A finance function culture that embraces and leverages diversity and drives inclusiveness can realize significant performance benefits and help tackle key issues facing the finance function. For example, our research shows that finance leaders are committed to driving finance diversity to resolve talent gaps. Sixty-six percent of finance leader respondents worldwide said that “organizations will need to recruit from diverse pools of talent to find the next generation of finance leaders.” It is a particular focus for finance leaders at large companies, as well as for younger CFOs (see Chart 3).
Chart 3: Diversity and inclusiveness on the agenda
This finding reflects the fact that organizations are increasingly recognizing that diversity is key to high performance. For example, EY global research report into gender diversity – “Women. Fast forward: the time for gender parity is now” – outlined the positive impact of women’s advancement. The performance advantage included a positive correlation between GDP per capita and gender equality, and how a better gender balance on boards correlates to a better share price and financial performance.
Addressing conscious and unconscious biases
At the core of helping to meet the diversity challenge for aspiring finance leaders will be acknowledging and overcoming conscious and unconscious biases. For example, in the area of gender diversity, of our sample of 769 finance leaders from organizations with revenue greater than US$100m, only 117 were women, and 652 were men. And yet, only 57% of women finance leaders and 49% of male finance leaders we surveyed believe that “not enough female future finance leaders are emerging.” This points to an unconscious bias for both men and women, both of whom seemingly underestimate the obstacles to finance senior leadership for women, albeit slightly less for women.
To start addressing their own and others’ biases, finance leaders can:
- Take care the “tone from the top” is right, by first understanding your own biases and developing strategies to manage them.
- Implement targeted interventions, such as training. Over half of finance leaders (52%) believe “training for all staff, including leaders, to address conscious and unconscious bias issues” is important to increase appointments of female CFOs.
Deborah Gibbins, CFO of Mary Kay, who describes herself as “very optimistic” about female leadership diversity, believes that flexible HR policies are critical.
“I'm very optimistic,” she says. “Obviously, I have made it as a female CFO and in our organization we are very balanced regarding men versus women in leadership positions in finance. I think Sheryl Sandberg probably hit the nail on the head by saying the biggest challenge will be getting younger women not to drop out. I think HR has to work with the businesses to decide ‘when can we flex?’ How can we do that in a way that's fair – so that people don't feel like someone has been treated unfairly or be given favorable treatment? That it's available broadly across an organization in a way that makes sense.”
As Chart 4 shows, in addition to the right HR policies, finance leaders believe that role modeling and effective communication are keenly important approaches in increasing the number of female CFO appointments.
Chart 4: Fast forwarding female finance leaders