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Seize the DEI: How CFOs can help implement strategies around diversity, equity, and inclusion

CFO Insights

In this edition of CFO Insights, we’ll explore how finance leaders can help make DEI a priority, from raising the appropriate questions about a potential acquisition to choosing financial institutions for partnership.


It’s a finding that suggests a growing awareness and, perhaps, tangible progress: 72% of CFOs say that their company has a formal diversity, equity, and inclusion (DEI) program.

That’s according to Deloitte’s North American CFO Signals™ survey for the second quarter of 2021,1 an increase from the 67% who responded similarly in the first quarter 2019 survey.2 The second quarter 2021 survey also found that 60% of CFOs represented companies that either have or plan to have a defined budget for DEI in the next year. It’s likely that societal realities and pressures, combined with employee and stakeholder activism, have elevated DEI’s importance, solidifying the case that DEI is not only becoming an important focus area, but is also vital to the future growth of a company.

Specifically, diversity can also play a part in creating long-term value for shareholders. In fact, a Wall Street Journal analysis found that the 20 most diverse companies in the S&P 500 have an annual stock return of 10% over five years, compared to the 4.2% achieved by their least diverse counterparts.3 Such findings may be one aspect to help motivate CFOs to assess what more they can do—beyond supporting relevant budgetary decisions—to help their companies implement DEI-related strategies and programs.

The CFO Signals survey for Q2 2021, which drew 138 responses, asked finance chiefs to name “the one thing you plan to do to make the greatest impact on advancing DEI.” Their responses centered on reducing biases in recruiting, hiring, and development practices, including diversifying their teams and modeling inclusive leadership (see section below, entitled “The six signature traits of inclusive leadership”). Another high-ranking response among CFOs: setting DEI-related goals (not to be confused with quotas) and metrics.

Still, CFOs may be able to do much more to support DEI efforts long term. In this edition of CFO Insights, we’ll explore how finance leaders can help make DEI a priority, from raising the appropriate questions about a potential acquisition to choosing financial institutions for partnership. In addition, we’ll ask: How can policies and procedures promote diversity? What does it mean to improve supplier diversity? And what can finance leaders do to prepare for providing DEI data to investors, regulators, and other stakeholders?

Enabling workforce equity

Given its company-wide impact, the finance function is positioned to enable equity activation across the entire enterprise. To make progress against their DEI goals, companies typically start by focusing on their workforce. As such, finance leaders can support and drive accountability for activities, such as planning and forecasting, compensation and benefits, and investments in workforce experience programs. In the Q2 2021 CFO Signals survey, 45% of respondents chose decisions related to recruiting and hiring as the one thing they planned to do to make the greatest impact on advancing DEI.

Some companies have already rethought their hiring processes as a result of the COVID-19 pandemic. Many have acquired the ability to hire workers via computer monitor, for instance. Organizations that have embraced virtual talent acquisition programs and remote work policies can now look for talent in a variety of geographies. Even finance organizations and functions, which have historically required co-location for workers, have learned to operate virtually (see “Closing time: Preparing for the next virtual financial close,” CFO Insights, May 2020) and now have opportunities to expand their teams with a focus on diversity, equity, and inclusion—that is, hiring workers with different backgrounds, ensuring that processes like onboarding and compensation are fair, and working to foster a sense of belonging.

Such opportunities are reflected in the recent CFO Signals survey. Elaborating on what they planned to do to advance DEI, CFOs’ written answers ranged from “ensure a strong, diverse talent pipeline is in place across all levels and track and measure on progress” to “make inclusion an important part of decision-making in recruiting and internal development programs.”

Still, companies that decide to permanently adopt hybrid structures may face a new set of DEI-related challenges. Will opportunities for visibility and advancement be made available for those who may find it more efficient and easier to work from home? Will organizations reward and invest in individuals who opt to work flexible hours because they have caregiving responsibilities? How will managers be held accountable to continually attend to inclusion dynamics, such as counteracting unconscious biases when making decisions about which employees have the option to work remotely or come into the office?

In the meantime, some finance leaders may still have work to do within their own functions. Respondents to the CFO Signals survey for Q2 2021 revealed that among their direct reports who will be CFO-ready within three years, an average of 0.89 are minority, while an average of 2.09 are non-minority direct reports (see Figure 1 in PDF). Both averages reflect an increase from the first quarter 2019 CFO Signals report, when an average of 0.20 minority direct reports and 1.26 non-minority direct reports were considered CFO-ready in three years.4

As for the number of women who would be CFO-ready in three years, there is an increase from an average of 0.40 in 2019 to an average of 1.23 in the second quarter of 2021. That compares to an average of 1.66 for men in the 2021 survey, which is up from 1.06 in the first quarter of 2019.

To accelerate preparedness among up-and-coming leaders, the finance function may want to consider making an organizational investment in offering mentoring opportunities, whether pairing more experienced employees with newer counterparts or using a peer-to-peer format.

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DEI’s reach

Of course, successful DEI initiatives encompass more than the demographics of the workforce, as some CFOs are clearly aware. In the 2021 survey, one finance executive committed to “speaking up and championing DEI causes and embedding [DEI] within our corporate strategy,” while another planned on “driving discussions throughout the organization—creating a full strategy.”

A commitment to advance DEI challenges organizations to rethink their actions and behaviors, affecting external decisions about relationships and alliances in the marketplace and society.5 And to build an equitable future, leaders should activate the full breadth of their control across all parts of their organizations: from relationships to products, services to spend, governance to external interactions. Such a company-wide effort may require CFOs and other business leaders to apply focused energy.

Consider that in the Q2 2021 CFO Signals survey, 61% of CFOs indicated that their DEI practices are embedded in their talent brand. Yet only 30% said DEI practices are a substantial component of their customer brand/strategy (see Figure 2 in PDF).6 This highlights a clear opportunity for CFOs to help promote DEI.

Ultimately, DEI should be embedded in the organizational culture, creating an appropriate context for setting priorities and making choices. Organizations can spur equity both within and outside of the business by exerting their leadership across their primary spheres of influence: workforce, marketplace, and society. Each sphere, in turn, includes multiple activators of equity—key areas of activity and everyday choices, such as talent advancement, products and services, and standards and policies—through which organizations can take specific actions.

Within the enterprise, such actions may include the following:

  • Crafting company goals: It’s crucial to have short- (monthly), medium- (quarterly), and longer-term goals for improving representation across the organization. Such reviews can help motivate management, including within the finance function, to ensure relevant and on-going activities are in place. Consider the OneTen coalition, which is composed of companies that have committed to creating one million new careers for Black Americans by 2030.7 Member companies, including Deloitte, have pledged to take bold action to implement equity in hiring, retention, and advancement. And to measure progress, they will be looking at specific areas, such as reducing promotion gaps, improving pay equity, and boosting the diversity of those who advance to the job-interview stage.
  • Implementing incentives: Holding individuals accountable for DEI-related activities is often part of working toward any strategically important business goal, from growth targets to market-entry aspirations. Despite DEI’s complexity, the use of different levers within the rewards structure will likely ensure that the effort maintains momentum. For example, finance leaders may want to tie DEI goals to executive compensation, either through bonuses or long-term incentives. Among surveyed CFOs in the Q2 2021 report, 50% noted that DEI goals are linked to performance evaluations. Several wrote about the need to “incorporate metrics into talent reviews” and “hold the team accountable.”
  • Signaling seriousness: CFOs can also reinforce the importance of DEI initiatives by joining an executive-level DEI committee and vocally and practically supporting the chief diversity officer. This can be a signal to the organization that DEI is not simply another issue for HR to handle. Establishing such oversight can also inform customers and suppliers—as well as employees—that top management is determined to enable transformative change. In the Q2 2021 CFO Signals survey, in fact, some CFOs noted that their companies had “created a DEI committee” or “implemented a D&I council” or “set up a senior DEI leader directly reporting to office of CEO.”

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Unique position of CFOs

The fact that 60% of CFO Signals respondents in the 2021 survey reported that their companies have a defined budget for DEI is an indication that CFOs are already part of the effort. But given the distinct role they occupy—enabling them to exert a strong influence internally and externally—they are well-positioned to offer support on many levels. Surveyed CFOs wrote of plans “to invest in DEI investment managers” and to “include a minority bank in [their] revolver.”

To consider how DEI goals and considerations could impact real-world financial decisions, CFOs might ask the following questions:

  1. Is DEI part of our criteria for choosing partners? Given their oversight of treasury and tax, CFOs have great insight into the broader ecosystem. In addition to helping advance DEI throughout the enterprise, CFOs may find it advantageous to choose financial partners who also value DEI. Companies that nurture a diversity of opinions and approaches may also be more valuable as business partners, providing input that helps the business sharpen its competitive advantage. High-growth brands (defined as those with annual revenue growth of 10% or more), for example, are more frequently establishing key performance metrics for DEI objectives than their lower-growth competitors.8
  2. Are we doing all we can to promote diversity within our supplier base? The effort starts with knowing the makeup of suppliers, as well as their practices (see “Targeting procurement: Why CFOs should take direct aim at indirect spend,” CFO Insights, September 2021). How is our spend divided among different types of suppliers—and are there systems in place to track any changes? Does the procurement function drive purchasing decisions with DEI in mind? Beyond choosing suppliers, companies can advise those that need to elevate certain capabilities—to meet customers' rigid cybersecurity requirements, for example—to serve bigger and more sophisticated companies. To aid already established suppliers in becoming even more competitive, finance teams may need to provide additional infrastructure, industry, and functional expertise, as well as training and capability development. Such suppliers could also benefit from shadowing programs, self-auditing processes (e.g., benchmarks against other suppliers), and tools and templates (e.g., planning, quality, analytics dashboards). Growing suppliers would likely welcome networking opportunities with business unit leadership.
  3. Are we providing fully detailed diversity data? As of August 2021, the Securities and Exchange Commission approved NASDAQ rules requiring companies to reach specific race and gender targets for boards.9 Given their experience, CFOs can lead the way as to what needs to be included in financial disclosures to key stakeholders and meeting DEI-related standards as set by regulators. For example, is it sufficient to provide aggregate information, or do companies need to share director-specific information? And what about disclosures regarding human capital management, such as turnover? In addition to regulators, investors are increasingly focused on companies having such goals. Companies that collect and share such data may find it useful in setting goals or increasing accountability.

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A multiplicity of benefits

Within the finance function, CFOs should make sure their managers work to assemble diverse teams—for the same reason the company may want to do so. More diversity and improved inclusivity will likely enable finance to approach problem-solving from a broader perspective, leading to such tangible outcomes as products with widened appeal.

Tangible progress, however, takes time. As of 2020, an analysis of public filings found 200 companies with greater than 40% diversity (defined as women and minorities) on their boards, quadruple the number that had reached that point in 2010.10

DEI isn’t a skill that can just be taught over a few educational sessions. It represents a new perspective, and one that some employees, including CFOs, may need time to absorb. Making a commitment to DEI, after all, is only the first step toward transforming the everyday actions and decisions that can make it a reality.

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The six signature traits of inclusive leadership

Core aspects of leadership, such as setting direction and influencing others, may be timeless. But during a time of increased diversity in talent, markets, customers, and ideas, inclusive leadership may be just as vital.

Practicing inclusive leadership requires the ability to personalize individuals, understanding and valuing the uniqueness of their diversity, while also accepting them as members of the group, as well as leveraging the thinking of diverse groups for smarter ideation and decision-making. To achieve these aims, highly inclusive leaders demonstrate six signature traits that are reinforcing and interrelated:

  1. Commitment: Highly inclusive leaders are committed to diversity and inclusion primarily because these objectives align with their personal values and because they believe in the business case. Being inclusive takes time and energy, two of a leader’s most precious commodities. So what motivates a leader to expend these resources in the pursuit of diversity? Clearly, an understanding of the commercial imperative is critical. But our research,which included interviews of leaders and subject matter experts, as well as a survey of more than 1500 employees, found their primary motivator to be alignment with their own personal values and a deep-seated sense of fairness.
  2. Courage: Highly inclusive leaders challenge the status quo, and they are humble about their strengths and weaknesses. The courage to speak up is a central behavior of an inclusive leader, and it occurs at three levels: with others, with the system, and with themselves.
  3. Cognizance of bias: Highly inclusive leaders are mindful of personal and organizational blind spots, and self-regulate to help ensure “fair play.” They are very self-aware and are able to acknowledge that their organizations, despite best intentions, have unconscious bias that needs to be addressed.
  4. Curiosity: Highly inclusive leaders have an open mindset, a desire to understand how others view and experience the world, and a tolerance for ambiguity. Their thirst for continual learning helps drive attributes associated with curiosity—open-mindedness, inquiry, and empathy. For inclusive leaders, asking questions and actively listening are core skills that are key to deepening their understanding of perspectives from diverse employees.
  5. Culturally intelligent: Highly inclusive leaders are confident and effective in cross-cultural interactions. For such leaders, the ability to function effectively in different cultural settings is about more than just having an understanding of cultural similarities and differences. Inclusive leaders also recognize how their own culture impacts their personal worldview, as well as how cultural stereotypes can influence their expectations of others.
  6. Collaborative: Highly inclusive leaders empower individuals as well as create and leverage the thinking of diverse groups. But, while collaboration among similar people is comfortable, the challenge and opportunity created by the foundational shifts is collaboration with diverse others: employees, customers, or other stakeholders. Inclusive leaders understand that, for collaboration to be successful, individuals must start by sharing their diverse perspectives.

1. “The six signature traits of inclusive leadership: Thriving in a diverse new world,” Deloitte University Press; Deloitte Touche Tohmatsu Limited, 2016.

End notes

1 CFO Signals: Q2 2021, CFO Program, Deloitte LLP.
2 CFO Signals: Q1 2019, CFO Program, Deloitte LLP.
3 The Business Case for More Diversity, Wall Street Journal, Journal Reports: Leadership, Oct. 26, 2019.
4 CFO Signals: Q1 2019
5 The equity imperative: The need for business to take bold action now,” Deloitte Development LLC, February 2021.
6 CFO Signals: Q2 2021.
7Top Business Leaders Launch OneTen,” PR Newswire, December 10, 2020.
8Authentically inclusive marketing,” Deloitte Consulting LLP, October 19, 2021.
9SEC approves Nasdaq’s plan to boost diversity on corporate boards,”, August 6, 2021.
10Missing Pieces Report: The Board Diversity Census of Women and Minorities on Fortune 500 Boards,” Deloitte/Alliance for Board Diversity, Deloitte Development LLC, June 8, 2021.

Contact us

Christina Brodzik
National Leader – Diversity, Equity,
and Inclusion Client Service Practice
Principal, Deloitte Consulting LLP

Kavitha Prabhakar
Chief Diversity, Equity, and Inclusion Officer – Deloitte US Firms
Principal, Deloitte Consulting LLP

Nicole Patterson
Principal, Workforce Transformation
Deloitte Consulting LLP

Nikki Drake
Senior Manager, Workforce Transformation
Deloitte Consulting LLP

Kenny D'Evelyn
Workforce Transformation


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The CFO Program brings together a multidisciplinary team of Deloitte leaders and subject-matter specialists to help CFOs stay ahead in the face of growing challenges and demands. The Program harnesses our organization’s broad capabilities to deliver forward-thinking and fresh insights for every stage of a CFO’s career—helping CFOs manage the complexities of their roles, tackle their company’s most compelling challenges, and adapt to strategic shifts in the market.

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Deloitte CFO Insights are developed with the guidance of Dr. Ajit Kambil, global research director, CFO Program, Deloitte LLP; and Lori Calabro, senior manager, CFO Education & Events, Deloitte LLP. Special thanks to Josh Hyatt, manager/journalist, CFO Program, Deloitte LLP, for his contributions to this edition.

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