For those fearful of needles, the biotech company Theranos seemed to provide the cure. Theranos, valued at $9 billion in 2015, promised to revolutionize blood testing by using small amounts of blood through a finger prick to scan a bank of 240 diseases and help diagnose a patient. Apart from being a saving grace for people fearing needles, Theranos promised to make healthcare more efficient by increasing the speed and portability of blood testing. However, the excitement for this new technology came crashing down once news broke that the founder and chief executive of Theranos, Elizabeth Holmes, was indicted for fraud. She allegedly misled investors and provided falsified blood test data to customers and investors. Now, she could ultimately face up to 20 years in prison and lose millions of dollars.
Recently, a New York Times guest article by the former reddit CEO Ellen Pao asserted that due to sexism, Holmes is being held accountable more harshly than her male counterparts. To support her opinion, Pao draws the comparison between this case and the unethical actions taken by companies such as Juul and Facebook. The e-cigarette company Juul, led by CEO Kevin Burns, was under investigation for marketing the technology to children, which contributed to the rise in youth nicotine addiction. Facebook, led by CEO Mark Zuckerberg, was under investigation for failing to limit hate speech on their platform, which arguably played a substantial role in the Myanmar genocide. Pao argues that since the CEOs of these companies only faced financial consequences for their misdoings, they were not held publicly accountable in the same way as Holmes.
However, Pao overlooks a significant distinction between Holmes’ case and these two cases that explains the accountability inconsistency. Our legal system distinguishes between immorality and illegality — Holmes acted illegally and unethically, whereas Juul and Facebook acted unethically but not illegally. Although Juul and Facebook’s actions resulted in consequences arguably worthy of punishment, their actions were not illegal.
For the most part, executives in similar situations to Holmes are being held legally accountable irrespective of their gender. For example, the founder of electric vehicle startup Nikola, Trevor Milton, is currently in court for misleading investors and could also face a prison sentence of up to 20 years. Similarly, the CFO of energy giant Enron, Andrew Fastow, committed fraud by hiding the company’s losses and faced a sentence of 6 years in prison in 2004.
Nonetheless, Pao is right that there is a blatant aspect of sexism in Holmes’ case. But this has much more to do with how the media is covering her rather than her legal accountability. The media, for no good reason, has focused on Holmes’ fashion style at trial and the depth of her voice at work. In a technological world dominated by men, women are scrutinized for their personal attributes while men evade similar scrutiny.
When a woman like Holmes breaks the glass ceiling, both the acclaim and criticism are more pronounced. There is great pomp and circumstance for the accomplishments of women, but when they commit an illegal and unethical act comparable to those of their male counterparts, the stigma is more severe. While male leaders have a chance to recover after their punishment, the media’s coverage of Holmes will create a reputational stain much harder to remove.
Sexist scrutiny means that, unfortunately, the stakes are much higher for women leaders: the basic rules of the game may be the same, but the audience is much harsher when it comes to foul play by women.