ACCA - The global body for professional accountants
While there was a clear message from executive search consultants and the chairmen that finance was a facilitator for a path into the boardroom, it is also clear that financial skills alone are not enough – women need to stretch their social connections, and make themselves known to those where they want to work
—Helen Brand, chief executive, ACCA

While finance is often seen as a male profession, a new report commissioned by ACCA (the Association of Chartered Certified Accountants) and the ESRC (Economic and Social Research Council) from Cranfield School of Management shows that a financial qualification or a background which demonstrates substantial financial acumen are seen as catalysts for women getting onto the boards of FTSE companies

Analysis for the report ‘Women in finance; a springboard to corporate board positions?' shows that:

  • Proportionally, women appear more successful in attaining executive roles where they have a financial background: 45 per cent of female executive directors are financially qualified and 65 per cent in total have a financial background, while 26 per cent of their male colleagues are financially qualified and 44 per cent have a financial background. 
  • More than half of new female Non-Executive Director (NED) appointments have a functional background in finance.
  • The finance function is seen by the three groups interviewed for the research - executive search consultants, chairmen and women who have made it to the board - to be more facilitative for women’s progress to the top of corporate organisations.

Helen Brand, chief executive of ACCA, says: 'What we have sought to understand through this study is why the finance function is such a springboard for women. We are seeing a time of change when it comes to women’s representation in the boardroom – since the Davies Report of spring 2011, we have seen a five per cent increase, equal to the entire increase over the previous decade. Our report shows that more than half of the women appointed in this period have a functional background in finance and the proportion is even higher for female executive directors, at 65 per cent. 

The report says that finance is the language of the boardroom and having the ability to communicate financial information establishes and builds credibility; it appears to validate women’s suitability for consideration for a board appointment – a view especially expressed by search consultants who took part in this research. 

Dr Ruth Sealy, Deputy Director of the Cranfield International Centre for Women Leaders, and co-author of the report, added: 'A certain level of financial acumen is necessary for all board directors. But for women, having a finance qualification or functional background helps to break down some persistent stereotypes about women’s competence, giving them credibility, legitimacy and a common language that allows them to join the conversation of the boards.'

Bringing together new findings, plus existing research into the differences between men and women when it comes to access to the boardroom, the report reveals that finance offers a clear career path for women, especially within professional services firms.

The research also reveals that women appear to have been more successful in reaching the most senior jobs through the function of finance and this may have implications for other functions when looking to encourage the progression of female talent. But the research also reveals that women nevertheless need to build their networks, use their social connections and use their financial acumen to progress their careers. 

Helen Brand concludes: 'While there was a clear message from executive search consultants and the chairmen that finance was a facilitator for a path into the boardroom, it is also clear that financial skills alone are not enough – women need to stretch their social connections, and make themselves known to those where they want to work.

'The adage ‘it’s not what you know but who you know’ still stands in the workplace, but for women - to get to the top they need to be motivated, driven, determined and known.'

  • Since the Davies Report of 2011, there has been a significant increase in the proportion of women appointed to FTSE 100 boards – increasing from 12.8 per cent to 17.5 per cent. This increase in women’s representation of almost five per cent in 18 months equaled that made in the previous decade. Women took almost a quarter of new appointments.
  • Only 17 of FTSE 100 companies have female Executive Directors, with three of those having two such positions held by women.
  • Most gains were made in non-executive (NED) positions which rose to 21.8 per cent and no change was made in the much lower representation of executive directors which remains at 6.6 per cent.
  • Over half (57 per cent) of new female appointments have a functional background in finance.
  • Of the 48 new female appointments made in 12 months to September, not one of them was an ED role.
  • Ninety-three FTSE companies have 55 million employees and 1,000 board positions – this means there is one board member for every 5,500 employees (source: BoardEx 2012). 
  • Of the 20 female Executive Directors, nine are current Chief Financial Officers (45 per cent) and two are former CFO, now CEOS, and two have held major finance roles in the past. 
  • This means that 65 per cent of female Executive Directors have substantial financial expertise and 45 per cent of female Executive Directors are financial qualified. 
  • This compares to only 26 per cent of male Executive Directors are financial qualified and a total of 44 per cent have financial career backgrounds.
  • So why do women fare better in the finance functions? 
  1. objective definitions of success mean less politics required.  
  2. there is minimal damage from career breaks.
  3. often HQ based, there is less extensive travel and less in the field culture.
  • Existing research shows that women taking up new board directorships appear to have substantial qualifications and managerial experience – specifically more MBA qualifications, more multiple sector experience and more international experience than their male peers.