2022 was a year to remember for female CFOs. According to the CFO Movement Study from Cowen Partners Executive Search, more than a third of new CFO hires at Fortune 500 companies and other major companies were women. Fifty-eight women are now CFOs of the largest companies in America. As a matter of fact, the list of female CFOs is impressive. If they occupy mostly the retail industry, with 19 per cent of female CFOS, the other sectors like finance and healthcare should soon follow this natural evolution.
This fortunate trend, however, is not just the natural evolution of an increasingly disrupted role but also adaptation. The role of the CFO has changed enormously from accountant to strategic business partner: technical excellence is still important to the function, but interpersonal skills are becoming crucial, making women especially qualified to assume this evolving role.
An increasingly disrupted role
The CFO’s role has switched from analysing numbers and data to being a growth catalyst, able to detect opportunities to scale up. To do so, CFOs must be agents of disruption and innovation within the company to optimise its agility and competitiveness.
A forward-looking leader
In a recent KPMG CEO Outlook survey, 69% of CEOs indeed reported speeding up the development of new digital operating models and revenue streams. 74% acknowledged digital transformation accelerated at their companies in the past year. CEOs rely on their CFO to meet these ever more demanding pressures now that the recession is pending. CFOs’ unique position within the company, coupled with their insight into performance data and reporting, make them the most relevant agent of transformation.
Technology; a new secret weapon
More and more, CFOs take it upon themselves to harness the power of data and create a connected ecosystem of digital solutions. By identifying manual processes that can be automated and empower staff to focus on creative tasks, save time, and ultimately generate revenues. For instance, AI-driven automation of AR management provides critical, real-time data to support CFOs’ cashflow previsions and decision-making. According to KPMG, leading CFOs of the future will “invest in a target state of end-to-end process automation, low code development, machine learning, and cloud migration”. This strategy will help CFOs deliver faster closes, real-time performance transparency, and dashboard-accessible reporting.
The feminisation of the finance function: a phenomenon of adaptation
Technical left-brain skills, which were enough yesterday, cannot replace the essential right-brain social skills crucial to their leadership today. The CFO of the future has to be much more than a financial expert. The CFO should also become a coach and leader, resolving conflicts within the board or aligning team skills with business needs. And when it comes to interpersonal skills, research shows that women are more qualified and can better handle crises. A study led by Psychology of Women quarterly stated that in times of crisis, female leaders are perceived as more trustworthy than their male counterparts. They can positively influence their entourage thanks to their relational and emotional intelligence.
Interpersonal skills are key to the evolving role of the CFO, who deals with so many different interlocutors, stakeholders, investors, analysts, banks, regulators, governments, and trade groups. Effective and transparent communication is essential, as well as strong leadership. Indeed, CFOs’ daily challenges imply advising and counselling. They lead group-wide discussions and transformation programs and are responsible for getting teams on board to consolidate reporting and planning. In the coming years, the need for eloquence and pedagogy will become essential for CFOs. They must translate complex information into clear and accessible messaging for all audiences. This makes women even more qualified for these types of roles.
Fostering a positive culture based on diversity
According to the recent poll by Gartner, the top challenge for the CFOs in 2023 will be hiring and talent retention, with over half of surveyed CFOs choosing it as their primary “headache”. The CFOs’ role increasingly implies building teams around talent and skills to improve productivity in their department. With talent shortages, external recruitment is getting trickier as the recession hinders external recruitment processes. CFOs must lead their team by coaching and engaging them, but most importantly, by integrating many varied profiles, backgrounds and skills. Among many challenges, CFOs must learn to work with diversity and valorise it to make the most of their team. If anything, CFOs of the future are influencers. Therefore, female CFOs can catalyse this trend, as they embody the power of diversity.
“Getting to CFO is 80% functional/technical and 20% leadership skills. Once in the CFO chair, this equation is turned on its head.” Brian MacDonald, the ex-CEO of The Hertz Corporation, summed up the CFO equation brilliantly. With ambitious goals and a clear vision, the CFO has to encourage employees to give their best and create a system to retain them. Females bring added value to management teams as they have different communication styles based on dialogue. They make great leaders who think outside the box and can encourage technological disruption within the company and foster a culture of diversity.