How Organizations Benefit From Nurturing and Empowering Women Finance Leaders

The benefits for organizations with better gender diversity among its finance leaders include increased agility, greater innovation, and a more robust bottom line. The path to increasing the number of women in finance? Growing the support mechanisms for developing talent.

Boston Consulting Group (BCG) launched research last year to look at women leaders in finance, mostly CFOs, and found a lack of representation among 150 of the largest companies in North America, Europe, and Asia-Pacific. What’s more, BCG discovered that diversity at the top of the finance function correlated with better performance.

“We were able to quantify some of these impacts with regard to stock performance, innovation, and resilience,” said Juliet Grabowski, managing director and partner at BCG, in the recent LinkedIn Live “Why Finance Needs More Women Leaders” event. “And it becomes very clear through the research that there’s a business imperative here, particularly as we move into a more dynamic and versatile and volatile business environment and world.”

Grabowski, who is also global co-leader of BCG’s Center for CFO Excellence, said the findings present “a huge opportunity for gender diversity at the top of the finance function.”

Participants in the LinkedIn Live webinar, moderated by Workday Chief Diversity Officer Carin Taylor, explored the relevance of the BCG study and the ways its findings could help build a better future finance function.

Laura Newinski, KPMG U.S. deputy chair and chief operating officer, said she was struck by the percentage of companies surveyed with a woman in the CFO role: just 13%. In her work with the KPMG Women’s Leadership Summit, Newinski added, she’s become familiar with the incredible progress women can make when consistent and holistic attention is paid to the recruitment, retention, and advancement of women at all stages of their careers.

“To me, this demonstrates that women need support throughout their careers—not just at moments in time, but in all moments that matter throughout the careers of women,” she said.

Grabowski said she’s heard from women finance leaders who see their own experiences reflected in the study’s findings—and the role everyone can play to “pay it forward” by creating sponsorship and mentorship opportunities.

“As women, it’s incumbent on us to do that, but it’s also incumbent on us to encourage and enable our male colleagues to do the same,” she said. “That’s so critical given that we still are in a world where most of the folks at the top are males.”­

Women CFOs Bring a Variety of Leadership Traits

Sheryl Estrada, a senior writer at Fortune who wrote about BCG’s research in January, said three findings stood out: The markedly different—and more cautious—way women CFOs communicate to capital markets; the correlation between women leaders and better financial performance via their resiliency and innovation; and women’s nontraditional paths to the office of the CFO.

Estrada said women leaders excel in their ability “to influence through networking, listening, and cross-functional collaboration, which has really become so important in these times of economic uncertainty.”

Citing an interview with the woman CFO of a Fortune 500 company, Estrada said the finance leader identified listening, asking questions, and not leaping to conclusions as some of her most important actions after taking the role. “A lot of female CFOs echoed that the networking, listening, and learning skills are very important,” Estrada said.

Such traits are increasingly important in a fast-changing world, Grabowski said.

“We live in a world where business cycles are going to be shortening. The changes that are happening in the business environment ripple through the economy faster than ever before,” she said. “And the only way to thrive in an environment like that is to be highly connected within your organization in order to respond quickly—any particular part of the business in a silo can’t solve the problems we’re facing as a world today on their own. You have to work together across the business.”

Women leaders who add a breadth of experience to the finance function also bring more innovation, according to the BCG study.

“Organizations with a female CFO tend to drive a higher percentage of their revenue from innovation initiatives,” Grabowski said. That includes new products and services—“things that are innovative and new to their company and to the marketplace.”

What Skills CFOs of the Future Will Need

The widespread uncertainty caused by the COVID-19 pandemic required companies to prepare for a future that no one could predict with certainty. Finance leaders, in particular, had to approach scenario planning with creativity and innovation.

“The CFO’s role has been evolving for quite some time, but the pandemic really accelerated that process,” Estrada said. “And a lot of what we've seen coming out of the pandemic, the importance of empathy, of communication, of transparency, are skills that the CFO of the future will need.”

Grabowski said the CFO’s role is expanding into a strategic thought partner that drives action. That, she added, requires a completely different way of engaging, collaborating, and managing. “This sort of old-school, command-and-control way of managing is evolving into the sort of newer-school sensing and shaping.”

Newinski added that finance leaders need to be able to engineer growth as well as drive and contribute to corporate purpose, innovation, and ESG initiatives. “Finance leaders really need to be the whole package.”

The varied backgrounds of women who rise into positions of leadership helps to bring fresh perspectives and inspire creativity, Newinski said. “Gender diversity is a factor that will cause organizations to be in the best position to influence growth, strength, and resiliency and eventually achieve amazing outcomes for organizations.”

Women leaders, Newinski added, step up when given the opportunity.

“Times of uncertainty really offer women leaders a chance to step up, to be confident,” she said, as well as the opportunity to show empathy and “the ability to navigate unknowns, to influence change, to drive lasting resiliency through an organization.”

A Focus on Career Growth for Women

Gender diversity among finance leaders isn’t about quotas, Grabowski said, but should involve thinking critically about how to seek candidates across the business. “Are there folks outside of my organization I should be considering?” she added. “Particularly at the top, that becomes especially important.”

Touching upon diversity, equity, and inclusion, Grabowski made a distinction: “Having a diverse workforce versus having a workforce where everyone feels included is different.” She added that benefits that are thought to help support women, such as flex time, should be extended to men, as well. “What we find is when we treat men in the same way that we do women, it normalizes things. It creates a more inclusive workforce for people to be able to talk about and engage on these sorts of topics.”

Newinski also emphasized the importance of inclusivity.

“A culture of inclusivity is so empowering to achieving the outcomes that we’re talking about today, which is more women in senior finance roles,” she said. “When organizations invest in a culture of inclusivity, the ability to create that momentum for everyone will propel women leaders forward along with talent from other underrepresented groups toward to achieve their greatest potential and become their best selves.”

Parting Advice for Women Leaders in Finance

Imagine your career as a jungle gym, Newinski said. “When you're on a jungle gym, sometimes you have to let go of the bar and take risks to reach the next one, right? Or, you might need to move down on the jungle gym before you move up. Careers are about accumulating experiences and perspectives, not about grabbing the next titles on a ladder.”

Estrada emphasized the importance of diversifying skill sets and developing strong communication skills, as well as networking and building relationships. “And be willing to take high-risk or challenging assignments,” she said. “You need to be willing to step outside of your comfort zone.”

When thinking about applying for that promotion, Grabowski advised, go for it. Research suggests men are more likely to apply when they’re partially ready for the role, while women disproportionately apply only when they feel fully ready, she added. “The one piece of advice I would give is: Take that risk. Go for it. Be open and creative. You’re smart. You’re resilient. You’ll figure it out, and you’ll do an amazing job.”

Watch the full LinkedIn Live webinar “Why Finance Needs More Women Leaders.”