In Silicon Valley, women still a rarity in the top ranks

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When meetings are called among top executives at Netgear, a maker of Internet routers, several women take seats at the table. It’s a similar scene when the company’s board gets together to talk budgets, deals, and earnings.

Eighteen-year-old Netgear (NTGR) is an anomaly in Silicon Valley, where tech companies are largely all-male clubs with few women in senior roles. Nearly one-third of the Netgear’s senior leaders are women, which is both a source of pride for chief executive Patrick Lo and a deliberate strategy. 

“It’s absolutely imperative to get enough women in the management ranks to understand the customer’s needs,” he said. “Over the last 15 years, we have faced off with a lot of tech companies that are—as you described, all male—and we won. So that tells you something.”

Although technology industry executives like to talk about innovation and changing the world, most have done little to narrow the gender imbalance within their ranks. Usually, they explain the slow progress by saying there are few qualified women to choose from.

But there are a few exceptions like Netgear, a relatively low-profile electronics company that has around 1,000 employees. The company’s success in recruiting women leaders raises an obvious question: If Netgear can find women for top positions, why can’t the others?

Tesla Motors, the luxury electric car maker, has no women whatsoever in its senior ranks. That’s 17 men in senior positions and zero women. Meanwhile, Maxim Integrated, a maker of electronic components, has 19 men in top leadership roles and zero women.

Tesla (TSLA) did not respond to requests for comment. Maxim Integrated (MXIM) said in a statement that “we consider all appropriate candidates for positions” and “we value diversity in the workplace.” It emphasized that it has women leaders, but only in more junior positions.

Indeed, at many technology companies the gender diversity of the senior cabinet is little different from what you’d expect to find in the government of, say, Saudi Arabia.

Forty-three percent of Silicon Valley’s biggest public companies have no female board members, according to a study by the law firm Fenwick & West. By comparison, only 2% of businesses on the Standard & Poor’s 100, an index that covers a variety of industries, lacked women on their boards.

The gender gap is just a big in Silicon Valley’s executive suites. More than 45% of companies lack a top female executive compared with just 16% among S&P companies, the study found.

Last year, Twitter (TWTR) faced intense criticism for having only one woman among its top leaders despite counting millions of women among its users. Dick Costolo, the company’s chief executive, stoked the flames by publicly ridiculing a diversity advocate who accused the company of arrogance and chauvinism. The company ultimately bowed to the pressure and appointed a woman to its previously all-male board. Though the controversy quickly died down, it helped to expose how far behind Silicon Valley is compared with the rest of corporate America.

The picture is similar among rank and file workers. In recent weeks, Yahoo (YHOO), Google (GOOG), and Facebook (FB) all released diversity reports showing that men far outnumbered women in their workforces.

Meanwhile, a number of female tech workers have complained about the technology industry’s frat culture. Last week, a former marketing executive at Tinder, the dating app, filed a sexual harassment and discrimination lawsuit saying that a colleague called her a “whore” and drove her out of the company. Tinder suspended one of its executives and acknowledged that he had sent inappropriate messages, but said the lawsuit has no merit.

Netgear isn’t the only technology firm to put out a welcome mat for women leaders. Several other companies have a high number of women—at least compared with the rest of the industry. At Hewlett-Packard (HPQ), about a quarter of the senior leadership team are women, including chief executive Meg Whitman. At Yahoo, women fill nearly 30% of the top jobs, including CEO Marissa Mayer.

Amanda Kimball, a research specialist at the University of California at Davis and author of an annual survey of women business leaders in the state, said that all too often companies looking to add women to their senior ranks only consider a handful of well-known candidates. Yahoo’s Mayer and Sheryl Sandberg, Facebook’s chief operating officer, are inevitably at the top of the list, but they are already quite busy and can’t possibly serve on every corporate board. Unfortunately, many companies simply give up at that point and complain about a shortage of qualified female candidates instead of casting a wider net, Kimball said.

“I’ve been looking at these numbers for 10 years and women are sorely underrepresented—especially in high-tech firms,” Kimball said. “All these initiatives that companies talk about to help bring more women in don’t move the needle.”

To a point, the shortage of women in tech can be traced back to the reality that relatively few pursue technical degrees in college. For example, only 18% of computer science undergraduates are women, according to the Anita Borg Institute, an organization that encourages women to take up careers in technology.

But senior roles are more often filled by people with business and marketing backgrounds than those with technical experience. As much as companies say they need board members with a technical background, the role seldom if ever requires tackling complex computer infrastructure problems. Instead, it requires focusing on big picture issues like corporate strategy, finances, and acquisitions.

Netgear’s Lo alternately described recruiting women into leadership roles and both easy and difficult. It depends a lot on the role, he said. Bringing on female board members requires extra effort. Hiring recruiters to help is critical as is being open to candidates who live outside of Silicon Valley. All three of Netgear’s female board members are from outside the San Francisco area; they are all former technology executives, but are not well-known.

“If you want to go out and recruit a typical Silicon Valley board member, you could easily go through your own network and find a man,” Lo said. “You can do that in 10 minutes—it’s not that hard. But you have to be willing to dig deeper, talk to recruiters, expand your horizons.”

With three female directors, it has been relatively easy for Netgear to recruit female executives, Lo said. (The company has three female senior executives: its chief financial officer, chief marketing officer and head of human resources.) Unlike many male board members, female directors typically know other women business leaders and help to pull them in.

“Once you get into the groove , it becomes a natural process,” he said. “I don’t have to tweak it.”

Lo isn’t optimistic that Silicon Valley’s senior ranks will ever reach gender parity absent legislation requiring it. He pointed to several European countries that compel companies to fill a certain percentage of their top positions with women. To be sure, such rules wouldn’t sit well with a big part of Silicon Valley, or any other industry for that matter. But without such laws, Lo said, businesses will make little effort to change.

“We all tend to take the path of least resistance,” he said. “Why take a tougher path?”

Of course, it took quite some time for Netgear to get to the point where women accounted for a big part of its senior ranks, Lo acknowledged. When he started the process nearly a dozen years ago, the company the had very few women.

“You have to have the determination, the process and patience and persistence to get there,” Lo said.

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