- Three out of five CFOs plan in coming months to push diversity and inclusion (D&I) programs within their companies through such efforts as leadership mentoring programs for women and minorities, PwC said, citing a survey of financial executives.
“CFOs are putting their money where their mouth is around people, with more than half making investments in D&I training (57%),” PwC said in a report on a survey this month of 128 financial executives at Fortune 1000 and private companies. "And 60% plan to advance" D&I efforts.
At the same time, most CFOs said their companies will respond to a labor shortage and seek to differentiate themselves from rivals by emphasizing leadership and culture (63%) and company purpose and values (61%), PwC said. “While this focus might typically be something coming from the CHRO, CFOs often serve as stewards of the company, communicating the company’s brand and mission to investors and other stakeholders.”
Securities and Exchange Commission (SEC) Chair Gary Gensler said on Aug. 18 that the agency is considering requiring public companies to disclose details about diversity and other workforce demographics.
“Investors want to better understand one of the most critical assets of a company: its people,” Gensler wrote on Twitter, saying that he asked staff for recommendations on “human capital disclosure.
“This could include a number of metrics, such as workforce turnover, skills and development training, compensation, benefits, workforce demographics including diversity, and health and safety.”
The SEC in June listed “human capital management disclosure” on a list of potential rulemaking.
The PwC survey showing an emphasis on diversity reinforces the findings of prior research. Eighty-six percent of financial executives at companies in North America are expanding their budgets for training in diversity, equity and inclusion (DEI), according to a survey in April by OneStream Software.
Seventy-seven percent of financial executives working in finance and 65% of those working in information technology are investing more in DEI training compared with 52% in other industries, according to the survey of 340 finance decision makers in the U.S., Canada and Mexico.
U.S. businesses have stepped up support for DEI training and related programs since the murder of George Floyd while in police custody in May 2020.
In October the Business Roundtable, an organization of CEOs at many of the largest U.S. companies, pledged to regularly review pay equity and provide more information about the racial diversity of company leadership and staff.
The organization also backed corporate and government programs aimed at reducing the economic opportunity gap in communities of color. Roundtable companies generate more than $9 trillion in annual revenues and employ 20 million workers.
PwC also found in its survey that eight out of nine CFOs said their companies now face higher than normal rates of turnover, with 81% concerned that high turnover and labor shortages will slow revenue growth.
Three out of five (61%) of financial executives believe better wages/salaries elsewhere is spurring turnover, and many CFOs “recognize they may have to start paying more for talent if the tight labor market lasts,” PwC said. More than half of financial executives (51%) are rethinking and promoting their company’s purpose statement to attract talent.
Nearly half (48%) of CFOs said a “hybrid work model” combining remote and in-office operations poses a challenge to corporate culture, PwC said. Two out of five CFOs said a hybrid model reduces mentoring opportunities.
Still, financial executives indicated that “their companies more fully embrace a hybrid work model, which the majority of CFOs say is part of their company’s plan in the near future,” PwC said.
“CFOs want to transform even faster: 68% are investing in digital transformation over the next 12 months, including in technologies like cloud and analytics,” and 67% are investing in cybersecurity tools and training, PwC said.