Exclusive: Female CFOs generate greater returns for investors
Female chief financial officers (CFOs) in the UK are routinely outperforming industry benchmarks, according to a new study shared exclusively with City PM.
According to finance management platform OneStream’s Glass Chair study, UK companies led by female CFOs have delivered an average total return 1.5 per cent above industry benchmarks.
That figure grows to 3.2 per cent for Europe-based organisations and 4.7 per cent for global healthcare companies compared to industry benchmarks.
Moreover, according to the study, UK companies saw an average 13 per cent improvement in total shareholder return after appointing a female CFO, compared to the performance under
their previous CFO.
Notably, this uplift was observed even when firms continued to lag behind industry benchmarks overall.
Certain struggling firms achieve an annualised return of 4.6 per cent upon appointing a woman, boosting their yearly performance.
Aisling Harney, senior director of international finance at OneStream said: “Our research shows that companies led by women CFOs often outperform their peers, particularly when these leaders are appointed to under performing organisations.”
“Their breadth of experience and strategic insight can be game-changing.”
Barriers to climbing the ladder
According to the study on average, it takes a woman 18 years to reach the role, three years longer than their male counterparts, spiking to 20 years when considering just FTSE 100 companies.
Female financial officers cited structural barriers as key to slowing their progression, regardless of their ability to fill a CFO role.
This included economic downturns, complex workplace politics, limited access to mentorship and trouble balancing work and home life.
Harney said, “These delays mean businesses are missing out on transformative leadership when they need it most.”
However, 65 per cent of women CFOs said automation, particularly AI, is enabling new expertise to enter the role.
In addition, 75 per cent of women finance leaders identify digital literacy as an important skill for the future CFO role
Wide ranging experience
During their time climbing the ladder, women are able to absorb a range of knowledge due to changing roles and companies more frequently.
Nearly 40 per cent of female CFOs have backgrounds that reflect a non-linear career trajectory, working outside of the core finance sphere that many financial executives remain in throughout their career.
This provides a broader enterprise-wide perspective as well as deeper understanding of company operations, alongside financial strategy and planning skills that are crucial for the role.