Women CFOs at Top Companies See Gains in First Half of 2022

White men continued to win most of the chief financial officer roles at Fortune 500 and other notable companies in the first half of 2022, says a new report from Cowen Partners Executive Search. Still, 36 percent of the new CFOs were female. In addition, women of color seemed to have made progress in becoming first-time CFOs, particularly through internal promotion.

August 12, 2022 – Although the percentage of chief financial officers hired by Fortune 500 and other notable companies continue to skew male, over a third of new CFOs hired by Fortune 500 companies and companies of note in 2022 have been female (36 percent), suggesting a steady incline in female representation among CFOs in the Fortune 500, according to a new report from Cowen Partners Executive Search. This builds on the reported all-time high rate of 15 percent sitting female CFOs at Fortune 500 and S&P 500 companies in 2021.

Most CFO hires in the first half of 2022 were white (80 percent), but a significant number of CFOs hired were people of color (52 individuals), says the search firm’s newly released “CFO Movement Study 2022.” Particularly noteworthy, a high rate of women of color obtained first-time CFO roles (61 percent CFO females of color were first-time CFOs this year vs. 37 percent of their white female peers.) “This could be due to more white females having already obtained CFO roles previously, although it also suggests a positive trend of more females of color breaking into the CFO role for the first time,” said the report.

Cowen Partners looked at the 264 CFO transitions in the first half of 2022 at the Fortune 500 and notable companies as of July 22, 2022.

Among its key findings, the search firm reported that more females of color obtained their first-time CFO position through an internal promotion (33 percent of females of color) than their white female peers (22 percent of white females). “This may suggest a trend of internal promotions favoring females of color, or it may suggest more white females are leaving their jobs to obtain first-time CFO positions,” said Cowen Partners.

A ‘Staggering’ Difference

First-time CFOs of color who are internally promoted are disproportionately more
credentialed when compared to their white peers, said the report. Of CFOs of color that obtained first-time, internal promotions in the first half of 2022, the majority held an MBA (63 percent) or CPA (63 percent), whereas among white first-time, internal CFO promotions in 2022, 40 percent held an MBA and 30 percent were CPAs.

“The difference in CPA rates among first-time, internal CFO hires by race is especially staggering considering that in our entire sample, only 27 percent of CFOs of color are CPAs,” said Cowen Partners. “This may suggest that persons of color with credentials are more likely to obtain first-time, internal promotions than persons of color without the same credentials. It could alternatively suggest that people of color are over credentialed for the same role as their white peers.”

Of the 264 CFOs hired in the first half of 2022, 64 percent were male and 80 percent were white. More CFOs were male among both racial groups: Thirty-four CFOs were males of color (vs. 18 females of color), and 136 CFOs were white males (vs. 76 white females).

About one in four CFOs in 2022 received an internal promotion to the role, while the majority changed companies to obtain their CFO position (76 percent), said the report. Among those who did receive an internal promotion to CFO, the majority were white (86 percent) and male (63 percent).

Internal Promotions

A third of new CFOs hired in 2022 were first-time CFOs (33 percent), while the majority were not (67 percent). Among first-time CFOs, the majority were white (78 percent), and just over half were male (57 percent).

Eighteen women of color obtained CFO positions in 2022. More women of color CFOs held CPAs (44 percent) than their white female counterparts (33 percent), and more women of color CFOs held MBAs (50 percent) than their white female counterparts (42 percent), said Cowen Partners.

One in five new CFO hires in 2022 were persons of color (20 percent), which has gone up from 11 percent CFO diversity in 2021. Nearly twice as many CFOs of color were male (13 percent of new CFOs) than female (seven percent of new CFOs). While CFOs of color had similar CPA rates compared to their white peers (27 percent of CFOs of color vs. 28 percent of white CFOs), many more CFOs of color held MBAs (58 percent of CFOs of color vs. 48 percent of white CFOs).

Compared to their white peers, CFOs of color had lower rates of internal promotions (17 percent persons of color vs. 26 percent white) and similar rates of first-time CFO status (37 percent persons of color vs. 33 percent white). “However, there does seem to be significant differences between genders: While 61 percent of females of color obtained first-time CFOs roles in 2022, only 24 percent of males of color obtained first-time roles,” said Cowen Partners. Similarly, females of color had higher rates of internal promotions (33 percent) vs. males of color (nine percent).

First-Time CFOs

“The focus on hiring female CFOs of color has been in the news for a while and may be sparking a national trend towards higher hiring rates,” said the study.

The Evolving Role of the CFO

Given the speed at which market conditions, business strategies, and operational structures have changed in recent years, businesses are more aware than ever of the crucial role the chief financial officer plays in shaping and driving a company’s strategic direction. A just-released report by BoardEx of ‘The Role of the CFO 2022’ examines more than 1,400 CFOs who lead major publicly traded companies across 16 countries around the world. Let’s take a closer look.

Of the new CFOs in 2022, 88 individuals (33 percent) were first-time CFOs, whereas most CFO moves were non-first timers (67 percent), said the report. This group of first-time CFOs in 2022 was nearly equally divided among genders (44 percent female, 56 percent male), reflecting an even higher rate of females (36 percent) than the entire CFO group in 2022. About one in five first-time CFOs was a person of color (22 percent), and among first-time CFOs of color, there was nearly equal representation among genders (11 females of color, eight males of color). While some first-time CFOs changed employers to obtain the promotion (14 percent of the entire sample), the majority of first-time CFOs were promoted internally (19 percent). A total of 39 first-time CFOs held MBAs, representing 44 percent of all first-timers.

Related: As CFOs Gain in Stature, Succession Plans to Replace Them Falter

Sixty-four CFOs in the first half of 2022 received internal promotions, whereas most CFOs accepted roles with new companies in 2022 (76 percent). Among those who received internal promotions, the majority were male (63 percent) and white (86 percent). When comparing trends among gender and race, white males represented the most of internal promotions (58 percent), followed by white females (28 percent), females of color (9 percent), and males of color (five percent).

Of the 64 internal promotions to CFO, 27 individuals (42 percent) held MBAs. This rate was similar for internal promotions of first-time CFOs (43 percent hold MBAs).

An Ongoing Trend

Half of new CFOs in 2022 held an MBA degree, while just under a third of CFOs were CPAs (28 percent). The number of CFOs with MBAs was down slightly from 60.5 percent in 2021, as was the number of CPAs from 44 percent in 2021, said Cowen Partners. “The decline in rates of CFOs holding CPAs seems to be an ongoing trend, with a decline in rates since 2014,” said the study.

“The demand for MBAs has greatly fallen in the past decade as the value is frequently questioned by executive leaders,” said Shawn Cole, president of Cowen Partners.

“When comparing race and gender groups, interesting trends emerged: More females than males were CPAs (35 percent of females, 24 percent of males), and even more females of color were CPAs (44 percent of females of color),” said the report. “Males held more MBAs than females (54 percent of males, 44 percent of females), and even more males of color held MBAs (62 percent of males of color). Again, this speaks to the over credentialing of women and persons of color when compared to their white male peers. Only a very small portion of new CFOs hold both an MBA and CPA (nine percent), which is consistent with the 10.4 percent rate in 2021.”

Noteworthy CFO hiring announcements in the first half of 2022, as cited by Cowen Partners, included: Diana Saadeh-Jajeh at Gamestop; Rajesh Kalathur, John Deere; Liz Coddington, Peloton; Ian Borden, McDonald’s; Kate Gulliver, Wayfair; Nnenna Nnoli, One Concern; Kevin Wampler, Dollar Tree; William Kelley Jr., Tropicana; Sonalee Parekh, RingCentral; Svetlana Makhni, Marengo Therapeutics; Andre Fernandez, WeWork; and Mariela Matute of Tupperware.

Related: Executive Search Review Special Issue: Financial Services Recruiting

Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media

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