DESPITE spending decades in the headlines, gender equality at all levels of business remains a depressingly long way off.
At present, there are 11 female CFOs in the FTSE 100, a number that rises to 23 if you take in the FTSE 350 and count one acting CFO. It becomes more depressing when you consider that the top 30 companies in the FTSE 100 have just one female CFO.
More widely, women make up around a quarter of FTSE 100 boards, up from 15.6% in 2012. However, that is primarily at non-executive level and in executive roles the figure is starker, languishing below 8%. Then there is the pay gap, where the discrepancy stubbornly loiters around the 19% mark nationally, according to PwC.
It’s a grim picture, and one that in 2014 is depressing in its normality. As such, businesses have been challenged to diversify their CFO recruitment policy by advisory firm Egon Zehnder.
The executive search business is seeking to ensure a quarter of FTSE 100 CFOs are women by 2025 by overhauling their recruitment process and talent management both internally and externally.
Indeed, some sectors seem to have even gone backwards, with banking and financial services falling from its 11th position in the ranking of industries best representing women, to 23rd.
Ça?la Bekbölet, who leads Egon Zehnder’s global financial officers’ practice, tells Financial Director that a key part of the battle is helping boards realise the value of diversity.
“We want to facilitate 25 women CFOs by 2025. Part of that is helping our clients understand the value of gender diversity when they go for an external search, but equally important is helping them identify and then develop the talented women in their finance function to create that option for succession when the right time comes,” she explains.
The move follows a similar drive to increase the number of female chief executives by the same factor, which was met with much fanfare by commentators and the media at large.
Indeed, chairwoman of the 30% Club and CEO of Newton Investment Management Helena Morrissey notes the importance of focusing attention on executive roles.
“Clearly, there’s been a lot of progress on boards in the past few years, but we need to focus on school room to boardroom,” she says. “It takes a decade or longer to make a CFO or CEO, and so the way this drive is structured is a sensible, medium-term plan and throws down the gauntlet to recruiters over the types of candidates they consider for roles.”
Hiring in your own image
Part of the issue is the propensity for many executives to hire in their own image – a phenomenon known as second-generation gender bias, which shapes formal systems such as recruitment and promotion practices as well as compensation. And, given that most of those at the top are white men, the cycle will generally continue as it is.
“It’s not about bias against someone because their gender is different from your own; it’s about bias against someone because the characteristics displayed are different from your own – characteristics that may be a function of gender,” Saïd Business School professor Kathryn Bishop explains.
Such practice is in many ways a risk-mitigation mechanism – the idea being that you’re more inclined to trust those whose traits are similar to your own and so seems like are a safe pair of hands.
“If you’re not thinking carefully, you are quite tempted to hire in your own image. It’s a risk thing as well. If I get somebody who’s done the jobs that I’ve done, who works the way that I do, the chances are that person will be successful and solve the problems I’m recruiting the person to solve,” she says.
In order to counter that predisposition, changing the criteria in the hiring process can be key, it transpires. As such, recruiters such as Egon Zehnder now make it their business to get to know the best female talent in the market prior to the emergence of a given vacancy, and to play a more active role in the formulation of the long- and short-lists for the roles.
Additionally, a lack of effective childcare support is often cited as an impediment to the progress of female talent.
An example of how to solve this problem is Royal Mail, which now provides a crèche to staff in order to help circumvent the childcare issue at the behest of its CEO and 25 by 25 supporter, Moya Greene, as she seeks to instil standards similar to those in Sweden and her native Canada.
To that end, the CBI recently recommended extending free childcare provision of 15 hours to all children aged one and two years, with the longer-term aim of increasing the number of hours provided; extending maternity pay from 39 to 52 weeks to close the gap between maternity leave and the time at which free childcare becomes available; and encouraging businesses to adopt a presumption in favour of flexibility from the job advert stage to help employees save on childcare costs. Whether those proposals become policy, though, is no certainty – particularly given next year’s election.
But while those suggestions may be of some practical help, greater interest in nurturing and developing talented women is pivotal to improving the situation both culturally and in the hard facts, Bekbölet says.
“Part of our role is to help companies realise where their high-potential talent is,” she explains. “We’ve researched the difference between a good and a great CFO, and we know the traits they show. One of our clients is piloting [a way of]identifying CFO potential ten or 15 years earlier. It’s about looking at individuals and understanding elements of their potential for the future and how it can be developed. We look at their curiosities, the proactivity with which they seek new experiences, how they develop insights, how they engage others, their ability to cut through obstacles.”
But what of the finance department? Well, technical specialism such as finance and accountancy may be perceived differently from progression through a more general route, Saïd’s Bishop suggests, and as such this could prove more favourable to women possessing strong technical knowledge.
That, it seems, works up to a point, but it doesn’t hold true at senior level.
“It’s possible in the early years of a finance professional’s career – where expertise and deployment is very much a key part of succeeding – that you will make progress,” she explains. “But of course when you get to senior level, whatever your discipline, it’s about collaborating. It’s about becoming what we call a ‘T-shaped manager’, where you have deep, functional expertise – the vertical bar of the T – but when you get to the top, you need to connect and collaborate on a much shallower level with what it is others do.”
A chicken-and-egg cycle
Helena Morrissey notes that the gender disparity tends to occur when women are between the ages of 28 and 40, and those relatively few women who remain at 40 tend to go on to gain senior posts.
“It’s difficult to break the chicken-and-egg cycle of it all,” she says. “There’s an age group where women’s careers tend to diverge from their male colleagues. Up until around 28, they tend to be step-by-step together, and it transpires that you can go onwards and upwards if you make it through until your forties, but it’s at 28 to 40 that so many women don’t make it.”
It’s often the perception that the divergence occurs due to pregnancy and subsequent childcare, Morrissey says, but there’s the more latent problem that many women don’t have children, yet are simply overlooked for promotion.
More welcoming office environments – ones that not only enshrine flexibility in policy but also in culture – are key, she explains. The overall effect will not only provide women with the same footing as their colleagues, but be better for men, too, Morrissey adds.
“There has to be a conscious effort to make working environments encouraging for both genders,” she says. “It’s about having a modern workplace. There has to be good use of technology and discouragement of presenteeism, and it has to be more output-orientated. I talk to people in finance functions and I remember one woman saying her boss said she could work flexibly, and so she worked early hours and would leave early – but when she left at four to pick up her child, he would look at his watch. The reality was even though it was contractual and she started at 7am, it wasn’t treated as natural and normal.
“This is about urgency of efforts to get there [25 CFOs by 2025], even if we miss out by a percent or so. It’s quite important for really galvanising collaboration. I would like to think we could be more ambitious within the timeframe.” ?