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Celebrating International Women's Day: The Benefits and Advantages of Female CFOs

Historically, there is a very small percentage of women in finance- even more so than other industries. Female CFOs account for only 12% of all executives in that position, while the number of women CFOs amongst Fortune 500 and S&P 500 companies is slightly higher (15%). Although it is still a very low percentage in the grand scheme of things, the number has been increasing steadily for quite a few decades, and has more than doubled since the turn of the century.


However, studies have shown that in some areas, women CFOs actually hold advantages over their male counterparts. This is in addition to different leadership perspectives and diverse points of view- which are hard to measure, yet can be a significant advantage depending on the company and industry. In honor of International Women’s Day (March 8) here are a few of the interesting discoveries about female CFOs.


More Straightforward


According to research from New York University, Bucknell University, and a Prudential Financial Inc subsidiary, female CFOs are more likely to give straight answers. The research analyzed around 106,000 conference calls from close to 5,000 U.S. companies from 2009 to 2019, and found that female CFOs in general gave more concise responses backed by numbers- making them more straightforward and to the point. On the other hand, male CFOs tend to be overly optimistic and wordier, while using more euphemisms and clichés.

The study used a natural language computer program that was developed by Kate Suslava, one of the co-authors. It was originally developed for previous research to analyze quarterly earning calls and in order to find the different patterns for men and women. Tone and number frequency were two of the main analyzed factors, among others.


“Women bring something to the table that men might not have,” said Suslava. “Women use fewer euphemisms, they use fewer clichés, and they use less complex sentences.”

While everyone- employees, colleagues, and clients- appreciate clear and straightforward answers, this can also signal more lucrative future and long term company results.


Additional Findings

  • This study and others have shown that female executives have a more conservative investment style as well. For CFOs, this offers their company better performance results, lower risk, and superior credit terms.

  • The study also found that amongst the conference calls analyzed, female CFOs have a more conservative tone in addition to being more concise, clear, and direct.

  • Firms with female executives have lower probabilities of financial misstatements, and fraud incidents.

  • Female auditors were found to be more transparent, less tolerant of unethical behavior, and clearer in their presentations.

These differences have translated into interesting results:

  • The tone of female CFOs is more strongly correlated with next quarter earnings than their male counterparts’ tone.

  • Female CFOs’ tones also tend to be associated with more conservative future internal decision making.

In addition to tangible results, the way their surroundings are influenced and how they are responsive to their female CFOs is quite influential.

  • Shareholders are cognizant of these attributes and tend to react more strongly to the tone of female CFOs in comparison to males.

  • Investors enjoy the stronger market reaction which is a result of female CFOs’ conservative, clear, and concise presentations- often followed by more conservative managerial decisions.

While the results show some clear benefits and differences of having female CFOs and executives, the numbers are still far from backing these up. Although women far outnumber men in graduating from all levels of education- high school, bachelors, masters, and Ph.D. (58% of bachelors degree graduates are women vs 42% men), the percentage of female CFOs still falls below the 15% mark.


The question of why is often asked, but whatever the reasons behind it, we will continue to see the results and studies of more and more organizations being led by female CFOs. In the meantime, understanding the advantages and strengths, is the first step in continuing the progress of the past few decades. Time will tell how it plays a role in long term results.