Making it Work: Grooming More Women for Leadership Roles in Finance

by Raheela Gill Anwar

Many organizations fail their high-potential women. There are many ways organizations can address gaps and help women advance to the C-suite.

This has been a standout year for women gaining visibility in politics and speaking out on social and gender issues. Additionally, women continue to make progress in corporate America, but not at the top. What is driving women’s low representation in the leadership pipeline and executive ranks? For years, companies have been touting programs that help women succeed, but the numbers remain consistently low for women in leadership positions, including those in senior finance roles.
One thing is for certain: The dearth is not due to a lack of women entering finance. A Spencer Stuart study showed that women represent more than half of accounting graduates and 61.3% of accountants and auditors, yet only 12.5% of CFOs in the Fortune 500. Clearly, some barriers and gaps must still exist that hold women back from gaining traction at the top. Add this to the corporate de-layering trend and you have fewer advancement opportunities all the way around.
Yet, the problem is complex. In most industries, men and women enter the workforce at equal rates. Of course, this changes when women start leaving the workforce to start or care for their families. At this juncture, many organizations fail their high-potential women (who could ultimately develop into executives or take on broad-based leadership roles) in numerous ways:
  1. Career pathing. According to a study from Working Mother Research Institute, women are less likely than men to understand their career paths within an organization. For example, 48% of men polled said they had access to or were given comprehensive information about their possible career paths to higher positions, compared to 15% of women. The majority of women aren’t aware of the skills and steps they need to take to advance to high-potential or C-suite positions. Instead of presenting the career path as a long-term opportunity, companies take a short-sighted view.
  1. Strategy around leaving and re-entering the workforce. The challenge here is how to navigate short- or even long-term absences while accommodating roles that are traditionally full-time positions, in order to not lose valuable talent in the long run. Finance roles in particular can be difficult in this regard due to the very specific skill sets required. Many organizations lack the flexibility and creativity required to make it work.
  1. Lack of emerging leader development. Women who don’t follow a straight career progression line can sometimes be passed over for development opportunities. The Working Mother study found that 28% of women compared to 53% of men participated in a leadership development program in the past 24 months. What’s more, 14% of women versus 46% of men have been encouraged to consider roles with P&L responsibility. 
  1. Lack of succession planning/role models. McKinsey links higher levels of ethnic and gender diversity (at all levels including the board) with higher corporate profitability, yet women are less likely to be identified or groomed for senior roles. This results in a lack of role models for women as they seek to advance within the corporate ranks. 
What Companies Can Do
There are many ways organizations can address gaps and help women advance to the C-suite:
  • Greater transparency regarding career paths, development and succession planning. Women need clearer development experiences and opportunities that foster career paths to the C-suite, and the steps required for internal mobility as well as consideration for high-potential development.
  • An end to assumptions. Companies and senior leadership should stop making assumptions about women’s career ambitions as they relate to their personal lives. Often, leaders-in-the-making are willing to make work/life trade-offs to continue to advance their careers. According to the Working Mother study, “Women want to be judged on their results without preconceptions about their personal lives. Several women have husbands who downshifted their careers to support the acceleration of the wife’s career. Others had extensive paid help.”  The key is open dialogue to allow all employees opportunities for advancement. Current norms around the talent review process – the need for speed, for example – prevent this type of dialogue.
  • Creativity around role structuring and flexible work arrangements. Job-sharing and work-from-home arrangements continue to be competitive advantages for companies seeking to retain top talent. More often than not, executives with these arrangements take ownership for good communication, productivity, and accountability, therefore going out of their way to get the job done. Meanwhile the company gains consistency and succession planning advantages. Instead of being the company’s problem, it becomes the individual’s opportunity.
Top finance roles can be difficult for job-sharing or flexibility, but with a little creativity it can be done. For example, a candidate for controller at a leading regional bank wasn’t initially convinced the organization was the right fit for her. Her second round of interviews with peer role models (other successful women leaders in the organization) convinced her to take the job. She later had twins, one of whom had some special needs, and the company accommodated her – first with a leave, then part-time re-entry, then a flexible work schedule. She has now been there almost 15 years and was ultimately able to take on responsibilities for a broad-based corporate restructuring project in addition to her primary role.
A CFO position would require a different level of support to provide flexibility. For example, a CFO working 4 days a week might be willing to take a 20% pay cut if the company supported her with an extra analyst or two to work directly with her. This would result in the same net cost to the organization even though it’s not traditionally the way the role is structured.
When hiring financial executives it also behooves the company to think more broadly about other potential roles the individual could take on in the future, because so many broad-based leadership roles and promotions are based on having P&L responsibility.
  • Employee Resource Groups (ERGs). ERGs are a critical offering in any organization seeking to nurture diversity. It’s important for the organization to encourage separate groups depending on the need and to engage with them separately. For example, ERGs can be formed for younger people, women at all levels across the organization, and executive women leaders. In addition, a separate ERG for emerging women leaders can support these women as they develop into subject matter experts or seek ways to apply their transferable skills to moving around the organization. Giving women this type of resource helps the organization retain top talent.
  • Changing the narrative. Most organizations don’t want to admit they lack women in leadership roles. But this narrative can and should change. In the current high-employment economy, the war for talent demands that companies compete on their employer brand for highly desirable talent. For example, BCG has successfully established a unique and compelling brand around attracting, retaining, and developing women who may be targeted by other organizations. The firm’s work around hiring women, workforce re-entry, flexibility, career pathing, and retention is a textbook example of how to do it.
What Women Executives Can Do
  1. Find a champion/sponsor and advocate for yourself. To reach the highest levels, you need an advocate with whom you communicate about your opportunities and challenges – someone who consistently champions your work with top leadership. This individual will also open doors for you and encourage you for stretch assignments.
  1. Work collaboratively/cross-functionally across the organization. Take charge of your own career path and gain exposure across the enterprise. This will give you top visibility when key openings or growth opportunities arise.
  1. Maintain a healthy network – both internal and external. Networking can never be underestimated; it is the lifeblood of a successful journey to leadership. Developing and nurturing strategic networks both inside and outside the organization is critical to advancement. In addition, mentors can be invaluable in providing advice and support.
Developing anyone for a leadership role is a lot of work, and both women and companies often face a unique set of challenges as they progress on that path. In the end, organizations competing for talent must invest in ways for women to achieve long-term success. This requires fresh approaches to recruiting, development, role structuring, and more. The fewer assumptions and the greater transparency the better. The risks are worth the rewards.

Raheela Gill Anwar is Chief Client Service & Market Strategy Leader for BPI group.