Do women make better CFO's?

April 10, 2022

“Based on an analysis of earnings calls from 2,800 U.S. firms over 10 years, despite far fewer women holding top financial positions, women chief financial officers (CFOs) ‘verbally outperform male finance chiefs.’”

—Sudy co-author Bucknell Freeman College of Management Professor, Kate Suslava

The gist:

The study that summarizing analysis of approximately 105,000 corporate earnings calls from 2009 through 2019, revealed that:

• “Women CFOs are more concise, more conservative in their tone, more straightforward and use more numbers to illustrate their point,” Suslava said. And,

• Women CFOs use what we call ‘careful verbal behavior,’ and, when

• “We study fog index, which measures obfuscation — language complexity and use of euphemisms and clichés — and it looks like women obfuscate less and use more straightforward language…They use less complex language when they talk, so they may be more straightforward.”

On the flip side, she said, the study found that,

“Male CFOs generally tend to be overly confident and optimistic, “muddy the water with euphemisms and clichés, and use more complex words and sentences.”

And in an interesting Study point:

“ We also looked at men who behave like women to see if those behaviors benefit men as well,” Suslava said.

“We found that for men CFOs who behave more like women CFOs, their stock prices go up more than men CFOs who behave less carefully.

Therefore, “the market rewards careful verbal behavior for both genders.” And this is “probably good news for women considering finance careers,” because, “The gender bias is just huge (in finance),” she said.

The message to women is that you can do it, and you can be adding a lot of value to a company if you go into this industry, stick around and don’t give up.”

While some say the percentage of women CFO’s is so low that, women are just having to perform at much higher levels. But Suslava concludes that, ““The key point is that they’re different. There is a gender difference, and this is what diversity is about,” she said. “The idea is that when you put diverse people together, they’ll generate diverse ideas.”

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