After 12 years at the helm of the multinational food and beverage conglomerate, PepsiCo CEO Indra Nooyi announced on Monday that she would retire from her position in October. Nooyi will be succeeded by Ramon Laguarta, the head of PepsiCo’s Europe and sub-Saharan Africa business, who has been with the company for 22 years. In an interview with the New York Times, the 62-year-old departing CEO said she was stepping down now in part to spend more time with her 86-year-old mother:
“You reach a point where you get tired,” Ms. Nooyi said. “Physically tired. And your family starts to demand more time of you. I’ve reached that point.” Inside PepsiCo, Ms. Nooyi was known for working incredibly long hours — as many as 20 hours a day, often seven days a week. When asked Monday whether she felt that made her a good role model for other women, Ms. Nooyi said, “probably not.”
“But you have to remember when I started working in this corporate world, there were hardly any women in the jobs I was in. At that time, 30 or 40 years ago, expectations for women were unreasonable. We had to produce a better product and do everything much better than the men in order to move ahead,” Ms. Nooyi said.
Nooyi’s departure will leave just 24 women leading S&P 500 companies, according to the non-profit organization Catalyst, though that number will bounce back up to 25 again when Kathy Warden takes up her new post as CEO of Northrop Grumman next January. Other women have stepped down from CEO roles at big companies this year, however, including Denise Morrison of Campbell Soup and Irene Rosenfeld of the snack food maker Mondelez International, so the gender balance of this exclusive club is on a downward trend.
Nooyi has discussed her remarkable path to corporate leadership in a number of interviews, as well as why more women don’t make it to the top. In her view, the dearth of women in the C-suite has less to do with sexist conceptions of what leadership looks like and more to do with a pipeline problem, Vauhini Vara explains at the Atlantic, pointing to an interview she gave on the Freakonomics podcast earlier this year. That’s because the critical point in many professionals’ careers coincides with the time in their lives when they become parents and raise their children—a responsibility that still falls primarily on women:
The imperative to work long, hard hours in order to move ahead competes with responsibilities at home; and something has to give. “How are you going to attract women to the workforce, where we need them, but allow them to balance having a family and taking care of aging parents … and still allow them to contribute productively to the workforce?” she asked. “I don’t have an answer to that. It’s got to be a concerted effort on the part of governments, societies, families, companies—all of us coming together.”
Nooyi’s assessment is backed by evidence. Women make up 44 percent of employees of S&P 500 companies; they also make up 37 percent of first-level and mid-level officials and managers, and 27 percent of executive and senior-level officials and managers. A similar pattern exists in other fields—law, medicine, politics.
Even when women do make it to the top, Times columnist Andrew Ross Sorkin points out, very rarely is one woman CEO at a major company succeeded by a female peer:
There are many explanations for the dearth of the promotion of women to the C-suite: Boards still have fewer women (about 21 percent for the S.&P. 500), a gender pay gap still very much exists, female executive generally still lack the same opportunities to move up the ranks and there are still simply fewer women in upper management at most companies to be promoted.
Among the explanations is one that is particularly counterintuitive and so sensitive that no female chief executives would speak about it on the record. Several female leaders told me privately they hesitate to promote women into senior positions because they are worried that they will be accused of bias. In their view, a man will be heralded for doing so while a woman’s motives might be questioned.
Women CEOs are also less likely to be hired from the outside than from within, Sorkin adds; in an age when boards are more comfortable than they used to be with hiring outsider CEOs, that would appear to put women at a disadvantage. In fact, Nooyi tells Sorkin, she once had a woman in mind to succeed her, but that woman left the company several years ago. At the end of the day, she adds, it’s up to the board, and “we just didn’t have any women who were ready for the job. … What happens in today’s world is that everybody is trying to get high-profile women. So what happens is that we develop these women and other people poach them.”
Another obstacle facing women in corporate leadership is that they are more likely than men to get pushed out by activist investors. This may be because they fail to solve major business challenges they were hired to address, in line with the “glass cliff” theory that women are also more likely to be offered leadership roles at companies in precarious circumstances, which most candidates don’t want to take due to the high risk of failure. Nooyi herself faced a challenge from an activist investor a few years ago, which Jeffrey Sonnenfeld, senior associate dean of leadership programs at the Yale School of Management, describes in an admiring restrospective on Nooyi’s work at Chief Executive:
An example of this is when she proved out her vision to once-skeptical activist investor Nelson Peltz and his firm Trian Partners. In 2013, they bought a stake in PepsiCo and launched a hostile campaign demanding that Frito Lay snacks be divested from Pepsi’s beverage business. They also said the beverage business in North American be divested from the beverage business in the rest of the world. Nooyi believed she could prove her integrated, brand-building vision with intertwined distribution channels, but welcomed a Trian representative to the board and became friends with Peltz. Three years later, Trian sold their holdings for a remarkable 67% gain—a result of Nooyi’s vision.
When it comes to diversity at the pinnacle of corporate America, Nooyi’s loss is doubly felt, as an even smaller club of women of color leading major companies, Julia Carpenter remarks at CNN Money. Carpenter discusses the particularly high barriers to the C-suite facing women of color, which she describes as not so much a glass as a concrete ceiling:
[Ilene Lang, interim president and CEO of Catalyst,] says progress has stalled for women of color in the workplace, particularly in promoting them from mid-level jobs to coveted corner offices. “When you get to the more senior levels, that’s where we still have the ceilings, whether they’re glass ceilings or concrete ceilings,” she says. “Thick layers of men, that’s the problem.”
Part of this stalling, Lang says, comes from risk-averse boards of directors. Some may only appoint a woman or a minority leader in times of intense crisis for the company. But women at lower levels of the organization also need mentors (and, crucially, sponsors) to advocate for them in promotions and negotiations — and those supporters can be hard to find.