Financial skills key for female executives

Businesswomen10 December 2012

Having a financial background can greatly enhance the career prospects of women in business, according to a study funded by the ESRC and ACCA - the Association of Chartered Certified Accountants.

While many women are achieving excellent qualifications, the proportion of women appointed to board level - an appointment considered to be the ultimate goal of a corporate career - remains remarkably low at 17.5 per cent. To uncover the reasons behind this, researchers from the Cranfield School of Management interviewed executive search consultants, chairs of FTSE-listed companies and individual female board directors. They asked them about the skills that can make the path to the top easier for women.

All the interviewees agreed that 'understanding the numbers' and financial fluency are fundamental skills required of all board members. However they felt that women in particular benefitted from being financially literate, as it helped them to converse in the 'language of business' and prove their credibility.

"A financial qualification or background seems to smooth the way to the top for women, and so it is essential that corporations and career advisors highlight the benefits of this to women who are interested in business," say Dr Ruth Sealy and Dr Noeleen Doherty, the authors of the report.

Having a financial background is not all that is required, as female directors listed a combination of the right kind of background, qualifications and experience as essential prerequisites to being regarded as appropriate for appointment. In addition, networking is key; being known by as well as knowing those who are already in board roles is essential to getting on the radar.

Finally, an essential element is the motivational drive to want to be part of the top level management of an organisation. This drive is fundamental to the aspiration and the tenacity required to achieve a position at the top.

One problem is that the lack of female role models at the highest levels can have a negative impact on the aspirations and achievement of women, making them hesitant in putting themselves forward for the top roles.

To try to understand the barriers preventing more women reaching the boardroom, the UK Government commissioned a review of the current situation. The Davies Review report 'Women on Boards' makes a case for greater diversity at board level. Lord Davies called for action to ensure an increase in the appointment of women to boards. In the last 18 months there have been significant moves towards this, with the proportion of women appointed to FTSE 100 boards increasing from 12.8 per cent to 17.5 per cent.

However, more needs to be done: evidence cited in the Davies report suggests that companies with a strong female representation in top management and the boardroom perform better than those without, and gender-diverse boards have a positive impact on performance.