The World's Most Powerful Women

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    For the second year in a row, Angela Merkel, the first woman to become chancellor of Germany, ranks No. 1 on our list of the World's 100 Most Powerful Women. She continued to impress the world with her cool leadership at two back-to-back summits. First, she stuck to her principles, getting G-8 leaders to agree to significant cuts in carbon emissions, among other things. Merkel later corralled European Union countries into an agreement on a treaty to replace the E.U. constitution.
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    Meanwhile, China's vice premier, Wu Yi (No. 2), continues to help lead a government that oversees an economy whose gross domestic product may soon eclipse Germany's, making it the third-biggest economy in the world. Wu recently stared down U.S. Treasury Secretary Henry Paulson when he made myriad demands, including a revaluation of the yuan, in recent strategic economic talks with the U.S.
    But China faces enormous challenges in improving its rickety social, legal and economic infrastructure, which now has to contend with an overheated stock market, unsafe and shoddy products and severe pollution.
    Women are also making very visible advances in business. In the year since we last ran our ranking, Angela Braly (No. 16) took the helm of insurer WellPoint, providing health care coverage to one in 10 Americans; the world's largest money-transfer company, Western Union, was spun off from First Data under the leadership of Christina Gold (No. 56); and PepsiCo Chief Executive Indra Nooyi (No. 5) added another title, that of chairman.
    While there have been plenty of hand-wringing studies arguing that the corporate glass ceiling for women has turned into concrete, we had no difficulty turning up 66 business executives worthy of inclusion on the list. The remaining 34 are mostly in government.
    If women aren't being stopped by any ceiling, it still can be argued that they have a tough go on the way to the top. Catalyst, a New York City firm that tracks the progress of women in corporate management positions, reports that women's hold on senior management jobs in the U.S. has stayed essentially flat over the past four years. They account for 15.6% of 10,145 corporate officer positions (chief financial officer, chief information officer or higher) in the 500 largest U.S. corporations.
    Our ranking system starts with a list of women who have crossed certain thresholds. Most of them run companies, governments or nonprofits, or are very close to the top. A handful have established power bases in other ways (an entertainment entrepreneur, a judge and an author have been on the list). The power ranking score is based on a composite of visibility (measured by press citations) and economic impact.The latter, in turn, reflects three things: résumé (career achievements and titles, so a prime minister counts as more powerful than a senator); the size of the economic sphere over which a leader holds sway; and a multiplier that aims to make different financial yardsticks comparable. For example, a chief executive is assigned the company's sales in the economic impact calculation, while a foundation executive is assigned the foundation's assets. The assets get a higher multiplier than sales.
    Assistance: Laura Liswood, secretary-general of the Council of Women World Leaders.
    Reported by Megha Bahree, Helen Coster, Suzanne Hoppough and Tatiana Serafin. Additional reporting by Erika Brown, Victoria Murphy Barret, Heidi Brown, Ryan Derousseau, Allison Fass, Matthew Herper, Luisa Kroll, Claire Cain Miller, Anne P. Mintz, Zina Moukheiber, Cristina von Zeppelin and David Whelan.
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