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On the surface, Silicon Valley looks like the perfect meritocracy. Half its startups are founded by immigrants. You see people from all over the world collaborating and competing. And race and religion are no barriers to success.

But when you look closer, you begin to notice something strange: that, with a couple of notable exceptions, women are rarely found in the executive ranks of tech companies. The Valley’s echo chamber-what I call the “mafia”-is oblivious to criticism about this. It doesn’t seem to care about the imbalance.

Note the Twitter IPO filing. It shows that all of its board members are male, as are all of its executives-other than one lawyer whom the company added a few weeks ago-and all of its investors.

The company surely knew that this would draw attention, given the recent controversies in Silicon Valley about sexism and all of the media attention to Sheryl Sandberg’s book on women in tech, Lean In. Twitter execs either didn’t care enough to fix the imbalance; had criteria that could not possibly be met; or, they had reasonable criteria but didn’t cast a wide enough net that would capture non-traditional women or women in non-traditional roles who might be very valuable on their board.

The New York Times quoted two anonymous sources as saying that Twitter CEO Dick Costolo had prioritized recruiting a woman to be on the board but had found it difficult. I don’t buy this. Twitter is as much a media and advertising company as it is a technology company. It may have been difficult for it to find women engineers or venture capitalists, because they are in short supply; but there are thousands of capable women in other industries. And then there are academics-such as University of California San Francisco Chancellor Sue Desmond-Hellmann, whom Facebook added to its board this year.

I had said to The New York Times that the elite arrogance of the Silicon Valley mafia (the Twitter mafia) is male chauvinistic thinking. I asked how they dare think they could get away with this. Twitter’s response shows the depth of the problem. Rather than responding to the issue that was raised, Costolo simply launched a personal attack on me. Here is what he wrote: @rich1 “Vivek Wadhwa is the Carrot Top of academic sources.”

Yes, Costolo’s comments were inappropriate and he owes me a formal apology. But I don’t for a moment think that he is overtly sexist or that he deliberately discriminates. I think that he is reflecting a common behavior in Silicon Valley, where power brokers proudly tout their “pattern recognition” capabilities. They believe they know a successful entrepreneur, engineer, or business executive when they see one. Sadly, the pattern is always a Mark Zuckerberg, Marc Andreessen, Jeff Bezos-or themselves. Nerdy white males.

To me, pattern recognition is a code name for sexism and racism. It must end. The sad reality is that Silicon Valley is a boys club that stacks the deck against women and certain minorities. This may have been okay when the tech industry was in its infancy and companies like Twitter didn’t get the national attention they do. But they can’t get away with this in this day and age.

This exclusionary behavior is also harmful to companies and their shareholders. To start with, having women on boards produces better outcomes. Research by analyst firm Catalyst shows that companies with the highest proportions of women board directors outperform those with the lowest proportions by 53%. They have a 42% higher return on sales and 66% higher return on invested capital. When it comes to entrepreneurship, the advantages of diversity become even clearer.Firms founded by women are more capital efficient than those founded by men. Women-led high-tech startups have lower failure rates. Venture-backed companies run by a woman have annual revenues 12% higher than those by men; and organizations that are the most inclusive of women in top management positions achieve a 35% higher return on equity and 34% higher total return to shareholders.

The boys club won’t change easily. How can we level the playing field and encourage more women to enter the technology sector? These are questions journalism professor Farai Chideya (New York University) and I asked several hundred women to help answer, in order to create a book titled Innovating Women-which prescribes solutions. In a nutshell, women are turned off by the chauvinism and arrogance of the technology industry. There are many stories of women attending conferences and being groped or disparaged. They tell of venture capitalists who ask humiliating questions such as, “What does your husband think about your being an entrepreneur?”Women in business tell of being sidelined. Girls tell of being made fun of or discouraged from taking an interest in engineering and mathematics.

Women highlight the common stereotypes such as in the film The Social Network in which men were writing code and many of the women were dancing around in their underwear. But women also said that they believe things are changing for the better.Although the number of women studying computer science has fallen, National Science Foundation data show that girls now match boys in mathematical achievement. In the United States, 140 women enroll in higher education for every 100 men who do. Women earn more than 50% of all bachelor’s and master’s degrees, and nearly 50% of all doctorates.

Companies, such as Xerox, that make the effort to recruit women and create women-friendly workplaces are seeing great benefit. Xerox has had two consecutive women CEOs-first Anne Mulcahy and now Ursula Burns. Its CFO is a woman, as are its controller, its chief marketing officer and its CTO. It also doesn’t have the problem that companies such as Twitter say that they do-that they can’t find women engineers and executives.

As Xerox CTO, Sophie Vandebroek, (a co-author of Innovating Women) says: “In-college hiring, which is most of our engineering hiring, well over 40% are women. Some years, it was even more than 50% … As you know, in college about 25% [engineering and computer science majors], and in industry about 10–12% of engineers are women. So, if you can create a culture and environment where people can truly be themselves, they can not only bring their intellect to work, but also their passion and their heart to work. Number one they’ll be much more creative, they’ll be much more entrepreneurial. But you’ll also be able to attract people from all different colors, from different genders, different ages.”Maybe Twitter should add one of the great women at the helm of Xerox to its board? Vandebroek comes with my highest recommendation.

Vivek Wadhwa is an entrepreneur turned academic. You can follow him on Twitter at @vwadhwa and find his research at First published in The Wall Street Journal.

Vivek Wadhwa

Vivek Wadhwa is the coauthor of From Incremental to Exponential: How Large Companies Can See the Future and Rethink Innovation, a new book on how companies can thrive in this era of rapid change.