When Indra Nooyi steps down on Wednesday as chief executive of PepsiCo after a successful 12 years at the helm, there will be one less woman running a major American company. Her successor, Ramon Laguarta, is a man.
Ms. Nooyi’s departure marks the continuation of a dispiriting trend across corporate America: For all the talk of leaning in, breaking glass ceilings and diversity in the boardroom, the number of women running major companies is on the decline.
Over the past year, Irene Rosenfeld stepped down from Mondelez, Denise Morrison was ousted from Campbell Soup Company, Margo Georgiadis left the toy company Mattel, Sherilyn S. McCoy departed Avon, and Meg Whitman retired from Hewlett-Packard.
Like Ms. Nooyi, all five were replaced by men. As a result, fewer than 5 percent of companies in the Standard & Poor’s 500 now have female chief executives.
“There are a sufficient number of incredibly talented women who are capable of succeeding as C.E.O.s,” said Christy M. Glass, a professor of sociology at Utah State University who studies gender diversity in the business world. “But there are structural barriers that they confront, starting earlier in their career, and continuing all the way through being C.E.O.”
So what can be done to remedy this sorry state of affairs?
Experts said that, ultimately, the solution must start in the boardroom. Boards of directors are responsible for choosing chief executives. If they are not attuned to the importance of diversity, and diverse themselves, there is little hope for meaningful change.
“Boards tend to bring in C.E.O.s who are similar to themselves,” said Lorraine Hariton, chief executive of Catalyst, a nonprofit organization focused on women in business. “The board has to act very intentionally. Who’s in their pool? If they hire a search firm, did they ask them to present a diverse slate of candidates? And it helps if the people making the decision are also diverse.”
Indeed, a study by Ms. Glass and her research partner Alison Cook found that when boards were more diverse, they were more likely to appoint a female chief executive. The study also showed that at companies with more diverse boards, female chief executives had longer tenures than those at companies with less diverse boards.
“Companies do a better job at standardizing the hiring process for secretaries than for C.E.O.s,” Ms. Glass said. “It’s the perfect recipe for bias, particularly because most boards are male dominated.”
Even before the final decision is made, however, there are steps that boards can take to increase the likelihood that their company might one day be led by a woman.
“If we believe that more women C.E.O.s is beneficial for business and the country, then boards need to demand that their C.E.O.s have a rigorous strategy in place to advance more women,” said Julie Sweet, chief executive for North America at Accenture, the consulting firm. “That strategy needs to include sponsorship and targeted outside hiring as well.”
Strong sponsorship programs, in which men advocate for women inside an organization and work to see talented women promoted, are one step. Just as important, it helps when men are vocal about their efforts to promote women.
“Diversity and equity tend to be seen as women’s work,” Ms. Glass said. “Women C.E.O.s are asked constantly what they are doing to elevate other women, whereas men C.E.O.s are almost never held accountable for the advancement of women in their organizations.”
Another step that can help is mandating that women are considered for the top jobs. Some companies, including American Express, Nasdaq and Best Buy, have recently signed up for the Parity Pledge, committing to consider at least one qualified woman for every open role at the vice president level and higher, including C-suite executives and the board.
Underlying all these efforts is the need to eliminate unconscious bias. Ms. Hariton said common examples of bias that prevented women from advancing into more senior roles included “the double bind” — when men perceived a woman as either too aggressive or too passive, but never quite right — and assumptions about a woman’s willingness to make sacrifices.
For example, a male manager might not consider asking a woman to take a new senior role in a new city because he knows she has a family, then offer the same job to a man who also has a family. And there is the stubborn truth that often, Ms. Hariton said, “women are judged by their experience, and men are judged by their potential.”
Finally, Ms. Glass also said she hoped to see more women serving as chiefs of multiple companies over their careers. Women are far less likely than men to continue in the corporate world after serving as a chief executive.
Only twice has a female chief executive of a Fortune 500 company gone on to serve as chief of another big company, and a disproportionately low number of women who were chief executives go on to serve on corporate boards.
But even if boards get more diverse in the years ahead, that alone will not be enough.
It will take concerted effort — education, bias training, sponsorship, goal setting, targeted hiring and more — to make sure that, years from now, corporate America is not still wringing its hands about a problem of its own making.
David Gelles is a business reporter for The Times and the Corner Office columnist. Write him at email@example.com and follow him on Twitter at @dgelles.
Ok, so you've heard this before and you will probably hear it many more times. There is a disparity when it comes to women and leadership positions. You would think that by now, this issue would be fading away. Sadly, we are approaching the end of 2018 and this is still a burden that professional women carry.
Women represent only 5% of Fortune 500 CEOs yet research has shown that Fortune 500 companies with the most women board members outperform those companies whose boards are made up of mostly men. Go figure! There are a slew of books and lists that outline categories of attributes that make successful leaders. The funny thing is surveys and research have shown women to surpass men in many of these categories. So what is the problem? Why do many men still believe that women cannot successfully run a major corporation, or even a mid-sized one for that matter? Women are responsible for starting approximately 1800 new businesses per day, with an average of around 700, so we are very capable of running a company.
Working in corporate America for a little over 20 years, I have heard lots of female stereotypes like women are too emotional to hold leadership positions because all of their decisions will be made based on emotion, not rationale. I heard it also being said that women don't make the right career moves to position themselves for leadership positions (probably because they are blocked from these opportunities or passed over). Some women are actually passed over for promotions because someone has determined that she will not be able to perform well and commit a good amount of time to a position with a lot of responsibility because she has a family. Maybe she was actually accepted into the company's "leadership development program" (as a matter of record) but was never given an opportunity to "develop" after that. Oh, and I can't forget this one, "Women don't know how to 'play the game' " when it comes to landing leadership positions. When you have that kind of biased thought process running HR departments or making hiring decisions, it's no wonder women are still not getting the chance to prove their leadership ability at the rate that men do. I can think of a few men that I have worked with throughout my career that can be characterized the same way women have been. They actually fit the profile better than she does but will still have a better chance than a women of securing a leadership position. As reported in a study released in 2013, women make up 48% of the overall public sector workforce but represent only 20% of leadership roles in the sector. We have reached the year 2018 and not much has changed in 5 years. Nonetheless, women are undeniably instrumental in making major decisions, especially when it comes to purchases, and control $20 trillion of total consumer spending, according to a 2011 consumer research study. We have that kind of power but it's still not good enough for the board room. This picture is utterly distorted.
Whether admitted or not, women are very savvy and influential and when given an opportunity, can make a substantial impact on business. They have a natural ability to connect with people and create unity. Their nurturing persona allows them to solve problems better and bring about solutions that are logical and effective. Just because a woman may be more sensitive to the needs of her team does not weaken her leadership ability. Women think intuitively and creatively, which allows them the ability to be more innovative and prepared to make a positive impact on the bottom line of the company. No matter how powerful of a business you are and how big your organization is, your success will depend on those who work for you. If you don't know how to treat your people, they will eventually find a place of employment where they feel respected and valued. Women DO know how to play the game. It's just a different game than many men play. Women know that if they respect their team, inspire their team and demonstrate to them that they matter, they will be able to develop a culture where everyone is willing to work hard in their positions to help her reach her goals for the company as well as their own professional goals. People will work hard and go the extra mile for bosses who they like, respect and trust, regardless of their position. This mutual respect will allow her to be able to express specific and direct expectations to her team without coming off as a dictator and it will be received with openness and willingness. As with anything, she may not win everyone over but she can most likely win the majority. Women run and lead households and run and lead businesses of all sizes just as well. They keep their families together, businesses together, and churches too. They are the backbone of each of these entities. Their absence in any of them will be evident.
Time is well overdue to kick that ancient way of thinking to the curb. Women are working hard and running successful companies now more than ever. The number of women running technology-focused companies is creeping up as they stamp their brand in an industry that has long been a predominantly male profession. It is unfortunate that some women may never have an opportunity to prove themselves in corporate America. On the other hand, many women have taken matters into their own hands and created opportunities for themselves by branching out into entrepreneurship and starting their own companies. More angel investors are investing in women-owned businesses also, an indication that someone is taking notice. American women make up 45% of millionaires and the number continues to grow, but you still can't find too many of them holding the top spot at major corporations. It's a shame but a reality. Fortunately, there are some companies who recognize that women possess a unique skill set that will work in their favor and have made notable efforts to diversify the C-Suites with them. There is a glimmer of hope but there is still a very long way to go because inequality in pay is still a serious issue, even for those women who do make it to those highly coveted positions. For now, we will just have to keep hoping for the best. By no means am I bashing all male leaders because I know some outstanding men in leadership roles who have developed some strong women leaders. I am just speaking generally on a subject that is not brand new. It is what it is and it's not what it's not.
I would like to see Fortune 500 companies do more of these things: