Feisty dame who blazed a trail to the top
It took an American, Marjorie Scardino, to crack – or bypass – Britain's glass ceiling. Margareta Pagano looks at how she did it and what's next for the publisher Pearson
Margareta Pagano is a former business editor of the Independent on Sunday who now writes columns and business interviews for a range of publications, including the Independent, Independent on Sunday and London Evening Standard.
Thursday 04 October 2012
After 15 years, it was only a question of when. Dame Marjorie Scardino told the chairman in January, or "sometime around then", that the time was right to step down from the helm of Pearson, owner of the Financial Times.
"The company has wonderful opportunities that involve taking long-term choices, and it felt like a good place for Pearson to start a new chapter," she said yesterday. "As far as announcing now, I wanted a pretty short hand-off, nice, but not too long."
Dame Marjorie is said to have promised she would stay until the share price doubled – which she hasn't quite managed – and joked to friends earlier this year that "I might never leave" if she stayed to do that.
It's just the sort of quip she would make. Anyone who knows the striking lawyer-turned-reporter from Arizona is struck by the way she cuts to the chase but is always amusing with a twinkle in her eye. Her arrival in British corporate life caused as much of a flutter as her departure is promising to do, raising immediate questions over the future of the FT and The Economist.
As the first female chief executive of a FTSE 100 company, she made waves, particularly as no one in the City had heard of her. What a contrast with today. Dame Marjorie, 65, bows out after 15 years as one of the longest-serving FTSE 100 bosses. Last year, she set a record as Britain's highest-paid female director, earning £9.6m in cash and share awards.
Yet her appointment in 1997 was an unlikely one, as her background as chief executive of The Economist didn't fit the corporate mould at all. But that was also the point. According to Pearson insiders, it was precisely because her background was so novel, and she was American, that she could crack – or at least bypass – the supposed glass ceiling, as she didn't conform to gender or talent stereotypes.
One board director said at the time: "Someone at Pearson spotted her at The Economist, liked her energy and ambition. But if she had been presented on a list prepared by headhunters or the HR department, I doubt she would have made it to a shortlist."
It is interesting, too, that almost all the UK's female chairmen and chief executives – such as the former head of the London Stock Exchange, Clara Furse, and Cynthia Carroll, chief executive of Anglo American – are foreigners.
Dame Marjorie herself is no champion of quotas, but is surprised by the lack of women on FTSE 100 boards today. "I did think that in 1997 there would be a lot more progress by the time I left Pearson, and I don't think there has been a lot of progress with women on boards," she said yesterday, adding: "But I have always thought it was not helpful to just pile women on to boards because they were women."
When she took the helm, Dame Marjorie, who has three children, didn't waste time. Her first task was clearing out the dead wood by selling non-core businesses such as Lazard, the investment bank, Madame Tussauds, and RTL, the European broadcasting group. But she also made much of her personal touch, visiting as many as possible of Pearson's 40,000 employees around the world and always replying to emails from staff.
Education became her big vision. She set off on a whirlwind of deals –buying Simon & Schuster assets from Viacom, and then spending $2.4bn (£1.5bn) on National Computer Systems, a US educational testing company. More recently, Pearson has added Harcourt's testing business, eCollege, Wall Street English in China and Sistema in Brazil. So it makes sense that her successor is John Fallon, head of the international educational interests.
Education now makes up 73 per cent of profits, but there are new pressures in this business, which may be one of the reasons Pearson has decided to shake up the board now. One of the biggest problems for Pearson's new businesses is that US education budgets are being squeezed while new digital technologies and open-source textbooks mean that students are being offered information for free.
That is also why analysts are again sharpening their pencils over the potential sales of the FT, The Economist and Penguin, as they don't fit with Pearson's strategy of reducing exposure to volatile advertising revenues. The FT, which is now profitable, wouldn't be difficult to sell – there has always been a long list of admirers, including Topshop's Sir Philip Green, while Bloomberg and Thomson Reuters have made approaches.
Under Dame Marjorie, the newspapers were safe. She has always flatly refused to sell, declaring famously that the Pink 'Un would only be sold "over my dead body". She loves newspapers but, friends say, owning the FT gave her and the rest of the business influence.
So how did she get there? Dame Marjorie dropped out of law school at George Washington University to become an Associated Press reporter. She met her future husband, Albert Scardino, there, and edited his work. They married, and she went back to law, getting her degree while he continued in journalism. Then they moved to Savannah, Georgia, where she worked as a lawyer. In 1978, they started their own newspaper, the Georgia Gazette, which won a Pulitzer prize for its journalism. But the Gazette lost money, closing in 1985.
Dame Marjorie became managing editor of the US edition of The Economist while her husband carried on as a successful journalist at The New York Times. The circulation of the US Economist doubled, and she was brought to London in 1992 to take charge of the magazine.
Since she took over, Pearson's sales have nearly tripled to £6bn, as have profits, which reached a record £942m in 2011.
She may have just missed doubling Pearson's shares – they stood at 658p when she joined – and closed at £12.30 yesterday.But they are up 87 per cent.
It's a great record, but some City analysts argue that the growth cannot keep coming in the current climate.
Only time will tell whether this is great succession planning, or that Dame Marjorie is leaving while the going is good. And why not?
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