March was a great month for women in finance. Last week, pharmaceutical giant Merck tapped Caroline Litchfield as its new CFO, while media company Condé Nast named Jackie Marks to lead its finance function. And the appointments don’t stop there: Earlier in the month, food corporation Cargill announced Jamie Miller as finance chief, making her the first female CFO in the business’ 156-year history.
This uptick in appointments isn’t just good for representation—it’s good for the bottom line. According to a 2019 S&P Global Market Intelligence report, firms with female CFOs are more profitable. They generated excess profits of $1.8 trillion over the course of the 17-year study, and organizations that named women to top finance roles saw a 6% increase in profitability and 8% larger stock returns during their first two years at the helm.
“Companies with diverse leaders in their functional C-suites, including CFOs, generally produce higher total shareholder return,” says Phil Murphy, a consultant at Spencer Stuart, who leads the firm’s financial officer practice in North America. “There’s growing evidence that diverse leadership teams outperform from a shareholder return perspective.”
While the economic effects of the Covid-19 pandemic will undoubtedly pose challenges to these three finance chiefs, each is poised to succeed. Litchfield will assume her role as Merck executive vice president and CFO on April 1, succeeding CFO Robert M. Davis upon his promotion to company president and CEO. Prior to her appointment, Litchfield served as Merck’s treasurer, where she was responsible for treasury, tax and investor relations. Since joining the company in 1990, she’s held several positions, including leading finance for its largest business, Human Health, from 2014 to 2018.
Litchfield has her work cut out for her: The estimated negative impact of the Covid-19 pandemic on the New Jersey-based company’s pharmaceutical revenue is approximately $400 million, according to Merck’s fourth-quarter reporting. Revenue totaled $12.5 billion in the fourth quarter, up 5% from the $11.9 billion reported year-over-year. Merck expects its 2021 global sales to land between $51.8 billion and $53.8 billion. In a statement, Merck Chairman and CEO Kenneth C. Frazier, who will retire in June, said, “Caroline’s appointment as our next CFO is the result of a combination of factors—most importantly, Caroline’s financial expertise, remarkable track record, and leadership—as well as our commitment to developing talent and our succession planning for leadership roles.”
Of these recent appointments, Litchfield was the only internal promotion. Condé Nast’s Marks, who began her new job on Monday, joins after having served as head of finance at asset management firm Mercer since 2018. But like Litchfield, she’s a finance veteran: Her 20-plus years in the function have found her serving as the CFO of enterprise technology and operations at Thomson Reuters and in various other finance roles at the company, including CFO of Reuters News. She began her career as an associate at Siemens AG.
Marks takes over in the wake of what CEO Roger Lynch told The Information was a “very, very difficult year” for Condé Nast as brands pulled back on ad spend due to the pandemic. Last May, CNBC reported that the company, which owns magazines including Vogue, Vanity Fair, GQ and The New Yorker, laid off nearly 100 U.S. employees and furloughed 100 more, in addition to reducing hours for some workers, in response to the economic effects of Covid-19. In her new role, Marks will be instrumental in the business’ recovery.
When Miller takes over at Cargill on June 1, she’ll be making history as the business’ first female CFO. She’s used to breaking barriers, becoming GE’s first female finance chief in 2017. After 13 years at the conglomerate, during which time she also served as president and CEO of GE Transportation, she succeeds David Dines, who will be retiring in September.
As the pandemic disrupted consumer behavior and supply chains, Cargill adjusted its manufacturing operations and supply chains to keep up with changing demands. Flexibility and agility will be key to Miller’s success as Covid-19 continues to affect the industry. “The food system is dynamic and evolving,” said Dave MacLennan, Cargill chairman and CEO, in a statement. “We know that to feed a growing population in a safe, responsible and sustainable way, we need innovative leaders like Jamie to guide our growth and maintain our strong balance sheet.”
Other recent hires include Sarah-Marie Martin, who has been named the first finance chief of Los Angeles-based baby food company Yumi; Maria Bowles, who has been tapped to lead finance at Michigan medical group IHA; and Destiny Hilty who has been promoted to CFO of marketing company Eleven 11 Solutions. At 29, Hilty will be the youngest female finance head in Washington state.
The appointments are encouraging, but women still have a long way to go. “While we’ve observed stronger female representation in the CFO population over the past 15 years, the statistics are still quite low,” Murphy says. The percentage of female CFOs grew slightly in 2020, according to executive recruiting firm Crist Kolder Associates’ annual volatility report. In 2020, 13.4% of S&P 500 and Fortune 500 companies had female CFOs, compared to 13.2% in both 2019 and 2018 and a dismal 8.7% in 2010. Of the 674 CFO positions at these companies, just 90 were helmed by women, a sharp contrast to the 500-plus men serving in the role.
“I do think there will be greater female representation in the future,” Murphy says. “It starts with an honest self-assessment by organizations as to where they are with respect to diversity, and it requires leadership from top boards and from CEOs to promote awareness and make it a key focus and a priority. Increasing gender diversity of CFOs cannot just be a priority that’s driven by HR leaders, it really needs to be driven from the top.”