Why Diversity is important
The CFO and their finance function are operating in a new and ever changing world. Organisations face almost unprecedented uncertainty, and the business environment is more complex, and evolving at a pace not seen before. In this brave new world, the finance function extends well beyond its traditional capabilities. Growing regulation has led to increased specialisation and complexity of some finance roles as strong technical skills are required. Furthermore, the growing role of finance as a Business Partner means many finance roles are increasingly orientated towards commercial and decision support with finance playing a central role in providing actionable insight that facilitates effective strategic decision making. As a result, the skills and experiences that finance professionals need to bring to the table are increasingly diverse.
In recent conversations, one of our clients (a technology firm who are well advanced on their digital finance journey) explained there has been a move towards recruiting finance business partners with heavy commercial creativity who are willing to challenge the status quo and capable of thinking outside of the box when it comes to approaching business problems. This prompted a debate around whether finance professionals are best suited to these roles on every occasion and whilst for the time being this is more often the case than not, they do envisage a future where candidates from a commercial background rather than a finance background take on these business partnering roles, further diversifying the blend of skills in the finance function.
It is not just diversity of skills that are required; it’s also diversity of ideas that are important to the finance function in a fast paced, ever evolving environment, where the ability to innovate, respond swiftly and challenge deep-rooted viewpoints has become essential for enhanced performance. There is a growing recognition that a wide range of perspectives and experiences is critical to the success or otherwise of businesses. A McKinsey report in 2018 found that firms in the top quartile for gender diversity are 21% more likely to enjoy above average profitability than firms in the bottom quartile. Indeed there is a growing recognition that a wide range of perspectives and experiences is critical to the impact finance can have on driving business performance.
We have seen this in the hiring patterns of our clients over the last 12 months in particular, as they become increasingly likely to make out-of-sector appointments and address diversity imbalances in their teams.
- So far this year, 55% of our Finance Director appointments have been ‘in sector’ hires. This compares to 63% in 2018.
- So far this year, 40% of our senior finance appointments have been female. This compares to 32% in 2018.
- We have seen a 45% uplift in demand for our female talent pipelining service where we pipeline ‘next generation’ female talent. This service line has been especially popular in the construction, engineering and professional services sectors.
At a time when disruptive innovations and new business models are posing a threat to incumbents in the majority of industries, diversity of thought and experience are vital. By bringing individuals with fresh ideas into the finance function, companies will have a better chance of re-inventing themselves and in doing so improve their chances of staying ahead of the competition. The finance function of the future in top performing businesses is likely to be very different and more diverse in every sense than the finance function of today.
Wayne Poulton, Director, Finance
Norman Broadbent Solutions
DDI: +44 (0) 20 7355 6941