Emma Walmsley, a consumer products marketer for L’Oréal before GlaxoSmithKline CEO Andrew Witty convinced her to join the UK-based pharmaceutical giant six years ago, has been named as his successor. Witty, 52, plans to step down March 31. Walmsley, 47, has most recently been in charge of GSK’s global consumer healthcare division and, notably, had experience running L’Oréal's business in China.
“In choosing someone with a consumer background, GSK has signaled its intention to sharpen its commercial focus at a time when, like most big pharmaceutical companies, its traditional drugs business has been hurt by generic rivals,” write John Murray Brown and Andrew Ward for Financial Times.
“Analysts believe her consumer products background probably safeguards the future of the consumer business in GSK for the time being, at a time when some investors favor a break-up of the group,” writes Angela Monaghan for The Guardian.
The Wall Street Journal’s Denise Roland and Joann S. Lublin point to a strategic shift Witty has been leading at GSK.
“While other major drug companies have increasingly focused on expensive new therapies for cancer and other diseases, [he] has put increasing emphasis on consumer-health-care products and vaccines. He achieved that largely through a three-part, $20 billion deal with Novartis that involved swapping Glaxo’s cancer-drug portfolio for the Swiss company’s vaccines business and pooling their consumer-health-care businesses into a joint venture controlled by Glaxo,” they write.
The GSK division Walmsley currently runs was formed in March 2015 following the completion of that three-part deal, according to her GSK bio, which also reveals that she holds an M.A. in classics and modern languages from Oxford University.
“Consumer products now make up around a third of GSK’s revenues. Operating margins for this side of the business are in the high teens, which, while not to be sniffed at, are far less impressive than those for pharmaceuticals and vaccines,” writes Ben Wright for the Telegraph, pointing out that “some fund managers … have been agitating for a break-up of GSK — with Walmsley's division first for the chop.”
Other investors were hoping the new CEO would have more of a scientific or pharmaceutical background, several articles point out.
A breakup of the company is unlikely under Walmsley, Julia Bradshaw suggests in another piece in The Telegraph, saying she is likely to continue to pursue Witty’s policy of diversification.
“Choosing Emma Walmsley suggests a strategy of evolution rather than revolution,” Joe Walters of Royal London Asset Management tells Bradshaw. “A big change in the firm’s corporate structure is less likely.”
“Walmsley brings considerable international experience to a business that generates most revenue outside Europe. At L’Oréal, she held a variety of marketing and general management roles in the U.K., Europe, the U.S. and China,” The Guardian’s Monaghan reports. “In her last job at the French cosmetics company, Walmsley ran the company’s Chinese consumer products business out of Shanghai for three years, overseeing global brands including L’Oréal Paris, Maybelline and Garnier, as well as Mininurse, a Chinese skincare brand.”
In a widely publicized case in 2014, China charged Briton Reilly, the former head of GSK’s division in that country, and other executives with bribery. It fined the company $489 million and deported Reilly. “GSK said it remained committed to China and promised to become a ‘model for reform in China's healthcare industry,’” Reuters’ Adam Jourdan and Ben Hirschler reported at the time.
Walmsley will be only the seventh woman to lead a company listed on the FTSE 100.
“She joins Carolyn McCall of discount airline EasyJet, Moya Greene of Royal Mail, Veronique Laury of home improvement retailer Kingfisher, Alison Cooper of tobacco company Imperial Brands, Alison Brittain of Costa Coffee owner Whitbread, and Liv Garfield at Severn Trent, a U.K. water company,” Claire Zillman reports for Fortune.
“Increasing female leadership in British business was a priority for former Prime Minister David Cameron, whose administration … set the goal of reaching 33% female representation on corporate boards by 2020,” Zillman continues.
In a piece written three years ago for the Lean In Web site, Walmsley describes a networking lunch she had with Witty where she was offered the presidency of GSK’s global consumer healthcare business.
“I spent a week persuading myself I would be insane to do it,” she writes, citing several professional doubts as well as the prospect of uprooting her four young children, who had settled into routine in Shanghai after a move from New York three years earlier.
But then she took the job. She credits a conversation with her husband that left her with the takeaway, “People regret far more what they don’t do rather than what they do.”