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IBM's choice of woman as CEO historic

SAN FRANCISCO — IBM Corp. has passed a milestone, naming the first female CEO in the company's 100-year history.

The selection of Virginia "Ginni" Rometty, announced Tuesday, is also a statement about the growing influence of women in the top tiers of business. Although women have made momentous strides, breaking through corporate America's "glass ceiling" over the past half century, a woman's ascendance into the chief executive position of a major corporation still holds significance. Currently, only 16 Fortune 500 companies are led by a woman; Rometty will be the 17th when her appointment takes effect Jan. 1.

Even so, two of the world's biggest technology companies will have female leaders. Last month, Hewlett-Packard named Meg Whitman, former eBay chief and candidate for California governor, as its CEO.

Their appointments are "setting a fabulous example" in the promotion of female executives, said Jean Bozman, an analyst with IDC who has followed IBM and HP closely for years.

Rometty, 54, IBM's sales and marketing chief, is taking over from Sam Palmisano, who this year turned 60, the age at which IBM CEOs have traditionally stepped down.

HP, of course, had another female CEO, Carly Fiorina, but her tenure ended in acrimony when she was forced out in 2005 over disappointing financials and the fallout from her hard-fought battle to buy Compaq Computer.

HP and IBM are bitter rivals that have followed somewhat inverted paths for years.

When IBM was near collapse two decades ago with the eroding dominance of its mainframes, HP thrived with the advent of personal computing and Silicon Valley's dot-com boom. Now the tables are turned — IBM is thriving while HP is hurting.

IBM, based in Armonk, N.Y., has proved resilient in the downturn because of hard decisions it made in the 1990s to focus on the high-margin areas of software and technology services, moving away from computer hardware. Rometty played a leading role in the transformation.

She was instrumental in the formation of IBM's business services division, including overseeing IBM's $3.5 billion purchase of PricewaterhouseCoopers' consulting business in 2002, which is a key element of a strategy that has made IBM a heavily copied company. Rometty joined IBM in 1981 as an engineer.

She is "more than a superb operational executive," Palmisano, who will remain chairman, said in a statement.

IBM's stock has more than doubled since the depth of the recession in 2008. Meanwhile, HP stock has fallen by about 50 percent.

A series of scandals has led to turmoil at the top of HP, with former CEO Mark Hurd resigning under pressure last year over ethical violations, and his successor, Leo Apotheker, being fired after less than a year on the job after fumbling an important restructuring.

One of Whitman's first moves was to accelerate a decision about whether HP will sell, spin off or keep its personal computer business, the largest in the world by sales. Investors seem undecided about what course they want HP to take.

Analysts have generally said that both women are right for their roles — HP needs Whitman's star power to woo Wall Street while IBM needs a steady operator with broad experience like Rometty to continue IBM's predictable, steady growth.

IBM's choice of woman as CEO historic 10/26/11 [Last modified: Wednesday, October 26, 2011 8:52pm]
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