The most significant corporate story of the week was perhaps the news that PepsiCo, one of America's biggest companies, has appointed a woman as its next chief executive, and an Indian-born one at that. The announcement was not exactly out of the blue, though it did come a little sooner than anticipated. Indra Nooyi has long been seen as the obvious successor, and indeed has been repeatedly persuaded to turn down offers from elsewhere on the understanding that she would eventually get the top job.
The incumbent, Steve Reinemund, has by common agreement done a creditable job in his five years at the helm, having without fuss or fanfare made Pepsi bigger than its old rival Coca-Cola in terms of market capitalisation and apparently more adaptable to modern trends in consumption.
Unlike Hank McKinnell at Pfizer, another corporate goliath which has recently switched CEOs, there is no question of him being hounded out of his job, and on this particular occasion we should perhaps accept his formal explanation for standing down early as genuine: he wants to spend more time with his family, code, usually, for "you're fired".
Yet Ms Nooyi is hungry and ambitious and there was perhaps an element, vehemently denied, of threatening to go unless the board hurried up and gave her the position. Whatever the behind-the-scenes wrangling, there is no doubting either the ease of the handover or the significance of this appointment, which is powerfully symbolic both of the rising power of women in the higher echelons of global capitalism and the increasingly international profile of its leaders. Even 10 years ago, to appoint an Asian woman as head of what is still an American icon would have been unthinkable.
Ms Nooyi has unambiguously smashed through the glass ceiling that usually stands between women and the boardroom. That said, the ceiling remains a powerfully effective barrier to advancement. Including Ms Nooyi, there are still only 12 female CEOs in the Fortune 500.
In Britain the situation is worse still. Marjorie Scardino, the chief executive of Pearson, detests being referred to as "the first lady of the FTSE 100", yet seven years after her elevation it still happens to be literally true. There is only one female CEO in the FTSE 100. Counting in chairmen, she's joined by Baroness Hogg at 3i, but that still swells the grand total to just two.
Women do rather better as a percentage of all directors in the FTSE 100 at 10.5 per cent, yet these are predominantly non-executive positions. According to the last published "Female Index" from Cranfield University, only 11 FTSE 100 executive directors are women, an astonishingly small number given how many management positions, both senior and junior, are these days held by women. The boardroom remains a largely male bastion.
One explanation for this is that it is only comparatively recently that women have clambered on to the career ladder, and it will therefore take time for them to show through at the top. The other reason, which I scarcely dare mention for fear of the torrent of hostile e-mails it invariably provokes, is called having babies.
Despite the family-friendly policies of many big organisations, there is little doubt that taking even just a few years out to have children severely upsets career advancement prospects. It's illegal, but many businesses, particularly smaller ones that can ill afford to have staff on prolonged maternity leave, still discriminate on grounds of sex in their employment practices.
Women who rise right to the very top tend as a general rule of thumb either to be through their child-rearing years or to have decided not to have children at all. Both Ms Nooyi and Ms Scardino conform to the first part of this rule. Both have managed to bring up families while relentlessly climbing the corporate ladder, but it is only now that they are grown up that they find the time and the energy for the demands of being top dog.
Nonetheless, Ms Nooyi's success in achieving such high office may indicate that the baby factor is on the wane too. PepsiCo has a particularly high proportion of senior managers who are women, and interestingly has acted as an incubator for a number of other high-powered female CEOs. Yet Pepsi is very much the exception. One reason why there is a much higher proportion of successful female entrepreneurs than top women executives may be that in running their own concerns they are able to set their own rules and bypass the camaraderie of the boys' room.
The other lesson to be drawn from Ms Nooyi's appointment is on the merits of the well-planned succession. That the self-effacing Mr Reinemund would eventually hand the baton to the bubbly Ms Nooyi was never in any doubt. She's long been part of the team that made Pepsi the success it is today, having fully bought into the strategy of diversifying away from high-sugar, carbonated drinks. Indeed, she is perhaps already more associated with this approach than Mr Reinemund. It was she whosuggested the transforming acquisition of Quaker Oats. Mr Reinemund openly admits that, in every respect, she's been like a partner to him, rather than junior.
Contrast this with what recently happened at Pfizer, where, after five inglorious years during which the stock price plunged 40 per cent, the chief executive was forced out in favour of the company's chief attorney. For a big pharmaceuticals company to have a lawyer, rather than a scientist or marketing genius, at the helm is both unexpected and humiliating, though it may say quite a bit about the way this industry is heading.
In any case, there are lessons in this appointment for the two top jobs in corporate Britain which are currently up for grabs - the CEO's mantle at GlaxoSmithKline and BP. Both these companies are run by powerful figures who have achieved great things and would much rather stay than go.
Retirement dates have none the less been set for both of them, even though there is no clear successor in either case. BP has announced its intention of looking externally as well as internally for a replacement, an extraordinary admission of succession planning failure for such a successful company. At least at Glaxo, there is no question but that the successor will come from one of four internal candidates.
Yet in neither case is the handover likely to be smooth. Noses are likely to be put out of joint, key executives who thought they should have got the job will leave, and whoever is chosen will struggle to win the same degree of credibility as his predecessor. Nor, in either case, is there a woman in sight.
Now Ulster TV makes a stab at SMG
The Scottish media group SMG, the owner of Virgin Radio and a couple of commercial TV franchises north of the border, is both leaderless and strategyless, but is it yet at such a low ebb that it needs to accept merger terms on a 50/50 basis with the smaller Ulster Television? In a grudging sort of way, SMG admitted the two sides were talking yesterday, but privately it remains sceptical and dismissive.
The deal would undoubtedly make some kind of industrial sense, with the opportunity for cost savings, particularly in the radio businesses, and greater scale in the commercial TV market. Yet even after the recent precipitous fall in the share price, SMG is substantially the larger company. To agree a merger of equals would amount to a massive giveaway of shareholder value.
After a disastrous diversification spree, SMG has been all at sea for some years now. Yet it was only last month that the chief executive responsible, Andrew Flanagan, was prevailed upon to resign. A ginger group of shareholders led by the media financier David Montgomery has since tried to put in their man, but the efforts have fallen on deaf ears.
SMG needs salvation, of that there is no doubt. Whether Ulster TV is it, looks somewhat questionable.Reuse content