THE BLOG
06/07/2010 12:55 pm ET Updated May 25, 2011

Track Records and Trickle Downs: Will Elected Women Officals Benefit Other Women?

As a corporate shareholder, you can neither deny office to a corporate executive with whom you disagree, nor play a direct part in promoting one with whom you are in tune. All a shareholder can do is communicate her preferences and desires to the corporation's board of directors, which, by law, has exclusive power over appointment and dismissal of corporate officers. Shareholders elect directors; they have no direct say in the appointment of officers.

When corporate officers switch hats, and run for political office, you can -- that is, affect matters directly. You can vote for them as a candidate in a primary election, or in the general election, or both, or you can vote against them. Your vote will have a direct effect. But upon what will you base your vote?

Corporate managers have defined, quantifiable track records. Politicians running for election have track records as well but they are not so well-defined, may be rather mixed or messy, and usually spark endless debate about their comparability. You can, and probably should, seek out and, at least in part, base you vote on these track records.

As CEO 10 years, Meg Whitman and eBay had an astounding record of 40 quarters of increased revenues and increased profits. The share price increased 53 fold while she was in office. As a candidate for governor, Meg Whitman comes with other baggage, such as her illegal receipt of shares in over 100 hot IPOs, indicating a large moral blind spot, and her willing status as a trophy director, serving on far too many public corporation boards (see my blog, "The Would Be Governor From Goldman Sachs," May 4, 2010). Her track record as a corporate manager, however, is exemplary.

By contrast, Carleton Fiorina, who is running for the U.S. Senate, occupied the corner suite at Hewlett-Packard for 6 years (1999-2005). On her "watch," the corporation's record was less than spotty. H-P missed more than several key projections of revenues or profits which Fiorina had made. After an initial honeymoon, the stock price nose dived from the mid 50s to as low as 15.50, and stayed there (see my blog, "Ex CEO Wannabe Politician (Carly Fiorina) Hides Her Spots," May 7, 2010). Fiorina's track record is miserable, although she attempts to dodge the effect by maintaining that her actions set the stage for the remarkable success of Mark Hurd, Fiorina's successor.

With women candidates for office, however, there are other track records which may be of interest. One is the "trickle down" effect. When women have occupied the CEO suite at major corporations, a sometimes byproduct has been an increased number of women on the board of directors. Thus, under CEO Andrea Jung, Avon Products has had 5 women directors. Angela Braly's Wellpoint Corporation has had 5 directors who are female. At Golden West Financial (sold to Wachovia Bank in 2007), CEO Marion Sandler sat on a board with 4 other women, for a total of 5 of 9 directors.

The trickle down effect is well documented. Pepsico's board has 4 women directors. Indra Nooyi is the CEO. Sara Lee has 4 women directors. Brenda Barnes is the CEO. The list goes on but, of course, the list is not too long: only 15 major U.S. corporations have female CEOs.

Let's now look at Fiorina's and Whitman's track records. Under their auspices, neither Hewlett-Packard nor eBay added a single women director, despite each woman having been in office a considerable period of time. H-P had one holdover director who was a woman while eBay had none.

Moreover, Fiorina went out of her way to deny the existence of a glass ceiling, stressing that "a competitive industry cannot afford sexism," as well as denying any other impediment to women in business. On the Today Show, Fiorina proclaimed that gender had never held her back, "I have spent a lifetime believing that what is most important is what's inside the package." Ms. Fiorina pointedly refused to accept the title "role model for women." Post H-P, in her 2007 autobiography, Tough Choices, Ms. Fiorina sings a strikingly different tune. According to her, she encountered sexism at every turn of her career and all, or most all, of her many failures are attributed to sexism toward her and her programs.

The other source of track record information is the proxy data. Annual proxy statements corporations file with the SEC must list the 5 highest paid executives. Seven of the 15 corporations with female CEOs have at least one other woman among the top 5 executives (Avon, BJ's Wholesale Clubs, Reynolds America, Sunoco, Wellpoint, Sunoco, Xerox, and Yahoo) while 8 do not (ADM, Dupont, Kraft, Pepsico, Rite Aid, Sara Lee, TJX Cos., and Western Union). Among the latter, save for the female CEO, all the other top executives are men.

At eBay the evidence is inconclusive. The proxy statement lists Lorrie Norrington, Vice-president eBay Marketplace, among the 5 highest paid executives. It is unclear whether Ms. Norrington attained that position under Meg Whitman or under Whitman's successor, John Donahoe.

Candidate Firoina's record here is just as atrocious as her record with respect to selection of directors. There is no evidence that Fiorina promoted or attempted to promote any women to senior management during Fiorina's 6 year tenure at Hewlett Packard.

Women voters may well find of interest female candidate's track records with respect to hiring, promotion and mentoring of other women in business. With female candidates who have been corporate CEOs, those records, while not comprehensive, do provide some basis for decisions on that score and, possibly, for voting on election day.