Winning the waiting game for women CEOs

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Carly Fiorina didn't appreciate the media hoopla over a "woman CEO" when she was appointed to lead Hewlett-Packard in 1999. Now it's Indra Nooyi's turn at PepsiCo. When will the media stop highlighting women as chief executive officers? When the mix at the top is no longer a novelty.

That could take a long, long time. Ms. Nooyi will be the 11th chief executive officer to run a Fortune 500 company. Even including all Fortune 500 corporate officer positions, America will have to wait 40 years to reach male-female parity if progress for women continues at the same rate as the past decade. Make that 70 years for boardroom parity.

The US shouldn't have to drum its fingers for decades while the top echelons of business catch up with the rest of working America (women make up 46.4 percent of the general workforce, and 50.6 percent of management and professional jobs are held by women).

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Intuitively, it makes sense to bring greater diversity of thought and experience to corporate leadership and greater representation of stakeholder interests, especially in today's global business environment. The post- Enron era also demands a less insular boardroom.

But lest an argument that appeals merely to intuition (a so-called "woman's trait") appear weak, how about some empirical evidence? A 2004 study by Catalyst, the leading researcher of women in the workplace and the source of the above numbers, shows that Fortune 500 companies with the highest percentages of women corporate officers yielded, on average, a 35.1 percent higher return on equity than those with the lowest percentages. And remember, 80 percent of buying decisions are made by women.

But how to move beyond persuasion to actual results? In Europe, Norway's government is imposing quotas. The top 500 publicly traded firms have until 2008 to fill 40 percent of their boardroom seats with women. The majority of Norwegians with a business education are female (the US is not far from that ratio), and the government wants them brought into the fold. France is imposing a 20 percent quota, while Spain may opt for 40 percent.

It's hard to see Congress taking such a heavy-handed role, but US corporations would do well to follow the example of companies making leadership and boardroom diversity a strategic goal, backed by incentives for meeting it. Safeway, the grocery chain, wants its leadership to reflect its customer base, and in 2000 set up a tracking and accountability system to focus on diversity. Since then, the percentage of women at the vice-president level has risen from 12 to 25.

It's going to take such a systematic approach to make gender (and racial) diversity a reality in senior management. And US board members must look beyond their golfing partners or tight circle of CEO friends to widen their mix. That's beginning to happen now as businesses turn increasingly to executive search firms to find women and nonwhites.

A greater effort must also be made to mentor women. With that in mind, let's hope PepsiCo's Nooyi, an Indian-American, sees herself not just as a CEO, but as a role model, actively encouraging and promoting women and people of color.

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