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Saturday, August 30, 2008

The World's Most Powerful Women

Our annual ranking of the most powerful women in the world measures "power" as a composite of public profile--calculated using press mentions--and financial heft. The economic component of the ranking considers job title and past career accomplishments, as well as the amount of money the woman controls.

A chief executive "controls" the revenue of her business, for instance, while a head of state gets the country's gross domestic product. The raw numbers are modified to allow comparisons across financial realms.

For the third year running Germany's chancellor, Angela Merkel, is the world's most powerful woman. U.S. Sen. Hillary Clinton (overall rank: 28) is the woman with the highest public profile, resulting from the intense media scrutiny of her failed presidential bid.

Hopeful signs for women: Our fifth annual ranking showcases women who have beat out men for top posts this year, including Lynn Laverty Elsenhans (No. 39), the new chief of Sunoco; Gail Kelly (No. 11), who heads Australian bank Westpac; and Jane Mendillo (No. 42), who was just named to run the $35 billion Harvard University endowment.

In total, the women ranked on this list control $26 trillion worldwide.

The tenuous state of the world economy, however, has many of the world's most powerful women in the same precarious positions as their male peers. Economic woes this year have already claimed the jobs of Patricia Russo, who headed the troubled Alcatel Lucent (nyse: ALU - news - people ), and Zoe Cruz, former president of Morgan Stanley (nyse: MS - news - people ). Other highly placed women could be in jeopardy as well.

But while individual female leaders continue to climb higher, women as a group are making only modest gains. Women have hovered for a decade around 46% of the American labor force, but they hold only 15% of top corporate jobs; less than 3% of the country's biggest companies have female chief executives, according to research nonprofit Catalyst.

The most powerful woman in the world, German Chancellor Angela Merkel, tops the list for the third year running as the ranking democratically elected female leader. Sheila Bair, head of the Federal Deposit Insurance Corp., the embattled U.S. bank-deposit insurer, debuts in second place as she tries to stave off financial panic amid a worldwide credit crisis.

At No. 3, Indra Nooyi of PepsiCo (nyse: PEP - news - people ) is the highest-ranked woman in business as she expands the food and beverage giant internationally to counter a decline in Americans' preference for soda and chips.

Angela Braly (No. 4), the head of big health insurer WellPoint (nyse: WLP - news - people ), suffered a setback this spring when her downward revision of financial forecasts caused a stock tumble, sparking investor and employee ire.

At No. 5, Cynthia Carroll is leading mining giant Anglo-American to riches in the commodities boom. Kraft (nyse: KFT - news - people ) chief Irene Rosenfeld (No. 6), is slowly turning around the mac 'n cheese maker in her second year on the job, scoring a big hit in China with a new Oreo.

In the last few months of her tenure, U.S. Secretary of State Condoleezza Rice (No. 7) faces a myriad of diplomatic flare-ups: an unstable Pakistan, a bellicose Russia and the long-smoldering Middle East peace question. Ho Ching (No. 8), the head of Singaporean sovereign wealth fund Temasek, has been moving more of the city-state's money abroad and now owns 15% of Merrill Lynch (nyse: MER - news - people ).

In France, Areva (other-otc: ARVCF.PK - news - people ) head Anne Lauvergeon (No. 9) has been dealing with public fallout from this summer's leaks at two nuclear plants, even as France has announced plans to build more. Anne Mulcahy (No. 10) has doubled her research and development budget to focus on color printing and eco-friendly technologies.

These women top a far-flung list that comprises 54 businesswomen and 23 politicians, with the rest being media execs and personalities and nonprofit leaders. A third are newcomers to the rankings; this reflects not only new top positions for women, such as Starcom MediaVest's Laura Desmond (No. 55) and Enterprise's Pamela Nicholson (No. 93), but also the increasingly global reach of this list, with more women from outside the U.S. rising to worldwide prominence.

Just under half the women ranked this year are based outside of the U.S. Top countries represented include the U.K. (five women), China (four), France, India and the Netherlands (three apiece). Morocco has its first ranked woman this year: Hynd Bouhia (No. 29), director-general of the Casablanca Stock Exchange.

Candidates for our list are globally recognized women at the top of their fields: chief executives and their highest-ranked lieutenants, elected officials, nonprofit leaders. They don't have to be rich, but they do have to wield significant influence. This year, an architect, a war correspondent and several foundation executives all won spots on the list.

We measure power as a composite of public profile--calculated using press mentions--and financial heft. This year, for instance, the woman with the highest public profile is Sen. Hillary Rodham Clinton, No. 28, who garnered intense media scrutiny for her failed U.S. presidential bid.

The economic component of the ranking considers job title and past career accomplishments, as well as the amount of money a woman controls. A chief executive gets the revenue of her business, for example, while a Nobel winner receives her prize money and a U.N. agency head receives her organization's budget. We modify the raw dollar figures to allow comparisons among the different financial realms so that the corporate revenue that an executive controls, for instance, is on the same footing as a country's gross domestic product, ascribed to prime ministers.

Rank :

#1 Angela Merkel
Chancellor
Germany



With $3.3 trillion in GDP, Germany is Europe's biggest economy, and Merkel's reforms are sparking a rebound, with unemployment falling (although consumer confidence just hit a five-year low). She pushed through a later retirement age, put more women in senior government posts, and raised payments to new parents. Bulldozes through controversy: hosted the Dalai Lama, chastised Mugabe, and wants to make the euro a bigger player in global financial markets as the dollar wanes. Also trying to make Germany more eco-friendly with steep greenhouse-gas cuts. Europeans voted her their most influential politician. — Tatiana Serafin


#2 Sheila C. Bair
Chairman, Federal Deposit Insurance Corp.
U.S.



The head of the embattled FDIC has been trying to reassure an edgy American public that the country's financial institutions are sound—even as six banks have now failed this year. Bair's domain is the last stop for capital-starved banks (and their insured customers) before going under. But the July demise of IndyMac, the largest bankruptcy of a financial institution in the last two decades, has rattled nerves. As banks continue to fail, Bair must continue to show the fortitude that has helped her lead an institution that is suddenly an actor in this global drama. — Heidi Brown


#3 Indra K. Nooyi
Chairman, chief executive, PepsiCo
U.S.



Nooyi continues to grow PepsiCo, the $39 billion food and beverage giant, through new product offerings and acquisitions. Company subsidiaries Quaker, Gatorade and FritoLay introduced a new line of whole-grain oatmeal and granola bars called Simple Harvest, and G2, a low-calorie "lifestyle beverage" for athletes. Nooyi orchestrated a major expansion into international markets, most notably with a $1.4 billion acquisition of a 75% stake in Russian juice giant Lebedyansky. — Kate Macmillan


#4 Angela Braly
Chief executive, president, WellPoint
U.S.



Named CEO in June 2007, Braly crashed through health insurance's glass ceiling but still earned $26 million less last year than her male predecessor. The St. Louis attorney helped Missouri's Blue Cross convert from a nonprofit into an investor-owned company in 1994. Made the leap to WellPoint when the company acquired Blue Cross in 2001. The 35-million-member insurer revised its forecasts in March after reporting more claims than expected. Now facing wrath from employees who lost an estimated $100 million from their 401(k)s when company shares swooned 39% in March. — Emily Schmall


#5 Cynthia Carroll
Chief executive, Anglo American
U.K.



The commodities boom means big money for Carroll. The Skidmore College geology major started her career with Amoco in 1981. Spent 17 years at aluminum company Alcan. In 2006, became the first woman and first non-South African to lead Anglo American, the mining giant founded by Ernest Oppenheimer in 1917. Completed $5.5 billion iron ore deal in Brazil. Recently appointed to the board of BP. — Emily Schmall


#6 Irene B. Rosenfeld
Chairman, chief executive, Kraft Foods
U.S.



Rosenfeld was tapped in 2006 to helm Kraft. The first two years have been somewhat sticky, but Rosenfeld's three-year turnaround plan is showing some teeth. Last year Kraft delivered its best revenue growth since 2001, up 21% to $10.4 billion. Profits aren't yet up to par, but Rosenfeld, who holds a Ph.D. in marketing, plans to tackle those margins with higher prices, smaller portions and some surprising new gimmicks. The company's reformulation of the Oreo cookie with less sugar and a long, thin shape was a hit in China, raking in over $1 billion in sales last year. — Devon Pendleton


#7 Condoleezza Rice
Secretary of state
U.S.



Shoring up her legacy before the Bush administration leaves office, Rice continues to try for peace in the Middle East; the U.S. is cautiously engaging North Korea and trying to contain Iran. But her efforts are coming to naught around the world: In Pakistan, U.S. support for anti-al-Qaida ally Pervez Musharraf, who resigned, may have jeopardized ties with his successor; Russia is growing more autocratic; and her State Department has come under fire for its lax oversight of contractor Blackwater. Successes: ties with Japan, China and India have solidified. — Tatiana Serafin


#8 Ho Ching
Chief executive, Temasek Holdings
Singapore



The wife of the prime minister of Singapore, Ho Ching has been credited with converting Temasek from a Singapore-focused firm to a leading investor in Asia. She earned accolades by making investments in Indian and Chinese telecoms and banks, and as a result, brought the portfolio to roughly $100 billion. Temasek has bought a 15% stake in Merrill Lynch since last December in the wake of the bank's write-downs. Another deal, Temasek's tax-free takeover of Shin Corp., one of Thailand's biggest telecom companies, sparked a wave of protests. The tax-free deal eventually led to the overthrow of Thailand's prime minister. — Megha Bahree


#9 Anne Lauvergeon
Chief executive, Areva
France



Lauvergeon has seen her leadership tested this year with two leaks of nuclear fuel in France this summer—one of which tainted drinking water in the southeastern town where it occurred. The incidents raised renewed questions about the safety of nuclear power. It's tough timing for Areva—and many hard-pressed governments around the world—as energy prices had spurred a new look at nuclear power. Although she enjoys the public backing of French President Nicolas Sarkozy, Lauvergeon's fate as chief executive may well hinge on her ability to quell fears about the fear of nuclear disaster. — Heidi Brown


#10 Anne Mulcahy
Chairman, chief executive, Xerox Corp.
U.S



Mulcahy, credited with pulling iconic copier manufacturer from the brink of financial collapse, is still winning praise for her remarkable turnaround effort. In June she became the first woman to be named by her peers as Chief Executive of the Year, an honor previously bestowed on the likes of Bill Gates and Jack Welch. But don't look for Long Island, N.Y., native Mulcahy to rest on any laurels. To fend off rivals Canon and Hewlett-Packard, she's doubled the software R&D budget to $1.5 billion and focused research efforts on color printing and eco-friendly technologies. — Devon Pendleton

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