Women CFOs Reach Record Level in U.S. as Top Job Remains ElusiveSarah Frier and Carol Hymowitz
The number of women taking the role of chief financial officer increased 35 percent at big U.S. companies in the past year, putting more female executives in the top ranks of management after decades of slow gains.
There were 54 women serving as CFO among Standard & Poor 500 Index companies as of last month, up from 40 a year earlier, according to data compiled by Bloomberg Rankings. While men still account for almost 90 percent of CFOs in the index, the growth marks progress for female managers at a time when there’s been little change at the chief executive officer level.
Women are now overseeing the finances at such high-profile companies as JPMorgan Chase & Co., the largest U.S. bank by assets; the newspaper chain Gannett Co.; and Time Warner Cable Inc., the second-biggest U.S. cable company. The trend comes at a time when the CFO job itself is becoming more critical. The Sarbanes-Oxley Act of 2002, which required companies to be more transparent about their finances, thrust CFOs into the limelight and forced them to work more closely with chief executives.
“It isn’t the old green-eyeshade accountant’s job it used to be,” said Matt McGreal, head of the corporate-governance practice at the executive-search firm Crist/Kolder Associates in Hinsdale, Illinois. “The CFO is one of the few officers of corporations who has a view of the entire organization.”
CFOs typically have experience in accounting, risk management and treasury -- roles where performance can be measured in numbers, said Ann Marie Petach, who holds the position at New York-based BlackRock Inc., the world’s biggest money manager. That has worked in women’s favor, helping them gain promotions by objectively showing competence, she said.
“I believe that women do succeed the best in true meritocracies,” she said in an interview.
Still, making the jump to CEO can be difficult. Just 21 of the CEOs at S&P 500 companies are women, or 4 percent -- a figure that’s barely budged in the past five years. Taking the top job usually requires experience running a previous business or at least a large division. That’s a hurdle for some women, though CFOs are increasingly arriving at the position with more operational experience.
Chevron Corp.’s finance chief, Patricia Yarrington, was president of Chevron Canada earlier in her career. She also served as a treasurer and vice president of policy and government for San Ramon, California-based Chevron, the second-largest U.S. energy company.
Currently about 15 percent of CEOs at companies in the index were CFOs at some point in their careers, said Joshua Wimberley, who runs Korn/Ferry International’s search business focused on financial officers. PepsiCo Inc. CEO Indra Nooyi, one of the highest-profile female leaders, took the job after more than six years as CFO. She previously oversaw strategy for PepsiCo, ASEA Brown Boveri and Motorola Inc.
Gannett’s CEO, Gracia Martore, also climbed the corporate ladder through the CFO job. Victoria Harker serves as the McLean, Virginia-based company’s current finance chief.
“It’s not uncommon these days to see CFOs who’ve had experience running a business or who get it after they’ve been CFO,” Wimberley said. “That’s essential for moving from the CFO to the CEO spot.”
In taking more CFO positions, women are stretching beyond their longtime strongholds in less analytical fields -- a move that bodes well for advancing to the CEO job, said Ilene Lang, president of Catalyst Inc., a New York nonprofit that tracks women in leadership.
“This is not human resources or communications -- it isn’t one of your traditional women’s roles,” Lang said. “In the last decade, the CFO role has become a stepping stone to the CEO’s office.”
Even so, the slow pace of advancement frustrates some female CFOs. Irene Esteves, CFO of New York-based Time Warner Cable, said she’s disappointed there aren’t more women with her job title.
When she graduated from college in 1981, the contemporary women’s rights movement was already more than a decade old.
“I thought by the time I was CFO of a public company, there’d be so many more than 10 percent,” she said.
In all, women held 14 percent of all senior-executive jobs last year, according to Catalyst. It found that 28 percent of Fortune 500 companies in 2012 didn’t have any women in C-suite positions at all -- a list that includes Apple Inc., Exxon Mobil Corp. and Berkshire Hathaway Inc.
Karen McLoughlin, CFO at Cognizant Technology Solutions Corp., mentors female employees through the company’s Women Empowered program.
“The question for me is: Why does it take so long?” she said. “And is there something at the organization getting in the way?”
Time Warner Cable’s Esteves worked as CFO at several smaller companies before taking her current position in 2011. In one former job, she had to overcome her bosses’ reluctance to send her overseas, where she’d be working with companies unaccustomed to female executives. Esteves successfully argued that being a woman could be an advantage.
“I said, ‘If I’m going to be negotiating for the company, wouldn’t it be great if the person on the other side didn’t know how to handle me?’” she said. “They agreed with me.”
At Time Warner Cable, the CEO and chief operating officer both previously held CFO jobs, signaling that there’s a path for advancement. There also are several female executives on her team.
“It was nice to walk into an organization where there’s already plenty of women in the senior leadership team,” she said. “There’s a good amount of diversity here, and that tends to beget more diversity.”
She credits some of her success to her son, who’s now in his 30s. When he was 10 years old, she was working long hours and traveling around the world. She came home one night and overheard a conversation he was having with a friend.
“The kid said, ‘Don’t you think it’s terrible that your mom’s gone all the time?’” she said. “He was really quiet and thoughtful and said, ‘Well, I don’t want to be poor.’ It’s the way he would have answered if it were his father.”
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