Editor’s note: This post is a response to a Twitter exchange between Vivek Wadhwa and Twitter CEO, Dick Costolo. Vivek Wadhwa is a Fellow at Arthur & Toni Rembe Rock Center for Corporate Governance, Stanford Law School and Director of Research at Pratt School of Engineering, Duke University. We have included the full exchange at the bottom of this post. You can also Follow him on Twitter @wadhwa.
Twitter has taken a lot of fire for having an all-male board, almost all-male management team, and all-male investor group. The root of this problem is arrogance and a “don’t-care” attitude. This was exemplified by a response by its CEO Dick Costolo to comments I made in a New York Times article—about Twitter’s gender imbalance. Instead of responding to the issue that was raised, he tweeted “Vivek Wadhwa is the Carrot Top of academic sources.” In follow-up conversations on Twitter, he continued to hit below the belt rather than address the problem.
Costolo isn’t alone in the way he responds to criticism about sexism. Here is the harsh reality: Silicon Valley is a boys’ club — a fraternity of the worst kind. It stacks the deck against women. It leaves out blacks and Hispanics. And it provides unfair advantage to an elite few who happen to be connected. Yes, it is also one of the most diverse places on this planet, where anyone can strike it big. But that opportunity only comes of learning the Valley’s rules of engagement and mastering them. Very few can.
In its IPO filing, Twitter, for the first time, revealed detailed information about its investors and operations. This brought to light its severe gender imbalance. This is tolerable of companies in their infancy that can’t easily pick and choose whom they take money from and whom they place on the board. But the rules change once companies grow up and become public entities. They have a responsibility to the people they are taking money from: the public.
What Twitter should have done in preparation for being a public company is to have it resemble the people they are going to be taking a billion dollars from — the people who are going to be making its executives and investors rich. This includes women as well as men, and blacks as well as whites. This is not only the right thing to do from a social perspective; it provides the best return to shareholders: companies with the highest percentages of women board directors outperform those with the lowest by 53 percent. They have a 42 percent higher return on sales and 66 percent higher return on invested capital.
Getting beyond the IPO, Twitter is also doing itself — and its future owners — a big disservice by cutting itself off from the people who use its services and from which it derives all of its revenue. As the New York Times’s Clair Cain Miller noted in the article, “Having women executives matters not just for purposes of equality, business analysts say, but for product development and the bottom line. More women use social media than men, according to a study last month by the Pew Research Center; men and women use Twitter roughly equally. Twitter earns revenue from advertising and women are the chief consumers.”
What I had said to Miller was that elite arrogance of the Silicon Valley mafia, the Twitter mafia, is male chauvinistic thinking; how dare they think they could get away with this?
It isn’t that Twitter didn’t know that going public with such an imbalance would look bad for the company. I used the word “mafia” because there is an echo chamber in Silicon Valley that hears only itself and shows a disregard for the people whom it derives revenue and investment from.
It is time to change this. Twitter, and other technology companies in the echo chamber, must lead. It’s not enough for company executives to make donations or be advisers to groups such as Girls Who Code. They must take action and be the good example — just as Facebook did before its IPO. In addition to its COO, Sheryl Sandberg, Facebook added University of California San Francisco Chancellor Sue Desmond-Hellmann to its board.
Sandberg, with her book Lean In and the movement she has started, is also being proactive about fixing the gender gap and inspiring women to become engineers. She provides a good role model for the rest of the tech industry.
I am finalizing a crowd-created book, titled Innovating Women, that builds on Sandberg’s work. More than 500 women worked with journalist Farai Chideya and me on this project, which tells the stories of women who were excluded from the innovation economy but defied the odds and achieved success. Women share their lessons and provide motivation and inspiration for others. After researching the subject, I have realized that there is no shortage of great women who can lead organizations and be on boards. Women are at least as innovative as men are. They are more sensible. That is why I so vehemently argue that we should not leave them out — our economic growth depends on this.
What I learned while editing my upcoming co-authored book, Innovating Women, is that leaders must take a proactive stance in integrating diverse voices. Leaders can’t just wait for them to come across their desk in the failed hope that the best people will rise to the top. Dick, I know some great women who can help you build an even greater company. I would be glad to introduce you to them.