When an announcement came in late November that Lauren Hobart would take the reins as chief executive at Dick’s Sporting Goods in early 2021, corporate America hit another major milestone for inclusivity that has been driven, in large part, by the retail industry.
A record 41 female CEOs are soon going to be leading Fortune 500 companies, barring any additional appointments or departures, as Hobart takes over for current Dick’s CEO Ed Stack in February. Ten will be in charge of retailers.
Recruiters and consultants say consumer-facing companies are coming to the realization that they need a leader at the top who understands the American consumer, and that most people driving purchase decisions in households are women.
Hobart will join a list that includes Kohl’s CEO Michelle Gass, Gap CEO Sonia Syngal, Best Buy CEO Corie Barry, and incoming CVS Health CEO Karen Lynch, who is set to take over for Larry Merlo in Feb. 1.
“There’s definitely intentionality,” said Lorraine Hariton, CEO of Catalyst, which promotes the advancement of women in the workplace. “More and more companies are trying to mirror their customers.”
“In order for someone to become a CEO of a Fortune 500 company, in many cases, they work their way up within the organization,” Hariton said, citing Best Buy’s Barry as one example. She joined the electronics retailer in 1999 and rose through the ranks to become chief financial officer, a position she held for a little more than four years, before becoming CEO in June 2019.
The upheaval that many retailers are facing as rapid e-commerce growth reshapes the industry has also presented an opportunity for some companies to shake things up and select a female CEO, recruiters say. The so-called glass cliff is not a new phenomenon. It refers to women being put into leadership roles during periods of crisis or downturn.
“Retail has also had a lot of change,” Hariton said. Some companies might be looking to bring in someone “from the outside, with different spirits,” she said. “Women tend to be socialized to have more empathy, and more collaboration — interpersonal skills that are really important characteristics.”
J.C. Penney CEO Jill Soltau took over in 2018, as the crippled department store chain was posting quarter after quarter of losses and closing hundreds of stores. She’s in the midst of navigating Penney out of Chapter 11 bankruptcy. To be successful, she will need to woo shoppers back to Penney’s stores to buy apparel at a time when clothing sales are down.
Tapestry CEO Joanne Crevoiserat, another example, took over the leadership position earlier this year, after former chief Jide Zeitlin resigned amid accusations from a woman that he had posed as a photographer more than a decade ago.
With some of the recent CEO appointments, though, companies are simply finding talented women who have been rising up the leadership ranks for years, according to Elizabeth Stephenson, a managing director in the consumer products practice at AlixPartners.
“Over the cycles of time, there’s been a real realization about putting women into the right developmental experiences to prepare them to be in those CEO roles,” she said. “And I think you’re seeing that virtuous cycle come to a head.”
There’s also been a push to get more women into boardrooms. Nasdaq submitted a proposal earlier this month to require the more than 3,000 companies listed on its stock exchange to improve boardroom diversity — by appointing at least one woman, and at least one minority or LGBTQ person, to their boards. If approved by the SEC, the new rules would require all companies listed on Nasdaq’s U.S. exchange to publicly disclose their diversity statistics.
The retail industry has the largest percentage of female board members, 32.8%, according to the annual Crist|Kolder Volatility Report, which tracks executive moves at S&P 500 and Fortune 500 companies. That’s better than the female representation at boards of financial companies, at 26.5%, and technology, at 25.8%, Crist|Kolder found.
Women can be a “secret weapon” in boardrooms, said Katherine Black, partner in the consumer practice of Kearney, a global management consulting firm. Prior to her job in consulting, Black was a retail executive at both Macy’s and Kroger.
“In some cases, not having as intricate networks in certain places, sort of the old boys club,” can be a disadvantage for female leaders, she said.
But, that can be seen as a key advantage when a retailer is going through a turnaround, Black said, “because typically that’s requiring someone to think about something in a really fresh and different way, and to be willing to do something different and move away from the norm.”
It’s worth noting that the number of women leading the largest U.S. companies is still modest. More progress is expected to be made in the coming years, perhaps still driven by retailers.
“There will continue to be an acceleration of women into these top leadership roles and as it relates to retail, I think we potentially may see even more of it in that there is so much transformation happening in retail right now,” Catalyst’s Hariton said.
“When you’re able to source broadly, not just within your organization, and you go beyond hiring from within, that gives you an opportunity to look at more diverse candidates and look for women candidates. With the turmoil in retail, we may continue to see it outperforming in terms of bringing women in.”