Jacki Zehner On Women, Money, and Changing the World  » Kleiner, Ellen Pao, and 5 Best Practices

March 30, 2015

Kleiner, Ellen Pao, and 5 Best Practices

linkedinPublished on LinkedIn Influencers on March 28, 2015

For weeks we have been reading about how women may, or may not, be treated in Silicon Valley. This issue was brought front and center as a result of the case brought by Ellen Pao against Kleiner Perkins. We now have a verdict: Kleiner was found not guilty. I trust that the jury weighed the evidence and came to the right decision. I do not know Ms. Pao, and I have only casually met a few of the partners at Kleiner, and therefore I have no ability to speak to the merits of the case. I do, however, have a lot of experience being a woman professional in the financial services sector. I have personally experienced sexual harassment and negative bias, but I also have experienced the opposite; being promoted at a very early age to become a partner at Goldman Sachs (the first female trader and youngest female to do so in 1996). I also have a lot of experience developing best practice policies in human capital management. I have read, with much concern, not only many of the articles written about this case, but many of the comments that follow any one article. Frankly, it’s very concerning on a number of fronts.

Clearly, any rational person can look at the facts around the representation of women in senior leadership roles in venture capital and say, “Houston, We Have A Problem”. I don’t need to rehash all of the facts and statistics that have been brought up to illustrate the fact that there has to be gender bias, with the big headline being that only 6% of partners at Venture Capital Funds are women. That is down from 10% in 1999. So why few women?

In 2010, I helped fund and produce a research report on this topic titled Women in Fund Management: A Road-Map to Critical Mass and Why it Matters with the goal of answering that very question. In it, we outlined why there are so few women making decisions around capital allocation, and more importantly, a list of solutions to address the imbalance. This report may now be 5 years old, but both the reasons, and the solutions, very much apply today. My hope in producing that report was for financial services firms to embrace the findings and do something. Sadly, little has been done. There has been so much talk, but frankly, so little action. It’s time. Please download the report for all the details.

So why is this latest firestorm concerning? The reasons are two-fold. The first is that Kleiner does seem to have a pretty good record, as far as VCs go, in supporting women. However, being the best in an industry that is known to be particularly non-inclusive should not be the benchmark. The benchmark should be to be inclusive and merit based, period. What is scary is that the comment boards on so many of the articles about this case are filled with statements like, “See that is what you get when you hire women. Don’t bother. Those guys were trying, and they got slapped for it. That is what women do. Instead of just performing well and earning promotions, they sue to get what they want.” I could go on and on. That is simply not right and not fair. Are some women in some companies going to sue feeling they were discriminated against? Yes, and so are some men, but whomever does had better know the law, because at the end of the day, that is what matters. Let us not forget that the courts are filled with frivolous law suits of all kinds. This is what Americans do. Sue.

So can women play that so called ‘woman card’? I guess, but you better damn well have a case, or it will cost you a lot of money, time, and your reputation. In my experience, it is a card rarely played. As shown in this case, it is very hard to prove sexual discrimination if it is not truly there. It is especially hard to prove when it is a story of a series of micro-inequities, all of which add up to a career stalled out. Those stories are especially hard to make visible, but in my opinion, it is the main reason why we have so few women in senior leadership positions who truly want and deserve to be there. Yes, some women do sue, and if the law has been broken they should, but often they are cases that we never read about because they have been settled out of court. The reason they are most often settled out of court is because the firm is clearly in the wrong, and in exchange for money, there is a confidentiality agreement in place. It is unfortunate that these cases are not made public, because I truly believe the public would be shocked at the behavior that does occur, and if they knew, I would like to think that people would choose to take their business elsewhere. My guess is that Kleiner went to court because they felt strongly they would win, and they did. However, simply because they won this particular case does not mean that there is no sexual harassment and discrimination in Silicon Valley; it merely means the courts did not find it in the case of Pao versus Kleiner.

The other reason this case is of concern to me is because the jury found Ms. Pao’s case without merit, and therefore people will assume that Kleiner was taken through the ringer unjustly, it might make them, and other firms, less likely to hire women. Out of fear of it happening again, firms might think, “Why bother?” That certainly seems to be the theme on the message boards of late. My hope is that this case does not make Kleiner, and others in the industry, less likely to hire and promote women, but rather invite them to recommit to ensuring their companies have the best possible practices in human capital management. Every company would likely say that their goal is to hire, promote, and retain the best people possible, so all anyone is asking for, and what they should be asking of themselves, is to ensure that their policies follow this mission. If this is the outcome of the trial, what a win that would be!

When you think about it, shouldn’t VC firms be leaders in having diversity in leadership? If their goal is to identify the best investment opportunities on the planet and put their money and resources into them, shouldn’t having the best people doing that be critically important? If yes, it follows that in order to do that, you should have the best human capital management processes in place to attract and retain that talent. If 50% of the world and 60% of the current college graduates are women, to not have women in critical mass should be clear evidence that they do not have the best human capital management practices in place. There are lots of excuses, some say reasons, that women will not reach critical mass, but in 2015 these are really just excuses.

Below are FIVE best practices that seem to be related to the case, and feel free to add your suggestions in the comment section. (Again PLEASE download the report for a comprehensive list of challenges and solutions with respect to advancing women in fund management)

1) Men and women, do not sleep with people who report to you, or who you report to. Period. Especially if either party is married. Also, perhaps the person you are seeing now is not your boss, but might be one day. Be thoughtful and realize that if you do choose to date someone you work with, it may at some point create problems.

2) No matter what the size of your company, make sure you have yearly employee evaluations. Better yet, have a process for continuous job related performance feedback. Every employee deserves to know how they are doing and what they need to do to be promoted. If your firm does not do this, champion for it. One best practice we did at Goldman in the 90s was to have departmental committees that were responsible for reviewing all employees. What that did was take the potential for extreme manager bias out of the equation. In addition, high potential candidates were discussed and a career action plan was created. Oppositely, non-performing employees were discussed, and an action plan was created for them too. As an employee, you should never have to guess how you are doing. You should know. There were a few comments in the message boards saying, “Don’t bother hiring women because you can’t fire them.” Well, you actually can, and you especially can when you have transparent processes in place.

3) Know your corporate culture. If your goal is to be a meritocracy, be willing to question whether your company actually is one and don’t just assume it is. Consider doing an anonymous employee survey, or have an outside consultant do an evaluation. If it comes back you are doing great, awesome. If not, be truly willing to embrace the findings and do something about it. Also, be sure to conduct exit interviews when professionals leave. Though they may not want to tell you the real reasons why they are leaving out of fear of repercussions, at least you can try. It also may be that your culture is extreme, but if so, own it. Don’t pretend to be inclusive when really, you don’t give a rat’s ass. Warning. People, clients, may choose not to do business with you if they are not aligned with your values.

4) Do not give or share pornographic material to or with your co-workers. Also, be really thoughtful about sharing what YOU think is funny, or even worthy of conversation, in a work environment. This is not meant to take the fun out of the workplace, but rather to be respectful that others may have a personal history, or personal beliefs, that make certain types of humor deeply offensive or conversations uncomfortable. Sorry to be a buzz kill, but your place of work is not a college dorm room. Be a professional. If you are on the receiving end of inappropriate comments or behavior, call it out in the moment, respectfully. If it continues, take it up the formal channels to lodge a complaint. It nothing changes, go get a job somewhere else. Life is too short to work in an environment where you are not treated with respect or where valid concerns are not taken seriously. That said, from personal experience as a woman working in a male dominated environment, a trading floor, there is a lot to be said for being able to take a joke. And better yet, you have to be able to tell one. To be clear, taking a joke does not mean putting up with extremely offensive behavior, but you do, at times, have to let things slide. I have always tried to give people the benefit of the doubt, and I hope people do the same with me. There is a heck of a lot of common sense out there that should be put to work.

5) Ensure your company has an anti-discriminatory policy, and make sure you know it and abide by it. Don’t you want to be treated fairly and with respect? Don’t you think everyone deserves to be? This is about basic rights and responsibilities that should be in place in our places of work and in the world more generally. You should also be aware of the laws around sexual harassment, sex-based discrimination and other forms of discrimination.

In closing, UHG. Truly, I do not get why this is all so hard. This is about basic human rights and human responsibilities. When we go to work we all need to treat each other professionally and with respect. Not only are we accountable for our own behavior, but also for what we bear witness to. My hope is that this case sheds light on the fact that there is much work to be done to create truly inclusive and meritocratic workplaces. Let that be our goal.


Articles and message boards to be read on this case include The Wall Street Journal, Bloomberg here, here (Is it a loss of women in tech?), and here, I just found Bloomberg’s five lessons from the case which I am just reading now, and the New York Times here, and here.) This could go on forever.

Also of possible interest, additional articles by yours truly – Can Mothers be Traders, written after Paul Tudor Jones’ comments on the subject, a rant on the lack of women in finance in 2010, and What If I Never Left Goldman Sachs in 2014 on my dream financial services firm for women.

I am going to keep adding articles since there has been many written following the verdict.

This one from The Upshot on what Silicon Valley learned from the case.

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