Deerfield Management Company (Deerfield), a healthcare investment management firm focused on advancing healthcare through investment, information and philanthropy, recently released “Gender Disparity Among Venture-backed Healthcare Companies and Their Investor Base.” The paper analyzes the gender gap of healthcare companies’ corporate boards, as well as that of the investment teams finding, diligencing and mentoring these companies.
In an analysis of 140 healthcare companies that had raised substantial venture financing and published the identity of their board members on their corporate website, Deerfield found that:
- 48.5 percent of companies had no female board members
- Women make up about 10 percent of board director roles in venture-backed healthcare companies
- Among the most active investment firms in the healthcare space, only about 20 percent of investment professionals are female
- Of the six organizations analyzed that have 50 percent or more female board membership, all but one are helmed by female CEOs
The paper’s authors, Christine Livoti, Director at the Deerfield Institute at Deerfield, and Leslie Henshaw, Partner on the Healthcare Services team at Deerfield, set out to understand the gender composition of venture-backed healthcare companies that operate in the industry subsectors in which Deerfield invests.
Most of the research on diversity in leadership focuses on public companies that require a report on their diversity data. As such, information on private healthcare companies’ board composition is largely unavailable to the public. Livoti and Henshaw established a proprietary database of healthcare companies in:
- Medical devices
- Healthcare information technology
- Healthcare services subsectors
They identified the gender composition of their corporate boards.
The paper examined the gender gap of the top 50 healthcare investors. It reviewed the number of healthcare transactions that women participated in. Overall, women make up only about 20 percent of the investment professionals in this group of firms. Even this modest percentage likely overestimates the proportion of senior female investment professionals relative to their junior counterparts.
“Deerfield sits at the intersection of healthcare and investing. These two spheres women remain vastly underrepresented,” said Leslie Henshaw, Partner at Deerfield and co-author of the paper. “The findings of our report are unsurprising, but still deeply disappointing. With this research, our goal is to help our peers understand the considerable gender gap on their own teams. In turn, the research has a direct impact on the board composition of the companies they fund. Thus, increasing the imperative to seek out diverse independent board members. We have a commitment to elevating female and marginalized leaders across the healthcare ecosystem. Deerfield is increasing equity and accessibility throughout an industry in which the role of women – as caregivers, decision-makers and patients – is so pronounced.”
Given the outsized role that investors play in board seat allocation and placement, the gender diversity of investment firms cannot be ignored in the context of gender diversity of private company boards.
“While gender composition of public companies has been examined before, we examined the gender composition of private healthcare companies’ leadership and their investors,” said Christine Livoti, Director at The Deerfield Institute and co-author of the study. “We hope these findings will serve as a wakeup call for private companies in our industry to examine the gender composition of their leadership and work harder to diversify and grow more equitably across all levels of their organizations.”
The paper’s findings aim to hold companies and investors accountable. In addition, it aims to encourage greater representation and advance initiatives for investors to diversify their portfolio companies.
“Gender Disparity Among Venture-backed Healthcare Companies and Their Investor Base” is one of Deerfield’s several initiatives to improve representation in the healthcare ecosystem. Deerfield oversees Break into the Boardroom, a program that launched to help promote greater representation of female healthcare executives. Break into the Boardroom provides senior female healthcare executives with training and guidance intended to help them obtain their first board role.
In the coming months, a programmatic effort will take place at the Cure, a 12-story vertical innovations campus. The program will dive deeper on this topic.
Deerfield is an investment management firm committed to advancing healthcare through investment, information and philanthropy. For more information, please visit www.deerfield.com.