Men replacing women as CEOs far too common
Boardroom diversity still lacklustre as investors put pressure on U.S. companies lagging in gender parity
SOUTHFIELD, MICH.— When Mondelez International Inc. said last Wednesday that chief executive officer Irene Rosenfeld was retiring, it was no surprise the food company also announced 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 of Catalyst.
“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,” said Stellings, senior vice-president of advisory services at Catalyst, which tracks diversity in companies.
Investors are putting pressure on U.S. company boards to improve lacklustre 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. 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 the 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 per cent 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 boardroom 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 female-to-female 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 (BAT) Plc said it would buy Reynolds. Now Crew reports to BAT CEO Nicandro Durante.
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, Gordon said.
“The statistics are daunting,” she said. 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.