Room at the top?
Women have moved into senior ranks at state’s largest public companies. But no one has ascended the CEO throne, yet.

by Marjolijn Bijlefeld
For Virginia Business
August 2005

At 39, Fiona Dias has cracked the ranks of senior management at consumer electronics retailer Circuit City, serving at its chief marketing officer and president of Circuit City Direct. That’s a new division the Richmond-based company started in 2003 to handle the company’s Web site, telephone sales and relationships with business customers. Dias has powerful credentials — an undergraduate degree from Harvard, an MBA from Stanford and marketing management experience with internationally recognized brands such as Frito-Lay and Pennzoil. Yet, she’s quick to acknowledge that women of earlier generations helped clear the path for her ascent. “The women of the ‘70s had to bust through the glass ceilings and the cement walls. It’s been easier for me” she says, “because they took the hard knocks.”

Dias, a senior vice president, is among Virginia’s highest-ranked businesswomen. She earns a salary of $375,000 a year, according to a recent Circuit City proxy, and enjoys other perks such as a bonus and performance-based stock awards. In public companies across Virginia, women like her have moved into executive positions, managing billions of dollars worth of business and thousands of employees. At Freddie Mac in McLean, for example, Executive Vice President Patricia L. Cook manages a $668 billion mortgage portfolio. Upon joining the company in 2004, she received a one-time, cash sign-on bonus of $2 million. Over at nearby Capital One Financial Corp., Catherine West runs U.S. Card, the credit-card giant’s largest line of business. Last year, she earned a salary of $420,000 and a bonus of $637,228.

While women are clearly moving up in Virginia’s corporate world, they’re yet to capture the plum CEO job at any of the state’s 18 Fortune 500s or at its other large public companies. Indeed, only nine of the country’s Fortune 500 CEOs are women. “That’s rarified air,” says Dias. “But just one rung below, there are quite a few women in those spots.” Dias would like to be a CEO one day, but perhaps for a smaller firm or a privately held company. “Public corporations are extremely demanding with thousands of shareholders all pulling at you. It’s a 24/7 job. Right now, I’m watching from a distance to see if I can discover more pros than cons.”

While women have progressed since entering the work force in large numbers in the 1970s and ’80s, they’re only about halfway to the highest business pinnacles, says West. “We have to get to a place where women have equal stature — CEO positions, board positions.” (For more on West, see her profile on page 14.) While Dias has broken through the boardroom barrier as well, serving as a director at Maryland-based Choice Hotels International Inc., women hold fewer than 14 percent of the board seats at Fortune 500 companies.

Some women, though, have decided that the fast-paced corporate life is not for them, opting instead to be their own boss by starting a business. In fact, women have at least a 50 percent ownership stake in nearly 46 percent of all privately held firms in the state (and 48 percent in the U.S.). Between 1997 and 2004, the number of women-owned firms grew by 17 percent, twice the rate of all privately held firms.

This increase in company ownerships is one of the statistics indicating the critical mass women have reached in business. Additionally, women’s credentials are becoming increasingly competitive. About five years ago, the scales tipped as the number of women in U.S. colleges surpassed the number of men. Already, women hold nearly 33 percent of the state’s managerial jobs and 48 percent of its professional positions. By 2012, it’s projected that women will earn nearly 57 percent of all advanced degrees in the U.S., according to the National Center for Education Statistics. That means more women than men will be graduating from law schools, medical schools and business schools, creating a pipeline of leadership talent.

In Virginia, Richard E. Wokutch, professor and department head of management at Virginia Tech’s Pamplin College of Business, has noticed the change in the numbers. When he started graduate school in 1972, there were two or three women students in a class of about 100. Now, women account for nearly half of the students in both his undergraduate MBA and executive level MBA classes. As they graduate and gain work and management experience, the number of women in upper echelons of business management should rise as well. “If that doesn’t happen, then we need to start looking at whether there are institutional barriers that are preventing women from advancing,” he says. Approaching any kind of parity in CEO ranks, however, could take years. “There are only so many CEO positions — the same number of positions as there are companies. The competition to get there is very intensive,” adds Wokutch.

Another sign that Virginia’s women are doing well: Ten of the state’s 35 four-year colleges and universities, or 28 percent, are headed by women presidents, a job some say is tantamount to running a company.
One of those women is Old Dominion University President Roseann Runte. She remembers answering the phone in the president’s office at a Nova Scotia university in 1983. Callers “would insist that the president be put on the phone — that I put him on the phone.” She would explain that she was the president, the only woman in Canada to hold that position at a co-ed school. At ODU, she leads a university with nearly 21,000 undergraduate and graduate students and nearly 600 faculty members.

While women have moved into leadership roles, challenges remain. Although women account for nearly 47 percent of Virginia’s work force, they disproportionately hold more lower-paying jobs than men — 80 percent of the state’s office and clerical jobs and 57 percent of the service occupations. The ratios are even more skewed for minority women. Yet minority women with college degrees are earning more than white women with similar educations, according to a March report issued by the U.S. Census Bureau. Still, the earnings of college-educated women, which range from just under $38,000 to just over $41,000, pale in comparison to the wages for college-educated white men, who earn an average of $66,000.

Among the states, Virginia ranks eighth in women’s earnings — with an average of $32,400, or 78 percent of the earnings of men with full-time, year-round jobs, according to the Institute for Women’s Policy Research in Washington, D.C. African-American and Hispanic women have lower average earnings, at $26,500 and $25,300, respectively.

For women who strike out on their own, the challenge isn’t only pay. Instead, they face hurdles in obtaining financing from lenders skittish about high-risk, first-time businesses. Amy Nichols, president and CEO of Happy Tails dog spa in Vienna, had money from the sale of a house and backing from the Small Business Association, so she figured financing would be easy. “I went to seven banks before I got approval for a loan,” she recalls. Since opening her 9,000-square-foot dog spa at Tysons Corner in 2002, Nichols says business has been so successful that she invested $150,000 of her profits last year to start a franchise operation.

Even those who have reached high levels in business say that, while gender issues don’t come up often, they still exist. Eva S. Hardy, senior vice president for external affairs and corporate communications at Dominion Resources Inc. in Richmond notes, for in-stance, that as-sertiveness is generally ad-mired in a man, but not in a woman. Hardy is a lobbyist for the power company, an area of work that until a decade ago was the quintessential old boys’ network. But as more women run PR and lobbying firms that has changed, too. Women — whom Hardy describes as naturally able to handle multiple tasks — approach issues differently. And the two approaches “help us have a diverse universe,” she says.

Trying to analyze the progress of women in the workplace is like trying to undo a complicated knot. No one string unravels the knot. For example, while child care remains predominantly in the purview of women, it is by no means theirs exclusively. Today’s Gen-X fathers spend about 3.3 hours per workday on household chores and taking care of children, more than the 2.2 hours per day spent by fathers of the baby boom generation, according to the New York-based Families and Work Institute.

Still, child-care issues — and a lack of benefits that frequently come with pared-down, part-time schedules favored by some working parents — play a role in holding back women’s progress, says Lois Backon, an institute vice president. “Is the glass ceiling being broken? No, not exactly, and it’s child-care issues and part-time issues that are causing women not to want to climb the ladder.”

One pressure that has faded in recent years is the psychological burden of needing to succeed lest women play into expectations that they can’t do the work. These days that energy is better spent mentoring young men and women so they have a realistic sense of career expectations. “Even if you’re very good, that doesn’t guarantee you’re going to make it to the top,” says Hardy. “There are issues about your style of working, such as whether you’re good on a team, your ability to anticipate requirements, and your knowledge of the culture of a company. The bottom line — whether you’re a woman or a man — is that you have to be good at what you do, and your instincts have to be good to tailor your style to the culture of the organization.”

Advancing up the corporate ladder requires sacrifices. The pressures are intense and candidates for top slots are competing against others who have proved their mettle. “It’s difficult for anyone to reach above middle management, so that gets frustrating after 15 years,” says Penny Pompei, president and CEO of the National Women’s Bus-iness Center. That may be a primary reason why women — particularly those of color — are starting businesses. The center, based in Washington, D.C., trains and counsels potential entrepreneurs. Despite the name, about 20 percent of its clients are men. Many of them are mid-life professionals who can’t punch through the ceiling to top levels, and they’re ready to try something new. But women are typically more willing to take a bigger leap. “Men who are CPAs might decide to open a financial planning firm but they wouldn’t open a coffee shop,” says Pompei. With increasing access to capital, women are more willing to take risks than they were a decade or more ago.

Kathleen Webb of Sterling falls into that category. A telecom worker during that industry’s fast and furious ride between 1980 and 1993, she decided the pace was incompatible with raising three children. In February 1993, Webb started HomeWork Solutions, a payroll business that helps employers of domestic workers, such as nannies, stay in compliance with federal laws. Five years later, HomeWork Solutions added 4nannies.com, an online service that matches families with nannies. Using the online service, potential employers can list a variety of job requirements, while nannies can fill out applications and provide details about their backgrounds. For a fee ranging from $250 to $400, families receive lists of prospective nannies and can interview them if they desire.

The online company has a staff of nine — all women. Webb’s partner, however, is Alan Heilbron, who left a career at accounting firm Arthur Andersen to start a small business. As a divorced father of two children, he wanted to be able to spend more time with his kids. Webb expects more men and women to choose similar paths. “As your priorities change, you have to listen to determine what you find fulfilling … for me, the sea change was when my children were in school. When they were small, I could handle work with a full-time nanny, but when I needed to schedule in the school field trip, the plays, sports and homework, it progressively became more difficult.” Now she feels like she has it all — and more. “I used to follow the rules; now I can write them,” she says.

Women don’t necessarily have to leave established paths to rewrite some of the rules, observes Runte. She recalls her early days in Nova Scotia when the university’s athletic director grumbled that the school would lose one of its best traditions — the annual alumni/administration ice hockey tournament — because it was unlikely Runte knew how to play. She strapped on her figure skates and after one short coaching session with a faculty friend, felt she’d fail miserably. “I realized I would probably get my nose broken and that there was no way I could help my team win.” So she came up with a different plan.

On the night of the tournament, she skated out in a tuxedo. As the audience grew silent, she moved to the opposing goalie and proceeded to tie him up with a series of scarves she pulled out of her sleeve. After her 15-minute penalty was up and Runte was back on the ice, she literally pulled a rabbit out of her top hat and earned a standing ovation for her moxie. Ever since then, the annual competition has included more pranks and fun. “I thought I had to be able to do everything a man could do, in the way that men did it. As I went along, I learned I could have strength in different ways. If you can’t win by the rules that are written,” she says, “you change the rules.”

These days more women and men are creating their own rulebooks. As they determine what they want from their careers and their lives, they also are writing the plays. Circuit City’s Dias, for example, hopes that after her corporate career, she can become more involved in conservation and animal welfare. “A lot of people translate that athletic analogy of winning a game to corporate life,” she says. “Sure that’s a short-term win, but there’s a bigger game to win.”