GSK's Emma Walmsley to be most powerful female FTSE 100 chief

GlaxoSmithKline yesterday named Emma Walmsley, 47, its chief executive designate. She'll take over from Sir Andrew Witty when he retires next March.

Is that significant?

The person chosen to be the new boss of the UK's largest drug company - and third-largest listed company overall - is always newsworthy. In this case it has garnered a few more headlines than it might, sadly, because Walmsley is a woman.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

Why does that matter?

It's obviously positive when big companies are gender-blind when choosing executives – which most people probably assume they are.

Unfortunately, that's not borne out by the statistics. The new GSK boss will be one of seven women at the helm of a FTSE 100 firm - the same number as there are of men called David, The Times reports.

Walmsley will immediately become the most powerful woman in corporate Britain, with GSK's £80bn valuation more than double the next largest female-run firm.

That's all a bit depressing

It is, but hopefully her appointment is a sign that things are changing.

The 30% Club, which launched in 2010 with a goal of achieving a minimum of 30 per cent of women on FTSE 100 boards, said the figure has already more than doubled to 26 per cent since it was formed. That's more than the equivalent rates in the US, Australia or Hong Kong. It is hoped the next generation of female chief executives will flow from these ranks.

What do investors think?

It's actually quite controversial – but that has nothing to do with gender. "Glaxo has snubbed some of its most vocal shareholders," says the Times's Alistair Osborne, "not least Neil Woodford."

Those investors have been agitating for a break-up of GSK, adds Ben Wright in the Daily Telegraph, starting with the global consumer healthcare business that Walmsley herself has run for the past five years. To this end they wanted an outsider appointed to shake things up.

The consumer business is responsible for brands such as Sensodyne toothpaste, Horlicks malted drinks and Panadol painkillers and has been a key area of focus during Witty's tenure, amassing revenue of £6bn.

Why is that a problem?

Some say GSK has lost its focus on big drug discovery – and it's true that since the turn of the century, the company has slipped from first to eighth in the list of largest drug developers in the world. For some time its share price, while up around 25 per cent in recent years, lagged its closest rivals.

Those backers want GSK split perhaps into four divisions, with Walmsley's, which was formed from a complex merger with Novartis in 2011, the first to go. This appointment suggests they'll be disappointed.

There are those who believe this might ultimately be for the best, however. Big pharma is going through a period of unprecedented change and those low-margin, high-volume consumer staples are beginning to bear fruit for GSK, whose shares have outperformed peers in the past year.

So GSK has opted for the status quo?

That's what many assume – but the Financial Times cautions against reading too much into Walmsley's background. She has been on the executive committee for the past half-decade and so is no stranger to the drugs side of the business, said a source.

The source added it would be a "misreading" to assume Walmsley is irrevocably committed to GSK’s diversified business model, saying she will instead be "driven by value creation".