Why Female CFOs Outperform Their Male Peers

Companies looking for better financial returns should consider a female CFO.

Within the first 24 months of appointing female CFOs, companies saw, on average, a 6 percent increase in profits and an 8 percent better stock return compared with performance under their male predecessors. These women brought in $1.8 trillion of additional cumulative profits, according to a study by S&P Global Market Intelligence. The researchers looked at 6,000 companies on the Russell 3000 over the last 17 years.

One of the reasons female CFOs may be outperforming their male peers is because they’re held to a higher standard, said Daniel Sandberg, senior director of quantitative research at S&P Global and the author of the report.

“The bar is a little bit higher for females,” he said. “The result is that the male group that is a contender for an executive position is a little overfished and the female contingent is under-utilized.” Men outnumber women in the CFO job by about 6.5 to 1, the study found.

Investors including BlackRock and S&P Global have demanded more gender parity on corporate boards. Women make up half of the workforce but only control about 5 percent of the CEO jobs at the biggest companies and a quarter of board seats.

Companies that hired a woman as CFO had about twice as many female directors. After hiring a female CEO, the board tended to increase in diversity the two years after that, too, Sandberg said.

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