Glass ceiling is restored as women leave

Why are outgoing female CEOs replaced by men?

And then there were 24. With the announcement of Indra Nooyi’s departure on Monday as chief executive of PepsiCo, only 24 women will remain as chief executives of the top publicly traded companies that comprise the Standard & Poor’s 500 index, accounting for just 4.8 per cent of its leaders. And the number is going down, not up. Two other female chief executives recently stepped down — Denise M. Morrison of Campbell Soup and Irene Rosenfeld of the snack-food maker Mondelez International.

And only one new female executive being appointed, Kathy Warden of Northrop Grumman.

That should raise all sorts of soul searching about what’s happening in corporate America.

Especially at a time when so much public focus and effort has been put on gender diversity.

One of those many questions is this: even at companies run by prominent women — where you would think that the glass ceiling had been shattered — why is their replacement hardly ever another woman?

Only three times in history has a woman succeeded another woman as chief executive at a publicly traded company, according to Catalyst, a non-profit consulting and research firm on women in business.

Anne Mulcahy was succeeded at Xerox in 2009 by Ursula Burns, Andrea Jung of Avon was succeeded by Sheri McCoy in 2011, and Susan Cameron of Reynolds American was succeeded by Debra A. Crew in 2017.

Nooyi will be succeeded in October by Ramon Laguarta, who has been with PepsiCo for 22 years.

There are many explanations for the dearth of the promotion of women to the C-suite: boards still have fewer women (about 21 per cent for the S&P 500), a gender pay gap still very much exists, female executives generally still lack the same opportunities to move up the ranks and there are still simply fewer women in upper management at most companies to be promoted.

Among the explanations is one that is particularly counterintuitive and so sensitive that no female chief executives would speak about it on the record.

Several female leaders told me privately they hesitate to promote women into senior positions because they are worried that they will be accused of bias.

In their view, a man will be heralded for doing so while a woman’s motives might be questioned.

It is worth lingering on that for a moment. If some female executives feel reticent to promote women for fear that their actions will be questioned, then the entire approach to creating more gender equality needs to be rethought.

Ilene Lang, interim president & chief executive of Catalyst, scoffed at the idea that female chief executives should be responsible for creating opportunities for woman any more than men are. “Why are women expected to promote more women?” she asked. “Why are the women being over-scrutinized more than men? That’s the issue. It’s unfair to conclude that women should be doing more than men do.”

One other significant explanation for the lack of women succeeding other women as chief executive is this: out of the 71 instances in which women have been named chief executive, only 15 were external candidates, according to Catalyst.

In other words, culturally, it is much less likely that a woman will be hired from the outside, which means having a diverse development pipeline becomes even more important.

Nooyi said in an interview that the pool of talented women with the right skill set was in short supply when the company considered succession planning at PepsiCo.

“I would have loved for the board to have had a woman to pick from. But at the end of the day, the board selects the CEO, and we just didn’t have any women who were ready for the job,” she said.

“What happens in today’s world is that everybody is trying to get high-profile women. So what happens is that we develop these women and other people poach them.”

“Smaller companies ask them to be the CEO of a smaller company, sometimes before they are ready for the CEO job,” Nooyi said, adding that she actually had a female executive in mind as her successor, but that woman left several years ago for a job elsewhere.

Only three times in history has a woman succeeded another woman as CEO at a public company