Jan 21, 2021

Opinion: Vaccines put global economic recovery within reach

Ian Stewart, Chief Economist U...
6 min
Ian Stewart, Deloitte's Chief Economist in the UK, says containment of Covid-19 and vaccination roll-outs should drive global growth
Ian Stewart, Deloitte's Chief Economist in the UK, says containment of Covid-19 and vaccination roll-outs should drive global growth...

Rich countries normally fare better in health crises than lower-income countries, but not in this one. Wealthier, western nations have been the hardest hit. Death rates in Italy, Spain, the UK and Belgium have been around 500 times higher than in China, Vietnam or Thailand. 

The hope that, with experience and growing knowledge, societies would get better at containing the virus has not yet been realised. Despite improvements in treatment, testing, tracing and protective equipment, global case and death rates are higher now than ever. The emergence last month of the new UK/South African variant, which could be up to 70% more transmissible, has given the pandemic new impetus.

The implications of the new variant spreading are obvious and are already unfolding in the UK. More intense lockdowns are likely to be necessary to deliver a given level of containment. (The fact that in the UK levels of personal mobility are still higher than those seen in the first lockdown suggests that the public may not have got the message.) Restrictions will be necessary until some combination of widespread vaccine deployment and weather comes to the rescue in much of the industrialised world, probably around the middle of this year. This points to weaker global growth in the early months of 2021.

For countries, like the UK and the US, which are seeing a surge in new cases, the economic recovery is looking increasingly W shaped. The slump in activity in the first wave of the pandemic, last spring, was followed by a summer bounce which has given way to slower growth. In the light of the emergence of the new strain of the virus, and the national lockdown, we think the UK will now see a contraction in growth of 3.5% in the first quarter of this year.


An easing of restrictions, and a resumption of growth, depend on the speed of deployment, and efficacy, of vaccines. Predicting anything to do with the progress of this virus has been a risky business. 

But for forecasting purposes, and in the light of a strong start, we have assumed that the UK hits its target of vaccinating roughly 2m people each week. At that rate, around 15m people, principally over-70s and clinically extremely vulnerable people, would have received a first vaccination by early March. Because this demographic has accounted for about 90% of all UK deaths we anticipate some relaxation of the restrictions by March and a return to growth in the second quarter.

Even at a rate of 2m vaccinations a week the UK will not be able to provide a first vaccination to all of those in the high-risk groups, including the over-50s and those with underlying health conditions, until July. As this milestone is reached over the summer we assume a more material easing of restrictions and strong, 9% rebound in activity in the third quarter and continued growth in the fourth quarter. By early 2022 the entire adult population of the UK would have received two doses of vaccine.


The belief that the 2021 recovery has been delayed, but not derailed, by rising case rates depends on a number of things going right. Most obviously the production and roll-out of the vaccines have to scale up. Investors surveyed by Deutsche Bank in December identified the emergence of vaccine- resistant strains, unexpected adverse side effects from vaccination and low vaccine take up as the three greatest risks to the outlook.

Unemployment almost certain to rise

Aside from the virus, other factors will determine the path of global activity this year. The deepest global downturn since the 1930s will leave a hangover. Unemployment and business insolvencies are almost certain to rise this year as the lagged effects of the recession weigh. The extension of restrictions needed to curb the virus will cause additional damage. 30% of UK businesses say they have less than three months of cash reserves left, rising to over 50% among restaurants and hotels. 

The accumulation of debt by businesses and emerging market economies and stretched valuations for equities, especially among US tech stocks, have created new vulnerabilities. History shows that recoveries from deep recessions have often been retarded by economic scarring, and the dislocation and loss of skills, connections and capacity inflicted during the downturn. And all of this in a global economy where, even before the crisis, productivity and growth were running at sub-par rates.

These factors seem likely to dampen the recovery this year, but not to stop it. In many respects this downturn is different from those of the last. The hyperactivism of governments and central banks in resisting the downturn has significantly limited the damage to jobs and businesses. Unemployment rates in Europe and the US, for instance, are well below levels reached in the far milder recession of 2008–09. 

The downturn is hitting consumer services, such as retail and hospitality, hard, but the capital-intensive manufacturing sector has bounced back, according to the Purchasing Managers survey. Global trade, too, has rebounded far more quickly than in the last recession. Low interest rates, buoyant assets prices and government support schemes have bolstered private sector balance sheets as government borrowing, and quantitative easing, have soared. Corporate cash holdings and consumer savings rates hit record levels last year. If the vaccine is able to stop the virus in its tracks pent-up demand should drive another snap back in activity.

Low inflation and cheap borrowing costs provide policymakers with every incentive to run easy policy until the recovery is entrenched. Last week’s victories for the Democrats in the Georgia run–off elections gives the Biden administration the balance of power in the Senate, increasing the odds of a further, substantial easing of US fiscal policy.

Organisations adopt digital to survive and thrive

The threats to the recovery from economic scarring are real. But in some ways the pandemic is likely to accelerate productivity enhancing change. The downturn has led to rapid adjustment as organisations adapt to consuming, interacting and working at a distance. Home working, virtual GP consultations and contactless payments have soared. While this is partly about using technology, much of it well-established, but at least as much about changing established structures and practices. 

Much of the change is likely to outlast the pandemic. UK CFOs expect levels of home working to rise five-fold relative to pre-crisis levels, a shift that would constitute a revolution in the organisation of work. The gains from applying technology, and new ways of operating in sectors where productivity has tended to lag, such as education, medicine and retail, could be significant.

There are some positive signs on this front. UK CFOs have come into 2021 with a strong focus on investing in data, software, automation and digital technology. When the European Central Bank asked business leaders about the long-term impact of the pandemic on their own operations by far the most popular response was that it would raise productivity.

The pandemic seems likely to be a catalyst for lasting change in business and in society. It will overlap with, and be amplified by, the even greater long-term effects of action to address climate change. Like past energy transitions, the economic gains from new services and demands seem likely to outweigh the losses from the shrinkage of existing industries.

However you cut it, the global outlook is uncertain and full of risks. Yet I cannot remember a start to the year where the contrast between the mood about the real economy, and sentiment in financial markets, has been so different. Global equity markets have risen by a remarkable 20% since early November, shrugging off rising COVID case rates, new lockdowns and the discovery of the new, more transmissible variant. For investors the arrival of effective vaccines puts recovery within reach. I am inclined to agree.

Share article

Jun 13, 2021

Why we need more female CFOs (and how to reach that goal)

Kate Birch
12 min
Four female global financial experts weigh in on why there are so few female CFOs, and what organisations can do to redress the boardroom gender imbalance

The number of women in CFO positions in Fortune 500 companies reached a record high late last year, hitting 90, up from 65 just a few years ago. It’s not surprising given the increased focus in recent years on C-suite and board parity by investors such as Blackrock, as well as other institutions including the Nasdaq, which recently stated that companies listed on its US exchange will need to have a minimum of two non-white or female Board members. And if they do not, they must publicise the reasons as to why.

The picture is similar in the UK. According to Julia van den Bosch Wazen, CFO Practice consultant at Odgers Berndtson, The Financial Conduct Authority in the UK is now looking to the London Stock Exchange listings framework as to whether similar measures ought to be implemented, while for City firms, “there are already ongoing discussions about potentially using wider FCA powers, such as denying regulatory approves to drive diversity on Boards”.

But while there’s certainly been improvement, the under-representation of women in executive finance positions remains less than rosy, with van den Bosch Wazen admitting that “whilst much has been done, we are still of the view that progress is too slow”.

Still too few women make CFO

According to the government-backed Hampton-Alexander Review, of which Odgers Berndtson are active contributors, while women now make up one third of all board positions in the UK’s FTSE 100 companies, up from 12.5% less than a decade ago, there remains a concerning lack of female representation in senior leadership and key executive roles in FTSE companies, with just 15% of finance directors bring women.

“One of the Big Four partners informed me that their annual graduate intake split is around 52% women, 48% men. By the time this age group reaches their early thirties, the number goes down to 34% women,” explains van den Bosch Wazen. “Since many CFOs of listed businesses in the UK take the audit route, before moving into industry, the disparity of diverse talent coming into the market starts early and is not able to catch up later.”

Recent McKinsey research for its Women in the Workplace report for North America backs this up. While research shows that women and men in financial services begin their careers making up roughly equal portions of entry-level staff, once you get higher up the ladder, women account for only 19% (one in five) of positions in the C-suite.

The research suggests that as women advance through their careers, they steadily lose ground to their male peers at every stage, suggesting the pathway to the CFOs office is not as clearly illuminated for female candidates.

Why women make good CFOs

And yet the evidence suggests that when women do make it to CFO, the payoff for organisations is positive. Companies with female CFOs and CEOs prove more profitable than those led by men, with women-led firms generating US$1.8 trillion more in gross profit than the sector average, according to a report by S&P Global.

Furthermore, as van den Bosch Wazen points out, according to McKinsey’s latest Diversity Wins report, companies with more than 30% of women executives are more likely to outperform companies where this percentage ranged from 10-30%.

“The benefits speak for themselves and I’m thrilled that investors are pushing harder for this,” states van den Bosch Wazen. “The more diverse your management team, the more engaged your workforce, and the better your customers are looked after. You are better informed of the world, you tend not to miss trends, making your balance sheet strong and your organisation run more efficiently.”

Cristina Catania, Partner at McKinsey & Company agrees that gender diversity “enriches decision-making and so has a positive impact on companies’ performance and sustainability”, however more specifically, and in the context of the finance function, she points out that studies have found that “women have higher risk aversion than men and that can be a good thing”.

Maggie Xu, Principal of Greater China Financial Services Practice at Oliver Wyman, agrees suggesting research shows that female CFOs are more risk averse and tend to adopt more conservative accounting policies. And for “those companies/industries with higher litigation risk, default risk, systematic risk, or management turnover risk, who are more focused on accounting conservatism, female CFOs may well do a better job”.

Arguing that women are “equally qualified to effectively address current and future challenges and disruptions”, Hanady Khalife, Senior Director of MEA & India for the Institute of Management Accountants further points out that beyond operations, inclusive working cultures where women leaders exist have been known to attract and retain top talent.

“No matter how you look at it, women leaders are good for business and for building more sustainable, self-sufficient and increasingly shockproof businesses, even economies,” asserts Khalife.

In our roundtable, we talk to these four female financial leaders to identify the barriers facing women and discover how organisations and leaders can facilitate their advancement.

International panel discussing women as CFOs

Julia van den Bosch Wazen
Consultant, Odgers Berndtson’s CFO Practice

Maggie Xu
Principal, Greater China Financial Services Practice, Oliver Wyman

Cristina Catania
Partner, McKinsey & Company

Hanady Khalife
Senior Director, MEA & India Operations, Institute of Management Accountants

Why are women under-represented in senior financial positions, and the CFO role specifically?

Julia van den Bosch Wazen, Consultant, Odgers Berndtson’s CFO Practice: Women in key financial management roles tend to have a shared set of challenges, such as balancing home/work life, which is overcome by having the right support and an engaged sponsor at work. Sponsors are often men in senior management positions. Men are essential in furthering the development of all strands of diversity in the workplace, and the more informed diversity and inclusion allies there are, the better the company performs. COVID has forced the majority of companies to work from home and highlighted to many employers the dual nature of a working woman’s careers. That said, pre-pandemic, many female CFOs said to me that their life was a constant balancing act of whom to disappoint more – their partners, kids, or friends. Senior women rarely disappoint their employers, just like their male peers.

During the executive search processes we run, Boards will actively seek diversity, though in a risk adverse hiring market, like the one that we are in, many end up choosing proven Board experience over and above stepping up talent. It is widely publicised that there are more men in those roles than there are women, and so the balance is again not restored, further facilitating the lack of Board experienced women.

Cristina Catania, Partner, McKinsey & Company Unfortunately, this under-representation of women in senior roles isn’t exclusive to finance – it’s a similar picture in business management and strategy. But, prior to COVID, concentrated efforts were making some gains. Across all industries, we’ve seen women’s representation in the C-suite increase by 24% since 2015, including some notable appointments in the financial sector, like Jane Fraser at Citi. There is, however, a broken rung at the very bottom of the corporate ladder that is stalling progress.

Our annual Women in the Workplace study of women in North America shows that for every 100 men, just 72 women are promoted and hired to manager. Women get stuck at the entry level and fewer become managers. Not surprisingly, men then end up holding 62% of manager-level positions, while women hold just 38%. The number of women decreases at every subsequent level, so despite improved hiring and promotion rates for women at senior levels, they aren’t able to catch up.

Hanady Khalife, Senior Director, MEA & India Operations, Institute of Management Accountants One would assume this is a problem most prevalent in the Middle East but it is global. A National Bureau of Economic Research study from Denmark found that even at the height of their careers, women tend to spend more time raising children, and so work fewer hours, take longer breaks from full-time employment, and are more likely to move into less demanding jobs with lower growth and less pay.

Other reasons include the pay gap, lack of mentorship and coaching, and aggressive competition by male colleagues, as well as lack of female C-suite role models. When women don’t see role models or potential paths towards executive-level leadership, they are more likely to deselect themselves out of such roles.

Maggie Xu, Principal, Greater China Financial Services Practice, Oliver Wyman In research, we identified four critical barriers for women seeking leadership. Firstly, men and women define effective leadership differently, while women leadership candidates tend to be evaluated by men. This misalignment in key leadership traits between the genders creates obstacles to women rising to leadership roles. In China, although significant increase in the ratio of companies with female executives has been observed during the decade, extensive research indicates that the rate for female CEO remains very low, and CEOs are critical in assessing the performance of CFO candidates.

Secondly, women’s focus or predisposition toward results, along with a dislike of ‘networking for networking’s sake,’ may cause them to miss an important dimension of what ultimately impacts leadership promotion decisions. We also discovered that qualified women are unintentionally left on the sidelines, partly because women are simply not top of mind, and so are less likely to self-advocate and must battle inaccurate assumptions related to their willingness to take on more intense roles.

Also, men and women perceive their readiness for the next role very differently, and most companies do not actively mitigate that bias at play. A woman often won’t apply to a job unless she feels she meets 100% of the described qualifications, while for men, it’s more like 60% and as we all know, raising one’s hand does not necessarily equate with capability.

Finally, research shows women are more likely to have ideas mis-attributed to others, be talked over in meetings, receive vague or unconstructive feedback, and be viewed negatively for visibly demonstrating the same confidence that is valued in male leaders. Many high potential women, weary of bias, exit the talent pipeline, either opting out of the workforce or choosing a different career.

How can organisations and leaders motivate, empower and facilitate women in reaching CFO status?

Julia van den Bosch Wazen Mentorship from senior colleagues is vital in helping women to navigate the mid-point of their career. Our philosophy in the CFO Practice facilitates that same ethos: we want to help advise women early on to help build careers toward the three-stage interview process they will face when stepping up to their first Main Board role. A financial management career for a listed CFO role needs to be built to answer the questions a CEO will pose (do you have commercial and operational P&L experience to be my partner in setting strategic goals); the Audit Chair (will you give me comfort in your technical financial management skills to assure that the business will not have to restate its numbers); and the Chair (do you keep my CEO ‘in check’, and will you let my Audit Chair rest easy at night).

There are a number of roles within the finance function I strongly encourage women to take en route to Board, to gather experience against the above criteria. I also urge women to do more external networking. I’ve set up bi-annual women’s networking lunches giving senior female talent the opportunity to hear how experienced finance leaders have successfully developed their careers. These have been well-received and have now broadened out to both our Regional CFO and Financial Services Practices to help deepen the advice shared.

When selecting a headhunting firm, I would urge that you ask what they are doing to support the D&I agenda during the pitch process. Your candidate list might well be diverse, but if you see that those who are looking likely to be shortlisted are all non-diverse, check why, and what can be actioned based on feedback.

Cristina Catania Talent attraction is the first step to sustaining a pipeline to fill CFO roles long term. For finance, there is a need to create multiple role model examples to inspire young women to join this career path, which is increasingly at the centre of key company decision-making. We know from our study that when employees believe that their company offers both fairness and opportunity, they are three times more likely to remain at the company, be fully engaged and recommend the company to a peer. What we know about the experiences of women at entry levels in financial services indicates that a perceived lack of fairness and opportunity could be contributing to the steep drop-off in female representation between entry-level and middle management roles.

Specifically, women early in their careers are less likely to aspire to top positions. This could be due to a lack of female role models, but women also report less interest in executive roles due to concerns about balancing work and family and the perceived pressure that accompanies top jobs. Even when women do aspire to the top positions, they typically do not receive the sponsorship support that would enable them to succeed.

Our 2017 Women in the Workplace research shows that women who receive advice from senior leaders on career advancement are more likely to be promoted, and yet earlier-tenure women receive less encouragement and support from senior leaders than do their male counterparts.

The programmes that are showing impact in creating a sustainable pipeline of women start with the creation of a more ‘inclusive’ workplace, created through HR parental policies (applicable also to fathers, which in turn allows for shared parental responsibilities) and doubling-down on additional welfare services like in-office daycare.

Other measures include removing gender biases in assessing criteria for being eligible for a promotion, flexibility arrangements, leveraging maternity as an upskilling moment, the introduction of sponsorship programmes, and measuring and publishing target setting. And all steps need to be truly sponsored and promoted by the CEO and cascaded throughout the whole organisation.

Hanady Khalife Increasing opportunities for women to advance to leadership roles in the organisation begins with understanding the internal pipeline to identify barriers and obstacles to advancement and in turn, establishing measurable goals for building equity.

Organisations need to develop corporate cultures that support women who wish to achieve a healthy work/life balance, rather than breed cultures that penalises them for attempting to balance priorities. But while firms need to focus on more affirmative action to ensure gender equality, whether through quotas or recruitment programmes, they also need to pay more attention to how women can be mentored better to keep pace with new and emerging industry requirements. 

Maggie Xu Organisations can be more purposeful in levelling the playing field for women, and by changing the emphasis from fixing things bottom up to top-down, effects will take place faster. We believe there are three core elements in this effort: inclusive leadership starts at the top, so educate your existing leadership and motivate them to be change agents; target D&I like a business to get more results; and double down on sponsorship, improving the effectiveness of senior leaders’ sponsorship of the women.

Share article