Peter Löscher, CEO, Siemens AG - Building Gender Balanced Business

EXECUTIVE SUMMARY

1. Peter Löscher, CEO of Siemens AG, is transforming the culture of the German engineering and electronics giant from the very top
2. His aim is to create a more diverse leadership that better reflects the company’s wider employee base and range of consumers
3. He is also committed to the advancement of women
4. Two recent decisions have shown that the commitment starts at the very top:
5. First, Jill Lee, a CFO in the very important Asia region, has been appointed as the company’s first ever Chief Diversity Officer
6. Second, Peter Löscher has recruited Barbara Kux onto the company’s Managing Board, the first appointment of a woman at this level in the company’s 161 year history

Peter Löscher, CEO of Siemens AG, the 161-year old German engineering and electronics giant revealed his commitment to diversity and the advancement of women by taking two decisions that are unprecedented for the organisation.

First, at the end of October 2008 the company announced the appointment of the first ever Chief Diversity Officer at Siemens AG. The role is clearly a powerful one. This is indicated by the fact that the candidate chosen is an extremely important high-flier, who should carry enormous weight in the organisation. Jill Lee will be a member of the Corporate Executive Development Department, which will report directly to the CEO and will be responsible for making sure that the top ranks of the company reflect the diversity of its whole employee base as well as its consumers.

Lee has worked for Siemens since the mid-1980s, rising to become Chief Financial Officer for Siemens in the Northeastern Asian region which embraces the People’s Republic of China, Korea, Hong Kong and Taiwan.

Rapid urbanisation in such expanding economies as China’s has driven and will continue to drive high demand for Siemens’s products in its industry and energy businesses.

Recently, Löscher had to report a net loss of €2.4 billion in the fourth quarter of fiscal year 2008. However, he has maintained that the company can still reach its target for the year 2009 of sales of between €8 billion and €8.5 billion in its core businesses of energy, industry and healthcare products.

This commitment to growth amidst economic malaise around the world underlines the importance of emerging economies in Asia and elsewhere to companies such as Siemens and shows how significant Lee’s role has been. In choosing Lee to be his Chief Diversity Officer rather than keep her her in the Asia region where she has built up years of knowledge and experience, Löscher is showing the level of his commitment to the goal of transforming Siemens into a more multicultural and diverse company.

“We want to make even better use of the talent in the company worldwide. In a few years time the international composition and variety of our customer base and our younger employees should also be reflected in our top management. Jill Lee has been appointed to foster this development,” Löscher said at the time of the appointment.

In November, in a second radical move, Löscher appointed Barbara Kux onto the Managing Board, making this the first time in 161 years that Siemens AG has appointed a woman to the Governing Body. It also makes Siemens the only company on the DAX 30 (the stock market index consisting of 30 major German companies trading on the Frankfurt Stock Exchange) which has a woman on its board. Kux was Chief Procurement Officer at Philips. At Siemens she will be responsible for the supply chain management side of the business and all its global procurement.

In 2007, Löscher was appointed CEO to clean up the company following the bribery scandal that had come to light the previous year, as well as transform the company into a more efficient and competitive organisation.

To achieve the former, Löscher has replaced many of the previous directors on the supervisory board and management board and brought in new people at the top management levels. He has also reduced the company’s eight businesses to the three core ones of energy, healthcare and industry to make it more streamlined and focused.

More recently, he has announced a decision to reduce the headcount at the 400,000 employee organisation by 4% to achieve further efficiencies. So, the decision to appoint someone to join the board at this critical time and oversee the supply chain and procurement operations could not have been a more critical one. If managed well, this will contribute to the company’s ability to maintain efficiency across the world and make cost savings. So, the choice of who to appoint to this task was obviously critical.

Undoubtedly, Kux has all the experience and talent to warrant the appointment. At the same time, however, Löscher is making a deliberate statement of his commitment to advancing female talent and adding to the diversity at the top by appointing her. He wants other women to know that this once male preserve is now open to women.

“The first appointment of a woman to the Managing Board,” Löscher stated recently, “underscores the fact that we at Siemens want more women in top management positions and offer them outstanding career opportunities with our company.”