Suc­ces­sors for fe­male CEOs still mostly men, data show

Northwest Arkansas Democrat-Gazette - - BUSINESS & FARM - JEFF GREEN

When Mon­delez In­ter­na­tional Inc. said Wed­nes­day that Chief Ex­ec­u­tive Of­fi­cer Irene Rosen­feld was re­tir­ing, it was no sur­prise that the food com­pany also an­nounced that she would be suc­ceeded by a man.

Since 2009, 19 fe­male CEOs of Stan­dard & Poor’s 500 com­pa­nies have stepped down. In only three of those cases were they re­placed by an­other woman, ac­cord­ing to data com­piled by Bloomberg. Rosen­feld, 64, will re­tire in Novem­ber and be suc­ceeded

by Dirk Van de Put, who cur­rently leads McCain Foods.

“It un­der­scores just how truly ex­cep­tional it is for a woman CEO to be suc­ceeded by an­other woman,” said Brande Stellings, se­nior vice pres­i­dent of ad­vi­sory ser­vices at Cat­a­lyst, which tracks di­ver­sity in com­pa­nies. “Since we had the first woman CEO in the For­tune 500 in 1972, there’s only been 62 women CEOs in to­tal, which is pretty stag­ger­ing.”

In­vestors are putting pres­sure on com­pany boards to im­prove lack­lus­ter di­ver­sity records, par­tic­u­larly this year, when State Street Corp. and Black­Rock Inc. voted against hun­dreds of di­rec­tors at com­pa­nies seen as lag­ging on gen­der par­ity and other mea­sures. McKin­sey & Co. and other con­sul­tants are pro­vid­ing a grow­ing body of re­search in­di­cat­ing that com­pa­nies that shift away from a mono­lithic white male lead­er­ship out­per­form those that haven’t changed their com­plex­ion. Still, most mea­sures of di­ver­sity have been largely un­changed for a decade.

The di­rec­tion a com­pany takes on di­ver­sity comes from its board­room, where white men have dom­i­nated since last cen­tury. When choos­ing a new CEO, board mem­bers tend to rely more of­ten on

peo­ple they know than on ex­ec­u­tives se­lected by re­cruiters who screen can­di­dates from a wider field, said Trina Gor­don, CEO of ex­ec­u­tive-search firm Boy­den. About 80 per­cent of S&P 500 di­rec­tors are men.

“Boards are still not very di­verse, and if you don’t have di­ver­sity at the gov­er­nance level, there’s not a lot of changes that are go­ing to hap­pen,” Gor­don said.

Women, who make up about half of the U.S. work­force, aren’t fore­cast to gain par­ity in the board room un­til 2032, ac­cord­ing to a June es­ti­mate from ex­ec­u­tive re­cruiter Hei­drick & Strug­gles.

De­bra Crew’s pro­mo­tion to suc­ceed Su­san Cameron as CEO at Reynolds Amer­i­can Inc. ear­lier this year was the first woman-to-woman han­dover in the S&P 500 in five years, ac­cord­ing to data from re­cruiter Spencer Stu­art. The dis­tinc­tion was short-lived be­cause even be­fore she took the job, British Amer­i­can Tobacco PLC said it would buy Reynolds. Now Crew re­ports to British Amer­i­can Tobacco CEO Ni­can­dro Du­rante.

Be­fore that tran­si­tion, the last time a fe­male CEO was re­placed by an­other woman was in 2012, when Sheri McCoy suc­ceeded An­drea Jung at Avon Prod­ucts Inc. McCoy an­nounced her res­ig­na­tion Thurs­day from Avon, which is no longer in the S&P 500. A suc­ces­sor hasn’t been named.

The third ex­am­ple in re­cent

years was Xerox Corp. CEO Ur­sula Burns, who re­placed Anne Mulc­ahy in 2009. Burns re­tired this year and was re­placed by Jeff Ja­cob­son, her for­mer chief op­er­at­ing of­fi­cer.

When fe­male CEOs step down, it’s typ­i­cally a man wait­ing in the wings. Among the 27 S&P 500 com­pa­nies run by women, most chief op­er­at­ing of­fi­cers or pres­i­dents are men. At Pep­siCo Inc., In­dra Nooyi ap­pointed Ra­mon Laguarta as chief op­er­at­ing of­fi­cer last month, set­ting him up as her pos­si­ble suc­ces­sor.

A big is­sue is that com­pa­nies of­ten pre­fer to make a safe choice for lead­er­ship, se­lect­ing an ex­ec­u­tive with a track record for run­ning a com­pany or a large unit, and those ex­ec­u­tives are still over­whelm­ingly male, said Gor­don.

“The sta­tis­tics are daunt­ing,” she said. “There is a per­pet­u­a­tion of the sta­tus quo.”

Even as the num­ber of women run­ning the big­gest com­pa­nies falls to 25 from 27 this year — thanks to the de­par­ture of Crew and Rosen­feld — it re­mains a rel­a­tively new phe­nom­e­non to have so many at one time, Stellings from Cat­a­lyst said. Be­tween 1972 and 2000, there were never more than four fe­male CEOs serv­ing at one time, she said.

“You could eas­ily fit all of them, in the his­tory of our time, into one room,” Stellings said.

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