hospitals, women make up 27% of hospital boards, and 34% of leadership teams. There are 97 women that carry a C-level title at these hospitals and 10 women serve as hospital CEO.
We know from our funding data that women make up only 6% of digital health CEOs funded in the last four years. When we looked at the gender breakdown of the 148 VC firms investing in digital health, we understood why. Women make up only 10% of partners, those responsible for making final investment decisions. In fact, 75 of those firms have ZERO women partners (including Highland Capital, Third Rock, Sequoia, Shasta Ventures). Venture firms with women investment partners are 3X more likely to invest in companies with women CEOs. It’s no wonder women CEOs aren’t getting funded.
The problem is real, and the problem matters.
We surveyed over 400 women in the industry to better understand the sentiment around gender discrimination. 96% of the women we surveyed believe gender discrimination still exists. And almost half of them cited gender as one of the biggest hurdles they’ve faced professionally.
Often these are micro-inequities that compound over one’s career. MIT Professor Mary Rowe describes these instances as “apparently small events which are often ephemeral and hard-to-prove, events which are covert, often unintentional, frequently unrecognized by the perpetrator.” But they create work environments which hold women back.
When senior women are scarce in an organization, a vicious cycle of “second-generation” gender bias kicks in. Researchers describe this bias as barriers that “arise from cultural assumptions and organizational structures, practices, and patterns of interaction that [put] women at a disadvantage.” Fewer women leaders means fewer role models for would-be women leaders. On the flip side, when women who are early in their career see more women in senior leadership positions, it sends the message that they too belong in the C-suite.
The good news is that achieving diverse leadership teams is not just a moral imperative, it’s good for business too.
Having a diverse team creates a positive, virtuous cycle. Companies with women CEOs outperform the stock market, and companies with women on their boards outperform male-only boards by 26 percent. Researchers even estimate that transitioning from a single-gender office to an office evenly split between men and women be associated with a revenue gain of 41%.
Not only do companies with more women in leadership yield better economic returns, recent research also suggests it helps mitigate risk. One study shows that each additional female director reduces the number of a company’s attempted takeover bids by 7.6%. Another study indicates that companies with more women on their board had fewer instances of governance-related scandals such as bribery, corruption, fraud, and shareholder battles.
Let’s get together and support one another.
Empower your colleagues to promote gender equality in the workplace. This month we challenge you to reach out to that mentor, manager, peer, or mentee with whom you’ve been meaning to connect with. Ask her to grab coffee and send us a picture by April 30 so we can share it on the XX in Health website!