The future of finance is more diverse

While the path to becoming a finance chief looks very different than it did just a few years ago, the field continues to be predominantly white men. According to a study by executive recruiting firm Cowen Partners, of the 264 CFOs hired by “Fortune 500 and notable companies” in the first half of 2022, 80% were white and 64% were male.

But with an overall push toward more diversity in the business world, universities and industry groups are focused on improving the pipeline of candidates for future CFO and finance sector roles, to make sure people from historically marginalized and underrepresented groups are included. And some have started to see the results of these multi-year concerted efforts.

According to recruiting firm Crist Kolder Associates’s annual Volatility Report for 2022, of 677 CFOs at 2022 Fortune 500 and S&P 500 companies, 55% came from public universities and 45% came from private universities, compared to 53% public and 47% private in the 2021 report.

MBA + DEI. Stanford University produced 10 CFOs on the list, and at Stanford Graduate School of Business, 51% of US and permanent residents in its 2024 MBA class are people of color. Lori Nishiura Mackenzie, lead strategist for diversity, equity, and inclusion at Stanford Business, said her department focuses a lot on outreach, to try to make its programs more accessible to a broad range of people.

Stanford’s program is part of the Consortium for Graduate Study in Management, a nonprofit focused on diversity, equity, and inclusion in graduate business schools, and partners with organizations whose aim, Mackenzie said, “is to diversify the pool of folks that enter the MBA program who are from underrepresented historically marginalized groups.”

Mackenzie acknowledged that the cost of graduate business programs can be a significant barrier for many prospective students from underrepresented groups, so in addition to fee waiver programs, scholarships, and other forms of traditional financial aid, it has programs such as its Building Opportunities for Leadership Diversity (BOLD) Fellowship Fund.

“If you look at someone’s finances, what you might not realize is that they might be funding an extended family,” she said. “So we started the BOLD Fellowships, which enable students who, perhaps on paper, look like they can afford to use their savings or whatever financial resources they have to pay for education.” Such students might have obligations which may not be covered by traditional financial aid.

“We’re really committed to ensure that there are as few barriers to applying and being part of our community as possible,” Mackenzie said.

The accountant’s apprentice. The Crist Kolder report also found that today’s CFOs are more likely to hold an MBA than a CPA. That certainly doesn’t mean accountants are going away altogether, but these days, number-crunching accounting skills aren’t always seen as a requirement for a finance chief. Therefore, the Association of International Certified Professional Accountants has a multi-year strategy focused on getting more students into the accounting profession.

Tom Hood, EVP of business engagement and growth at the AICPA, told CFO Brew that the organization hears from senior finance leaders of top companies that a talent shortage is the “No. 1 issue they’ve been facing now for more than a year and a half.” The AICPA came up with a potential solution: an apprenticeship program.

“The idea of professional apprenticeship is a lot more recent, but it is a major thing,” Hood said. “Finance is transformed; it’s a different skill set than it was even five years ago, right?” In November, the AICPA partnered with the US Department of Labor for its new Registered Apprenticeship for Finance Business Partners program, and announced the first three companies participating: Liberty Bank, Aon, and HP.

“Registered apprenticeship is a proven model and solid investment for employers seeking to develop a talented and diverse workforce,” US Labor Secretary Marty Walsh said in a statement. “Today’s signing reflects the department’s continued commitment to expanding registered apprenticeship programs in high-growth and emerging industries.”

Joanne Fiore, VP of professional media, pathways, and inclusion at the AICPA, said the structure of the apprenticeship program was key; it requires employers to provide on-the-job support, training, and mentorship.

“It’s a very structured program, flexible but structured,” Fiore told CFO Brew. “The employers, as you can imagine, [are] highly motivated to make this successful.” —KL