In the first half of this year the share of female CFOs at major U.S. companies rose nearly one percentage point to a fresh record high of 16% compared with 15.1% at the end of 2021 and 12.6% in 2020, according to new 1H22 data published in executive search firm Crist|Kolder Associates’ updated Volatility Report 2022.
Over the same period, the share of racially and ethnically diverse CFOs at the 681 Fortune 500 and S&P 500 companies surveyed also touched a record high of 10.9%, roughly flat with the 10.8% level at year-end 2021. The level is one point higher than the 9.8% share seen at the close of 2020, the report found.
- While it’s not fully clear why inroads made by Black, Latino and Asians into top finance roles appear to be flat-lining this year, an increasing number of experts say the slowed rate of progress points to the need for more companies to promote diverse talent from within to diversify the finance talent bench. “Businesses have to do a much better job of promoting diverse talent from the moment they walk in the door,” said Josh Crist, managing director at Crist|Kolder, noting that there are more CFO-ready women than diversity candidates.
The study’s signaling of slowing racial diversity gains in CFO seats comes despite increasing pressure on businesses from regulators and a wide number of stakeholders to diversify their ranks that has intensified since the murder of George Floyd while he was in police custody in May 2020.
Last year the Securities and Exchange Commission backed a Nasdaq rule requiring race and gender diversity on corporate boards and many companies are focusing on fostering diversity as part of their environmental, social and governance (ESG) initiatives. Despite the intensified focus on diversity it will take time to develop a deeper pipeline.
Still, broad progress has been made for women and diversity in the C-suite with levels in both categories at an all-time high since 2004, the study found. As of the end of July the report findings showed that there were 74 CFOs characterized as ethnically or racially diverse this year at the biggest companies, roughly three-fold the 24 reported in 2012. Citigroup’s Mark Mason and Hostess Brand’s Travis Leonard are among the current CFOs of color at major companies.
The Asian segment has shown the biggest gains, with a total of 43 finance chiefs as of July, up from 39 in 2021 and 40 in 2020. The number of Black CFOs ticked down this year to 19 compared to 20 at year-end 2021 and 12 in 2020, and there were 12 Latino or Hispanic CFOs in July, down from 14 last year and the same number in 2020, according to the study. It’s not clear how many of the CFOs of color were also women.
Given the push for diversity, Crist continues to expect the numbers to skew higher and he was encouraged by the robust rise in female CFOs this year. At the same time, he said this year’s slower pace on diversity hire progress could also be related to companies increasingly looking to hire internal candidates for CFO roles, something that he expects to see increasing if the economy continues to sour.