Women’s corporate clout fades with Nooyi
Number of female executives ebbs with PepsiCo CEO’s exit
In her 12 years as chief executive of PepsiCo, Indra K. Nooyi has been part of an elite club: she is one of only a small number of women leading large corporations.
It is a position that has often meant her every move received greater scrutiny than the actions of her male peers.
That was true again Monday, when Nooyi, 62, announced she was giving it all up.
She will be handing the reins of the multinational conglomerate to Ramon Laguarta, a 22-year veteran of the company in October.
Her departure served as a stark reminder that the absence of women at the very top of corporate America remains a problem.
She was one of 11 such women at the helm of the biggest U.S. companies in 2006. She’s now one of only 25 in the Standard & Poor’s 500. She will remain PepsiCo’s chairwoman until early 2019, the company said.
In recent months, the list of departing female chief executives has been long.
It has included Denise M. Morrison at Campbell Soup, Margo Georgiadis at the toy company Mattel, Sherilyn S. McCoy at Avon, Irene Rosenfeld at Mondelez and Meg Whitman at Hewlett-Packard. All five have been replaced by men. The number of women in top jobs has, in fact, fallen sharply.
“I hate seeing her step down this particular year because we’ve had a 25 per cent drop in women CEOs at major firms, and this is a big loss,” Jeffrey A. Sonnenfeld, the senior associate dean of leadership programs at the Yale School of Management, said of Nooyi.
In some cases, the women at the top have been pushed out by activist investors seeking a shakeup in the executive suite.
“A lot of women have been easy targets when their performance weakens,” Sonnenfeld said.
“Maybe unconsciously, institutional investors get weak-kneed and don’t back them up, and boards of directors collapse like lawn furniture.”
Others tie the lack of women at the top not only to the choices of individual executives but to a wider culture that is biased against women in the workplace, some experts argue.
Women struggle as they adapt their careers to the demands of child-rearing.
They are often viewed differently because they do not fit the mould of the leaders, overwhelmingly men, who preceded them.
“We have found that overall, we are stuck. We are seeing very little movement,” said Lareina Yee, senior partner at McKinsey & Co. in the global technology practice and co-author of the report “Women in the Workplace,” which found that only one in five of the most senior executives at U.S. companies is a woman. “We see that entry levels don’t look that bad, but women are not promoted at the same rates as men to the first manager role. We start to see the imbalance of opportunity early on.”
Nooyi’s impact on PepsiCo cannot be overstated. Over the past decade, she has transformed the company dramatically, expanding its presence in international markets, and also shifting its products increasingly into healthier beverage and snack choices. In addition to Doritos and Mountain Dew, it now offers customers baked chips and water brands, and it recently acquired Bare Foods, a maker of baked fruit and vegetable snacks. As Nooyi steered the change, she clashed with activists and other investors who told her that her ideas were flatout wrong. Today, half of the company’s revenues come from healthier drink and snack products, up from 38 per cent in 2006.
Still, Nooyi spent much of her tenure at the top defending her strategy to critics. When PepsiCo lost market share on its namesake product a few years ago, critics claimed Nooyi was too focused on the “healthy” strategy. Others, including bil- lionaire activist Nelson Peltz of Trian Fund Management, wanted the company split into two, a beverage giant and a snack king. Nooyi held firm. Since she took over, revenue has grown to $63.5 billion from $35 billion in 2006 while the company’s share price has nearly doubled in that time.
In an emailed statement, Peltz congratulated Nooyi on a “strong decade-plus of corporate leadership” at PepsiCo.
In an interview, Nooyi said she was stepping down now, in part, because she wanted to spend more time with her 86-year-old mother. “You reach a point where you get tired,” Nooyi said. “Physically tired. And your family starts to demand more time of you. I’ve reached that point.”
Inside PepsiCo, Nooyi was known for working incredibly long hours — as many as 20 hours a day, often seven days a week. When asked Monday whether she felt that made her a good role model for other women, Nooyi said, “probably not.”
“But you have to remember when I started working in this corporate world, there were hardly any women in the jobs I was in. At that time, 30 or 40 years ago, expectations for women were unreasonable. We had to produce a better product and do everything much better than the men in order to move ahead,” Nooyi said.
Born in Chennai, in southern India, Nooyi joined PepsiCo in 1994 and held a series of strategy roles before becoming its chief financial officer in 2000, and in 2006, its chief executive.