Bloomberg News

CEOs Praising Diversity Stay Silent on No-Women Augusta

April 09, 2012

Virginia “Ginni” Rometty, chief executive officer of International Business Machines Corp., applauds while watching the fourth round of the Masters golf tournament from the gallery on the 18th green Sunday, April 8, 2012, in Augusta. Photographer: Chris O'Meara/AP

Virginia “Ginni” Rometty, chief executive officer of International Business Machines Corp., applauds while watching the fourth round of the Masters golf tournament from the gallery on the 18th green Sunday, April 8, 2012, in Augusta. Photographer: Chris O'Meara/AP

Corporate executives connected with Augusta National Golf Club ducked the issue of its all-male membership throughout the four-day Masters Tournament that concluded yesterday.

Their silence persisted even after President Barack Obama’s spokesman and Mitt Romney, the potential Republican Party challenger, said April 5 that the near 80-year-old club should admit female members. In addition, social media sites including Twitter.com have been filled with comments calling for an end to gender discrimination at the club.

The issue came to the fore because one of the tournament’s three sponsors, International Business Machines Corp. (IBM:US), is now headed by Virginia “Ginni” Rometty, the company’s first female chief executive officer. IBM’s CEO traditionally dons the club’s signature green member blazer at the tournament, as do the CEOs of co-sponsors Exxon Mobil Corp. (XOM:US) and AT&T Inc.

The decision by these companies to associate with an organization that excludes women may hurt them with customers and other stakeholders, Rakesh Khurana, a Harvard Business School professor who has written about governance issues, said in a telephone interview.

“Notions of equality and inclusion determine a company’s capacity to attract the best employees and keep customers,” Khurana said. “And in an age when communication happens instantaneously on the Internet, just saying you have ‘no comment’ isn’t a viable response. In fact, doing that for a protracted time often causes more problems.”

No Comments

Edward Barbini, a spokesman for Armonk, N.Y.-based IBM, said “IBM has no comment” when asked about the company’s Masters sponsorship and whether the statements by Obama spokesman Jay Carney and Romney had changed its position. Mark Siegel, spokesman for Dallas-based AT&T, said “we are not commenting on this.” Alan Jeffers, a spokesman for Irving, Texas-based Exxon Mobil, said “that question should be directed to Augusta. We don’t have any comment.”

Steve Ethun, a spokesman for the Masters Tournament, also declined to comment and wouldn’t say which executives attended the event in Augusta, Georgia.

Traditionally the top executives of corporate sponsors, including CEOs Rex Tillerson of Exxon Mobil and Randall L. Stephenson of AT&T (T:US), entertain customers at hospitality cabins near the 10th hole. IBM also has a nearby cabin where its CEO usually greets clients. Non-members, who don’t wear green jackets, must be accompanied by a member to visit the course or play a round.

Palmisano on Committee

IBM spokesman Barbini declined to discuss whether Rometty, 54, or Chairman and former CEO Sam Palmisano, 60, attended the event. Rometty eventually was photographed by the Associated Press in the gallery yesterday at the 18th hole -- without a green jacket. Palmisano, who serves on the Masters Tournament’s Digital Technology Committee, was listed on the committees’ assignment list for this year’s Masters.

“We don’t comment on the travel plans or schedules of our senior executives as a matter of policy,” Barbini said.

Inside IBM’s cabin at Augusta National, in a secluded area among towering loblolly pine trees on the left side of the 10th hole, Rick Singer, IBM’s director of sports marketing, declined to comment about the sponsorship.

“We’re not going to talk about anything,” Singer said yesterday. He and other IBM officials at the tournament over the weekend repeatedly told reporters to stay away from the cabin.

Rometty, who took charge as IBM’s CEO in January, plays golf occasionally, according to the company.

Palmisano, during his tenure as CEO, saw diversity as central to IBM’s performance and growth, Harvard University professor David Thomas wrote in a September 2004 Harvard Business Review article. IBM’s website says the company “has consistently taken the lead on diversity policies long before it was required by law.”

‘Backwards Policies’

A petition on the website change.org calling for Augusta National to make Rometty a member, had gathered more than 7,200 signatures as of midday yesterday.

The petition -- headlined “Augusta: Give Ginni Rometty the Green Members’ Jacket!” -- was started by Lynne Manley, a high school English teacher in Milton, Vermont. She wrote on the site, “when my daughter grows up, I want her to live in a world where her hard work is rewarded with a place at the table -- not backwards policies that date back to the 1930s.”

Companies’ reputations may be affected by online protests even though executives didn’t face demonstrators at Augusta National’s gates, said Jim Andrews, a senior vice president of sports sponsorship adviser and researcher IEG LLC. That was the case in 2003 when Martha Burk, who ran the National Council of Women’s Organizations at the time, led others in calling for an end to the all-male members’ policy.

“All you need is a few people who start running with the issue in the social media,” said Andrews, who is in Chicago.

Racial Integration Succeeded

IBM and other companies in the past pressured private golf clubs to end racial discrimination. In 1990, IBM joined other corporate sponsors including Toyota Motor Corp. and Honda Motor Co. in pulling TV ads from the PGA Championship when that year’s tournament was played at the then whites-only Shoal Creek, outside of Birmingham, Alabama.

Augusta National subsequently ended its racial barrier. The club in 1990 extended an invitation to its first black member, Gannett Co. television President Ron Townsend.

Augusta National doesn’t publicize its membership. A 2010 partial list obtained by Bloomberg News and 2004 documents published by the Augusta Chronicle and USA Today suggest the club doesn’t always extend invitations just as new CEOs take over, raising the possibility Rometty may be admitted later.

That may help explain IBM and other companies’ reluctance to protest the all-male membership, said Hayes Roth, chief marketing officer for Landor Associates, a global branding and design firm.

Glass Ceilings

“If any of them had aspirations to have their executives join Augusta National, it’s possible that they don’t really want to raise the issue,” Roth said. “The glass ceiling seems to have been broken inside companies like IBM and Xerox and all the others that have female CEOS. I’m guessing they probably figure ‘We’ve done our bit.”’

Even executives who have spoken out against Augusta National’s lack of female members in the past have been reticent this year. In 2002, Kenneth Chenault, the chairman and CEO of American Express Co. (AXP:US) who is both a member of IBM’s board and Augusta National, said in a statement that women should be allowed to become members and “I have made my views known with the club because I believe that is the most effective and appropriate way to bring about a change in membership policy.”

Last week, in response to a request for an interview on the current situation, Marina Norville, an American Express spokeswoman, said by e-mail, “Unfortunately Ken will not be available for comment, sorry about that.”

Nationwide Debate

Bloomberg News first reported the conflict between Augusta’s male-only membership and IBM’s new CEO on March 28, setting off a nationwide debate on whether she should be admitted.

Augusta National Chairman Billy Payne, who is in charge of the club and tournament, reiterated the club’s rules at an April 4 press conference.

“All issues of membership remain the private deliberations of the membership,” Payne said. “We don’t talk about our private deliberations.”

If Augusta National does decide to extend an invitation to Rometty and other women soon, “I think they’re going to make it look like they did this all on their own, in their own sweet time,” said Roth, of Landor Associates.

To contact the editors responsible for this story: Michael Sillup at msillup@bloomberg.net; Peter Elstrom at pelstrom@bloomberg.net


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