Growing ranks of female finance directors boost board diversity. Fiona Hathorn comments in the FT.

Jessica Uhl, Royal Dutch Shell’s newly-appointed chief financial officer, joins the growing ranks of women rising to the boardroom via the finance route, a trend that could boost the low number of female chief executives in future.
Ms Uhl, whose career includes stints at Citibank and Enron, will oversee the finances at an energy giant battling record debt after its £35bn acquisition of BG Group and a prolonged slump in oil prices. 

That one of the most exacting finance jobs among FTSE 100 companies will go to a woman is part of gradual but notable increase in gender diversity at CFO level. But progress for female representation in the chief executive job remains sluggish, however.  “There are larger numbers [of female CFOS] and the numbers are growing a bit faster than for CEOs,” says Meggin Thwing Eastman, vice-president of MSCI’s governance research. 

MSCI data show that out of 2,470 big global companies, 203 had a female chief financial officer at the end of September this year — just over 8 per cent of the total, up from 6.8 per cent in 2015.  In comparison, women held around 3.6 per cent of the chief executive positions in 2016, up from 3.2 per cent last year.  In the US, women accounted for 12.2 per cent of finance directorships in 2015 and 13.3 per cent in 2016 — while the share of female chief executives stalled at around 4 per cent.

Ms Uhl’s appointment at Shell raises the number of female CFOs in the FTSE 100 to 12 at a time of growing frustration over the broader lack of progress on gender diversity on boards. Governments are increasingly calling on large companies to close the gender gap at the top of their organisations, and some countries — such as Norway — have set quotas to ensure more gender balance. Academic research suggests that having more women on boards can boost growth and return on equity. Globally, women held 15.8 per cent of all directorships at large and mid-cap companies as of September this year, up only slightly from 15 per cent last year, according to the MSCI research.  CFOs typically have a background in accounting. Noeleen Doherty of the Cranfield School of Management says that working in finance allows women to prove their competence objectively and gain credibility in a world where the stereotype is that “men know numbers and women don’t”.  More than that, “it gives women a rite of passage to be considered for the board”, she says. “It’s a facilitator.”

Many of today’s female corporate leaders have risen to the boardroom via less analytical fields such as marketing or HR, while their male counterparts tend to follow “the more traditional route” of finance, according to Fiona Hathorn, managing director of Women on Boards UK. An “exceptional” career like that of chief executive of easyJet’s Carolyn McCall — who has worked in teaching, advertising and retail — is difficult for some women to relate to, she says. As a result, “the CFO role model is more powerful”, she adds. Women who have been appointed to CFO or finance director roles in the UK since 2014 include Helen Weir at Marks and Spencer, Kathryn Mikells at Diageo and Ingrid Johnson at Old Mutual. 
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