Saturday, March 31, 2012

Obstacles

What do you do when you come up to the proverbial “immovable object?” If you’re driving somewhere and come across construction barring your progress along that route, what do you do?  Such a simple example offers many lessons for women who would aspire to corporate boards or women who advocate on behalf of adding women to corporate boards.

Do you stop and yell at the workers, expecting them to cease and desist and let you through as you had planned your trip?  Do you insist that “they” be the ones to change?  Do you expect “them” to make your journey easy?  Do you embarrass them if they don’t agree with your plans? This is the philosophy of many women director advocates who believe that shaming directors into bringing more women on boards is a valid strategy.  Expecting others to dictate diversity mandates through quotas or entitlements is based on a presumption that the only way to the desired goal is “if and only if” society or culture or men change. 

An alternative strategy is to wait.  Bide one’s time until society or culture or men change and welcome women into the boardroom.  Women who select to sit on large numbers of non-profits or government commissions are filling their time with “meaningful” roles until such time as they can be welcomed into the power structure of business boards.

A third strategy is “to opt out.”  That is the euphemistic equivalent of “to quit.” Men describe the quit option as “to wimp out” so as to discourage themselves from doing it.  Women use the more delicate form so as to allow themselves to feel good about that choice.  Either way, it still means to take your toys and go home.

These are not very attractive options for those who truly wish to reach the destination: serving on a board role as a growth or governance advisor, to help an enterprise reach its full potential, to collaborate with like-minded intelligent people in growing a business successfully.

For those for whom the destination is the priority, there is the option of “find another path.”  The destination is so worthy that she very much wants to get there. Overcoming the obstacle is part of what makes the end result valued.  Such women know they have the intelligence and a capacity to learn. They are focused on finding the paths to the destination -- around, over, under or through apparent obstacles. 

A woman who seeks a board role recognizes that there are others like her who will advise, collaborate, and help her find her way.  She has to search them out and persuade them to answer her questions about alternative routes.  They may be men or women. She has to show them she is worthy of their attention -- that she has value to bring to the process.

These women are learning that alternative board roles available, today, include smaller, private, and pre-IPO business enterprises.  Many of these are just receiving capital investments for the first time.  Many are women-owned or co-owned.  They need specific expertise which they can get from advisors or investors. 

In the first three months of 2012, NewsOnWomen.com reported that 25 women-owned/co-owned enterprises received a total of $164.7 M in seed, angel, or early-stage investments. The average was $6.6 M per company. Especially interesting was that many of these firms received funds from pools of investor groups, rather than the traditional individual venture capital investment.

Enterprises were primarily in the mobile or digital application space and in bio-pharm/-medical industry sectors.  Eighteen (72%) of the deals were for companies based in California.  The bulk of these were in the Menlo Park/San Francisco hub, but three enterprises were from Los Angeles, although the investors typically were not from Southern California.

On average, we would estimate that up to 6 directors are added to each entrepreneurial board, which means this level of new investment represented a new director candidate pool of 150 nominations. Intelligent women are now focused on what they need to do to prepare to serve on this type of emerging enterprise in today’s digital, mobile, highly scientific business marketplace. Governance at this level includes strategic advisory services to enable entrepreneurs to capture markets, overcome competition, and reach into the global economy. Sharp and savvy women leaders in business today are focused on this destination rather than yesterday’s obstacles to their progress and success.

Tuesday, March 20, 2012

What Will the Supreme Court Say?

The Supreme Court of the United States will be reaching an important decision on the issue of affirmative action before the end of the current session. 

This decision follows the very long tradition that commenced with Brown v. Board of Education of Topeka (1954) which held that state laws establishing separate public schools for black and white students were unconstitutional. Segregation, in law, was a violation of the 14th Amendment’s Equal Protection Clause:  legalized “separateness” was held to be inherently “unequal.”

In Regents of the University of California v. Bakke (1978), the Supreme Court declared unconstitutional the practice of the University of Davis Medical School which preserved 16 seats out of 100 exclusively for African Americans. Allan Bakke, a white male Veteran and National Merit Scholar, argued that the quota for African Americans violated the 14th Amendment’s Equal Protection Clause.  The Court held that educational institutions could legally “consider” race as one of many factors in their admission policies, but they could not use arbitrary quotas. 

California voters in 1996 passed Proposition 209 which amended the state constitution and prohibited state government institutions from considering race, sex, or ethnicity, specifically in the areas of public employment, public contracting or public education. 

Michigan voters in 2003 passed their version, Proposal 2 (the Michigan Civil Rights Initiative or MCRI), which amended the state constitution and barred state government institutions from discriminating against, or granting preferential treatment to, any individual or group on the basis of race, sex, color, ethnicity, or national origin in the operation of public employment, public education, or public contracting.  The US 6th Circuit Court of Appeals overturned the amendment, a decision which may be appealed by the State Attorney General.

In Gratz v Bollinger (2003), the Court upheld Bakke and invalidated University of Michigan's undergraduate admissions policy, saying that it used a “mechanistic” point system which "ensures that the diversity contributions of applicants cannot be individually assessed." Jennifer Gratz and Patrick Hamacher, both white, objected to the 20 bonus points awarded to underrepresented ethnic groups in the University of Michigan admissions policy. (Jennifer Gratz is the Executive Director of the MCRI, the organization that advocated passage of Proposal 2.)

In Grutter v. Bollinger (2003), the Court upheld the affirmative action admissions policy of the University of Michigan Law School saying that a race-conscious admissions policy could consider race among other individual applicant characteristics. The court held that a quota system, as in Gratz, would have been unconstitutional in light of the Bakke case. Barbara Grutter, a white Michigan resident, argued that she was being discriminated against on the basis of race.

Now in 2012/2013 comes the case Fisher v. University of Texas at Austin. Plaintiffs Abigail Noel Fisher and Rachel Multer Michalewicz, both white females, were denied admission. The University of Texas automatically accepts the top 10% of all high school graduates regardless of race, but Fisher et al. did not make it in that cut. Those who do not qualify at that tier move into a secondary pool of candidates where race is given consideration under the state’s affirmative action policies. The university applies “diversity criteria” to encourage representation of minority groups. Fisher et al. argued that that constitutes a violation of their 14th Amendment rights to Equal Protection under the law because there was one system for the top 10%, where race was not considered; but another system for the next review tier, where race was explicitly considered.

Will the University of Texas’ secondary tier of affirmative action, which “encourages” representation of diverse minorities, survive scrutiny by this Court which has been rigidly split 5-4 in favor of conservatives?  What will the impact be of Elena Kagan recusing herself because she was Solicitor General when the case came up through the courts?

It is interesting that so many of these law suits have been brought by white women who perceive that actions to promote diversity in public institutions allegedly cause them to be denied their Equal Rights Protections under the 14th Amendment. Ironically, the 14th Amendment was one of the “Reconstruction Amendments” passed by Congress in 1868 to ensure that all citizens born in the United States were entitled to equal protection under the law (reversing the Dred Scott v. Sanford (1857) decision which had barred African Americans from becoming citizens).

Quotas? Diversity? Equal protection? Equal rights? Affirmative action? Is prohibition of discrimination the same thing as a requirement that differences be explicitly considered as a selection criteria? Is the mandate to consider diversity an exclusion of some others by denying their rights are equal?

These are not trivial issues.  We have not found our way out of the original debate: how can separating our citizens into categories possibly ensure that we will ensure that they have equal opportunity under the law?