45 Women CFOs In 2257 NSE-Listed Firms: Diversity A Distant Dream?

New data paints a sobering picture of gender diversity among Chief Financial Officers (CFOs) in India. According to Primeinfobase, a leading corporate data aggregator, only 45 of the 2,257 companies listed on the National Stock Exchange had women in the CFO or Director-Finance role. This represents a mere 2%, highlighting a long way to go in achieving equitable representation at the top echelons of corporate finance.

This figure marks a slow increase from previous years, with 24 women CEOs in March 2019 and 31 in March 2022. However, the pace of progress remains glacial, raising concerns about entrenched biases and systemic barriers hindering women's ascent to leadership positions.

“On one in every three CFO search mandates, there is an explicit ask for a woman professional. However, it is essential to recognise that the talent pipeline varies across industries,” said Rahul Kakkar, partner, and India head, of CFO Practice, at the leadership advisory and senior executive search firm Korn Ferry.

"The data showcases a persistent underrepresentation of women in CFO roles," emphasizes Abhinav Sharma, Partner at PSD & Associates, a chartered accountancy firm. 

Some factors that contribute to this gap include:

• Unconscious bias: Traditional stereotypes associating finance with "masculine" traits like aggressiveness and risk-taking can create unconscious bias against female candidates.

• Lack of mentorship and sponsorship: Women often lack access to strong networks and mentors who can guide them through the corporate ladder and champion their candidacy for senior roles.

• Work-life balance challenges: The demanding nature of CFO positions, typically requiring long hours and travel, can create challenges for women juggling work and family responsibilities.

Highlighting the importance of hiring women professionals as CFO, Atul Vohra, managing partner at leadership search firm Transearch India says, “In nearly 30% of our CFO mandates it is imperative to identify and hire a woman professional, Finance is a function in which women have excelled and from the ethics and diligence perspective to women are more respected.”

Some recent appointments like that of Preeti Gupta Mohanty, who recently became the CFO of Schneider Electric India, Suman Hegde of Jubilant Foodworks, and Aparna Iyer at Wipro are rare exceptions. Preeti attributes her success to her "resilience, focus, and willingness to take calculated risks." However, their story remains one of few, highlighting the need for wider systemic changes.

Initiatives accelerating push

Several initiatives are underway to address this disparity. The Securities and Exchange Board of India (SEBI) has mandated listed companies to disclose the number of women directors on their boards, aiming to promote board diversity. Additionally, industry associations and NGOs are organizing mentorship programs and workshops to equip women with the skills and networks needed to advance their careers.

There's growing pressure from both board members and investors to increase gender diversity in top leadership positions. This push is driven by two key factors: 1) The importance of gender diversity for a company's ESG (Environmental, Social, and Governance) score, and 2) the increasing interest of investors in allocating funds to companies that prioritize social responsibility.

Despite these efforts, achieving meaningful progress requires a multi-pronged approach. Companies must implement robust diversity and inclusion policies, actively seeking qualified female candidates for senior finance roles. Unconscious bias training and mentorship programs can create a more supportive environment for women to thrive. Additionally, addressing work-life balance challenges through flexible work arrangements and childcare support can ease the burden on working mothers.

Ethical Imperative

The underrepresentation of women in CFO positions not only reflects an ethical imperative for equitable representation but also holds back companies from harnessing the diverse perspectives and talent pool that women bring to the table. As research suggests, companies with greater gender diversity in leadership tend to outperform their peers financially.

As India strives towards a more inclusive and equitable society, ensuring fair representation for women in corporate leadership roles like CFOs is not just a matter of social justice but also a sound business strategy. By dismantling the glass ceiling and fostering an environment where talent thrives regardless of gender, companies can unlock their full potential and build a more prosperous future for all.