The Gender Pay Gap in Finance: Challenge or Opportunity?
The prospects for women to reach the top of the finance career ladder and secure one of the most influential leadership roles are certainly improving, but like it or not, the gender gap still exists.
Amy Parkinson, Principal in the Financial Leadership Practice at executive search firm Berwick Partners, considers the current landscape for women in finance, and whether the gender gap is a challenge or an opportunity.
Workplace for women
The opportunity for women in finance to reach top roles does exist, and the good news is that the workplace for women is changing, with greater flexibility around maternity and paternity leave certainly helping. The internal focus of businesses to identify and support talented women is also a contributor, as organisations take seriously their commitment to diversity, and recognise that women on boards add valuable perspectives at a senior level.
Whilst there are many women in finance, there are simply not enough at board level.
We see many male leaders reflecting on their unconscious bias and behaviours which may in the past have inadvertently discouraged women from reaching their full potential. This shows they can be women’s biggest allies in reducing the gender gap in finance.
Increasingly, we see evidence of promising female finance leaders coming through from a wide cross-section of academic disciplines, inspired by initiatives such as STEM Learning, which has encouraged young women to pursue education in maths, tech, engineering and the sciences. Graduates in these areas are well-positioned to later secure roles in accountancy practices, the finance industry, or in financial leadership, because of their strong numerical and analytical bias. This is helping the next generation of women to enter the workplace equipped with the skills to make it to the top.
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Financial leadership is certainly in-step with the rise in the number of women at the top – in 2018, 44% of the senior finance appointments we made were of women. This would have been closer to 30% five years ago. However, it still remains that whilst there are many women in finance, there are simply not enough at board level.
Since 1998, The Female FTSE Board Report produced annually by Cranfield University’s School of Management has monitored trends in women’s representation on FTSE 350 boards. According to the 2019 Report, there are 339 female held directorships across the FTSE 100 corporate boards. The percentage of women on those boards has increased from 29% one year ago to 32.1%, so it is a positive step in the right direction.
The report also identifies some finance specific insights:
- There is a high degree of financial literacy amongst women in FTSE boards, as 55% have held financial roles across finance, auditing, investment, treasury and banking.
- 13% of women directors hold a recognised financial qualification, and 22% hold an MBA degree, in which finance is a core subject.
Certainly, this is evidence of the value of financial qualifications to a strong career path to the top, but many boards are still not adjusting company culture to encourage women to pursue executive careers.
Shifting skills base
Financial leadership roles have evolved from the more straightforward financial record keeper to a business leader with exceptional financial intelligence, and proven skills across commercial, strategic, operational and leadership competencies. As well as financial skills, it’s important to develop a broad base of ‘soft’ skills to offer credible advice.
Various studies into the numbers, or lack of, women in senior finance positions, suggest various reasons for the slow progress for women in finance, including investor concerns that women lack City experience.
Efficient career planning can and does make a difference to turning the challenge of diversity into an opportunity. Taking time to invest in identifying the roles key to creating a solid career path is invaluable.
In particular, roles employers look for on a CV are Divisional Finance Director and Group Financial Controller. These give the opportunity to develop relationships with key career influencers and prove strategic expertise with a panoramic view of internal and external issues.
The Group Financial Controller (GFC) role provides exposure to the key influencers in their future career – the board, investors, auditors, brokers and banks. It also demands solid relationship-building with a highly valuable network, which will gain a reputation as a trusted financial steward in business. The role of GFC can be a real differentiator with its focus on the more strategic elements of a business and delivers the chance to impress and build credibility with stakeholders. Within a listed company, it is unlikely a CFO won’t have undertaken a GFC role at some point in their career.
Also valuable is a Divisional Financial Director role. This demonstrates capability to drive performance in a business. Being accountable to the Group demonstrates ability to build the all-important value for the shareholder, especially under close scrutiny and high pressure.
There are numerous examples of different career paths women have taken to the top of an organisation, and for female finance professionals, the role of CFO features often.
Frequently the confidant and ‘right hand’ to the CEO, a CFO not only needs the financial insight and analytical skills to challenge the business but is also expected to be curious, to ask the CEO questions about all areas of the business. Little surprise therefore that it follows that many CFOs go on to become CEOs.
Walk the talk
In a recent study ‘The Route to CFO’, we sought the opinions of sixty CFOs from a range of industries and backgrounds and asked them for their advice for aspiring CFOs. We found that the role of a CFO today is not just managing the finances, but also being a true business leader.
The CFOs we surveyed had built a broad base of skills to give them the knowledge to offer credible advice and challenge themselves with situations that give opportunity to demonstrate their value. Many gained international experience, and they all built relationships with the business and their teams to gain respect as a real leader.
CFOs also advocate seeking out opportunities to develop leadership skills. The days of a traditional ‘ivory towered’ FD are well and truly behind us. An effective leader has to be the trusted adviser who leads the executive and their own teams.
Growing knowledge and networks to support personal and professional development is paramount.
Growing knowledge and networks to support personal and professional development is paramount. This is something we are actively striving to tackle by creating programmes designed to inspire, inform and encourage future leaders, specifically supporting aspiring CFOs and finance leaders to navigate the next step in their career.
The Emerging Leaders programme ‘matches’ high performing individuals aspiring to Executive Board level positions with mentors, and connects with a network of prominent business figures.
For women in finance taking a strategic approach to their career to the top, the gender gap is an opportunity worth tackling. Many organisations are serious about diverse leadership and are actively looking to correct the gender imbalance. Look to Oracle Corporation and its Chief Executive and CFO Safra Catz, and tobacco giant Imperial Brands’ Chief Executive Alison Cooper who began her career as an auditor at Deloitte and joined Imperial Tobacco as Group Finance Manager and was promoted two years later to Group Financial Controller. The number of women at the top of financial leadership may not yet be where it should be, but is on the up; I hope the 44% of senior finance appointments we made in 2018 being of women, hits 50% by 2020.
For more about Berwick Partners, visit: https://www.berwickpartners.co.uk/