Taking the Next Step

Women who want to advance to the top spot in finance often need a sponsor. Here's why.

When it comes to gender diversity in finance, there is no other way to put it: women’s progress toward the top echelons has stalled. Although women make up 56% of undergraduate accounting majors and 36% of all MBAs, they fill just 9% of CFO roles at large companies, a percentage that has remained constant for several years.

But some companies have bucked the trend, like Marsh & McLennan Cos. (MMC), which has employed three female finance chiefs since 2001, and Procter & Gamble, which saw a 50% increase in its female leadership at the president level and above in the last 10 years. What are these companies doing differently from everyone else?

Over the past decade, many companies have introduced flexible work arrangements, on-site day care, and other programs to help mothers stay competitive in the workplace. No doubt that helps, but more and more diversity experts now say that cracking the glass ceiling — or removing it — requires a more overt acknowledgment that the barriers to female advancement are complex. Many of the companies known for promoting women to top finance positions have changed their policies to reflect this complexity.

At the same time, these companies have been careful about the steps they have taken and the signals those steps might send. For example, they shy away from quotas or hiring targets because such approaches could breed resentment and insecurity. Vanessa Wittman, CFO of MMC, says the key to gender diversity within the finance department is not to play favorites but to make the workplace a meritocracy by combining “an awareness of gender issues with a gender-blind mentality for promotion issues.” This more nuanced view has become increasingly common within companies where women thrive.

Somebody to Lean On

Diversity experts have long argued that women often fail to obtain high-level finance roles because they lack the connections that men make informally. In response, companies have increasingly rolled out mentorship programs to help women connect with senior executives. Such programs have been modestly successful, according to a 2006 study in American Sociological Review. The study, which reviewed gender- and race-based diversity initiatives among corporate management at hundreds of midsize and large private companies over 30 years, uncovered mixed results. Mentorship programs increased management diversity up to about 40% for women of color, for example, but they typically did not bring more white women into senior management.

The number of women CFOs in Fortune 500 companies appears to be plateauing.

More-recent studies suggest, in fact, that mentorship programs are not particularly effective for women. While some experts have contended that women are not mentored enough, they are actually mentored more than men, according to a 2008 survey of thousands of male and female MBA graduates conducted by Catalyst, a research and advisory organization working to advance women in business. But that study did find some notable differences. For one, men’s mentors were more likely to be senior executives. Men were also promoted more often after they were mentored. In a 2010 follow-up survey, Catalyst found that of the employees with mentors, 72% of men had been promoted two years later, compared with 65% of women.

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