Pao trial casts spotlight on Silicon Valley diversity

SAN JOSE, Calif. – For the male-dominated tech industry, this is a time of reckoning.

Although former venture capitalist Ellen Pao lost her discrimination suit against Kleiner Perkins Caufield & Byers, her case is reverberating throughout Silicon Valley, heightening the focus on gender equality in tech companies and forcing firms to move beyond talk about diversifying their workforces.

A wide range of experts interviewed by the San Jose Mercury News say companies are taking a hard look at their recruitment and promotion practices – as well as their policies for harassment and discrimination. Leadership coaches report that they are revamping their training in the wake of the case, trying to teach companies to recognize some of the more subtle forms of workplace bias that Pao’s case highlighted. And women are banding together to ensure the conversation doesn’t die down.

“I think it will incentivize employers to take issues that arise seriously and to put in place procedures that are fair, and by that I mean evaluations, promotions, stock options, bonuses – all of those aspects of employment,” said Kathleen Lucas, a San Francisco employment lawyer.

The experiences Pao detailed in court – being excluded from all-male excursions, suffering through talk of porn stars during business trips and being invited to a partner’s home for dinner when his wife was out of town – resonated with many women in the tech industry, and some employers seem to be heeding the case as a cautionary tale, she added.

“I think a lot of employers were wiping their brow and saying, ‘Thank goodness that wasn’t us,’ ” Lucas said.

The paltry number of women and minorities in tech already had gained attention in Silicon Valley after a year in which many companies opened up about the composition of their workforces for the first time. Now, some are hopeful that the Pao case will give companies the final push they need to take more substantial steps.

After weeks of tawdry testimony that captivated Silicon Valley and drew national attention, a San Francisco jury handed legendary venture capital firm Kleiner Perkins a complete win. Pao, who sought $16 million in damages, claimed that the firm discriminated against her because of her gender and lashed out when she complained. Kleiner Perkins countered that Pao, who is now interim CEO of Reddit, simply did not have the skills to be an investor and issued a statement stressing its support for women after the verdict.

As tech companies race to revisit existing policies or implement them in the first place, Freada Kapor Klein, co-chair of the Kapor Center for Social Impact, fears some of the moves may be misguided, noting she sometimes hears calls for Silicon Valley firms to “grow up” and behave more like the rest of corporate America. For the policies to work, they must be infused with the same spirit of innovation and disruption that the firms insist on in their business models, she said.

If the policies are created “just to check the box, cover your corporate backside, that flies in the face of everything these companies are doing,” she said. “There’s wide-open opportunity for innovation, and I wish I were seeing and hearing a lot more of that.”

Women working in technology interviewed say they are pleased to at least hear more conversation about gender issues in the workplace.

“I’m not willing to say that this will push behavior forward,” said Lise Buyer, a partner at Portola Valley-based Class V Group. “But it might rein in some of the outlier inconsiderate actions at companies. People might think twice.”

But these women also caution that they don’t expect to see equal representation of women in Silicon Valley overnight, particularly in an industry like venture capital, where firms are small and bring in new talent slowly. Women are a distinct minority in Silicon Valley, comprising less than a third of the workforce at companies such as Apple and Google. They are even scarcer in venture capital, where they make up less than 5 percent of investing partners, according to research from Pitchbook.

Now, some startups appear to be contemplating gender issues from their earliest days. Since the Pao case emerged, Christine Tsai, founder of seed fund and accelerator 500 Startups, said she has seen startups with just 10 to 20 employees asking about how to create a harassment policy – considerably earlier in their development than they would have in the past.

To be sure, the case will extend scrutiny not only to venture capitalists but also to the startups they invest in, said Rayona Sharpnack, who advises women at prominent tech companies.

What’s more, Sharpnack said, it won’t be enough for tech companies to have diversity programs – they will have to take a more critical eye to their diversity initiatives in the wake of the Pao case and assess whether they are actually moving the needle.