Gap Analysis

Why diversity programs work better for women than for minorities.

To see the results of our 2007 Diversity Survey, click here.

Having finished a big presentation to the management of a Mexican resort, Oscar Munoz, the 47-year-old CFO of transportation giant CSX Corp., was passing through the pool area when he was interrupted by a white-American couple on vacation. “Can you take care of these?” the husband asked as he thrust wet, dirty towels into Munoz’s hands.

Munoz, a Mexican-American, tells the story with a laugh — he even found an appropriate spot for the towels. As the finance chief for a $9.5 billion global company, he can afford to take a generous view of his mistaken identity. Still, he’s not unaware of the implications. “Everyone has images in their mind of what to expect from different groups,” he says.

For decades, companies have been trying to modify their own perceptions and expectations of underrepresented groups. Through diversity programs, special recruiting efforts, and affinity groups, they have reached out to women and minorities in hopes of creating more parity in the upper ranks. But while women have made some progress, minorities have made little.

That’s particularly true in finance departments. While the number of women CFOs in the Fortune 500 has risen steadily, from 24 in 2001 to 38 this year, for people of color only the names have changed: six years ago CFO magazine counted 14 minority finance chiefs among those companies, the same as in 2006 (see “The Great Divide“).

At lower levels within the finance department, the disparity between women and minorities is even more dramatic. CFO estimates that 16 percent of Fortune 500 controllers are women, while only 4 percent are minorities. The numbers are similar for treasurers, with 16 percent women and 6 percent minorities. Sixty percent of respondents to a recent survey of CFO readers estimate that their finance departments have more female employees than the rest of the company; in contrast, about half surveyed say their department lags the company as a whole in terms of African-American, Hispanic, and Asian-American staff.

Few finance chiefs have a fix on why more women than minorities have moved up the corporate-finance ladder. “The only thing I can point to is that we have a great pool of women to choose from because we have been hiring talented women for the past 20 years, whereas the push to hire minorities is much newer,” says Doreen Toben, CFO of $93 billion Verizon Communications Co. And unfortunately, if the statistics from the CFO survey — which show that more than 60 percent of respondents do not consider diversity efforts a high priority — are any indication, the situation will not change anytime soon.

Power in Degrees

One reason more women than minorities have succeeded in finance is simply a function of demographics. Women make up about 50 percent of the U.S. population, while minorities total about 30 percent (male and female combined). And women are evenly dispersed (and in fact outnumber men) in nearly every state. In contrast, non-white populations are heavily concentrated in certain states, like Texas and California, and all but absent from others, like Maine and Montana, according to 2005 data from the U.S. Census Bureau.


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