August 13, 2018
That’s right, Tom. Last week, one of the iconic women of corporate America – Indra Nooyi – announced she was stepping down as CEO of PepsiCo after 12 years at the helm. As a result, the number of female CEOs fell again, and the number of female CEOS of color was reduced to a mere handful. Today, I want to highlight the current trendlines for women in leadership positions and talk about why it is so important.
I absolutely want to see more women in corporate America. To put the numbers in perspective, we have gone from 32 female CEOs last year, to 24 this year. The fact that there are 25% fewer women in leadership roles than there were last year tells us the trendline is going in the wrong direction. Without question it’s good for America and good for business where there’s no glass ceiling. However, I would be cautious about reading too much into this particular move. Some of the women who have stepped down this year, like Indra Nooyi, are simply ready to retire. Others may have had issues related to performance. Some may be choosing to do something else. A lot of work remains, but this move in particular is not part of the bigger problem. In fact, under Indra, PepsiCo has been a leader in empowering women in their workforce.
The biggest problem we have is that there is simply not a bench for companies to choose from at this point. Most of corporate America has failed to create a pipeline that allows successful women to reach the senior management roles. Just look at the numbers. According to Catalyst, a nonprofit that advocates for women, while women make up half of the workforce, just 39 percent of management roles were filled by women in 2017. And the number of women in senior roles declined from 23% in 2017 to 21% this year. Ultimately, you get what you incent, and these figures tell me that corporate America continues to admire the problem rather than doing something about it. Diversity in the work force is the only thing that we are always working on in corporate America. Everything else is make or break. To fix the problem, people have to be rewarded for making progress, and held accountable it they do not.
First and foremost, it is good for business. Studies show that companies with diverse leadership are more profitable. To be a best in class company in the 21st century, you want to have a team that can interact with a global customer base, can build the best supply chain, and that reflects and understands the interconnected world we live in. On top of this, studies show that if you want to solve a problem, you want to have a group of people with many different perspectives. Ultimately, diversity is a competitive advantage. Finally, it is just the right thing to do. Our companies should reflect our diversity as a country. There is the saying you can’t be what you can’t see. By increasing the number of women and people of color in leadership roles, we are allowing children from all walks of life to recognize they can be anything they want.
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