21 March 2006

U.S. Businesswomen Moving into the Executive Suite

Female chief executive officers still rare in the largest companies

By Elizabeth Kelleher
Staff Writer

Washington -- When Mary Chan, a Lucent Technologies Inc. vice-president, travels with Patricia Russo, Lucent's chief executive, and Cindy Christy, its president of network solutions, they often land big contracts.

Then they are asked to talk to the customer's work force about their careers.

Chan said this happens all over the world.  "Customers in Japan and Korea are fascinated with women's roles at Lucent."

"America's competitive secret is women managers," said Judy Rosener, a professor at the University of California, Irvine.

The U.S. Labor Department reports that women hold half of all managerial positions in the United States.  U.S. women are educated, professional and experienced and thus provide a resource not matched by global competitors, according to Rosener, who wrote a book on the subject.

It should be no surprise, then, that American women are moving into executive suites of corporations.

For decades, Roy Adler, a professor at Pepperdine University in California, has recorded who holds the 20 highest-level jobs at Fortune 500 companies.  In 1980, women held one in 100 such jobs; in 2004, one in five.

Lynn Shapiro Snyder, a Washington lawyer and founder of an organization for women business leaders, said women like her graduated from business schools and entered the work force in droves during the 1970s.  She said they have reached the "25-year mark" in their careers, when they have experience and, because their children are grown, "freedom to take on more responsibility."

According to Adler, a master's degree in business administration (MBA) plus 25 years' experience is exactly what it takes to advance in their professions.

Recent graduations -- 40 percent of MBAs were awarded to women in 2000 -- indicate a pipeline of women preparing for chief executive officer jobs.  If the "MBA+25 years" formula proves true, by 2025 women will make up nearly half of the high-level executives working in the Fortune 500.

LONELY AT THE TOP

Today, just eight women hold the chief executive title at a Fortune 500 company.  They lead Sara Lee Corporation, Rite Aid Corporation, Xerox Corporation, Lucent, Avon Products Inc., Safeco Corporation, Reynolds American Inc. and Golden West Financial Corporation.

These companies' share prices increased only half as much (5.3 percent) as the Standard & Poor's 500 stock index (9.9 percent) during the last year.  Still, the women are relatively new to their jobs -- six of the eight appointed since 2002.

Some inherited companies in distress.  Mary Sammons, of Rite Aid, took over operations there after scandals led to criminal charges against several company officials.

Anne Mulcahy, of Xerox, said that by May 2000, her company was "in deep trouble" due to stiffening competition, weakening markets and an investigation of accounting improprieties.  It was then she was named president -- "clearly, a case of the responsibility being thrust upon me," she said.  Mulcahy was promoted to chief executive officer in 2002.

Chan said that until recently her boss, Russo, was chief executive and chief operating officer at Lucent.  "She was juggling many jobs: that's probably one attribute we'd assign to women."

"The 'glass ceiling' is firmly intact," said Ilene Lang, president of Catalyst, using a metaphor in vogue since the 1980s to describe why more women have not been promoted to chief executive officer.

Catalyst surveys men and women executives and says women report barriers that men do not: gender stereotyping, few role models and no access to informal networks, like the golf game at which men talk business.

But Snyder, named by Modern Healthcare magazine one of the "100 Most Powerful People in Healthcare," says women leave large companies to build start-up companies, which "fuel the economy."

Rosener said such women-led, smaller companies employ more workers than all of the Fortune 500 firms.

Tracey Warson, a vice president at Wells Fargo, a financial services company, said: "I'm a believer in women staying in the big companies.  If they hang in there … we'll have an improved universe."  There was a time when Warson worried she could not be a business leader and a good parent, but her husband scaled back his hours to help the children.  Today, Warson directs a high-worth client group for the bank, and her teenagers are proud of her, she said.

Working mothers look to Sara Lee's chief, Brenda Barnes, who left her job as president of Pepsi-Cola North America in 1998.  Taking six years off to be with family was a move that might have been the death knell to any executive's career.  But today, Barnes heads the largest of the women-led companies.

Snyder said the path to more women chief executive officers is more women on corporate boards, which hire the chief executive officers.  Women hold 18 percent of board seats at Fortune 500 companies, according to Adler.  While turnover is not rapid -- typical tenure is 11 years -- during the early 1990s, women took all of the board seats that opened up.

"You can build a case that it's our darkest hour or it's our finest hour," said Rayona Sharpnack, of the Institute for Women's Leadership, "but the fact that women make 80 percent of buying decisions should push companies to welcome them onto boards."

Mulcahy, of Xerox, cites research findings that diverse groups come up with more innovative solutions to problems than do homogeneous ones.  Inclusiveness should not be treated as "something nice to do, but as a business imperative," she said.

For related information, see Women in the United States.