The accounting profession is slowly becoming more diverse as more firms expand their hiring and promotion of women and people from underrepresented backgrounds, but progress has been halting.
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As Women’s History Month comes to a close, more attention is being paid to gender diversity issues. However, after the annual commemorations fade, women will still be struggling for equality, as the pandemic sheds light on the extra burdens faced by women who have lost their jobs in the past year as companies cut costs.
“Women have made the greatest amount of progress of all the demographic groups that we studied in the accounting profession,” said Loreal Jiles, director of research on digital technology and finance transformation at the IMA, who led the research for the joint report with CalCPA. “Women currently make up about 62 percent of the U.S. accounting profession, which is amazing because some decades ago that number was maybe in the 30s. So, we’ve seen tremendous progress from an overall representation perspective, and that’s where we start from a bench line. Where we moved beyond that is we learned there is what we termed a ‘diversity gap.’ That diversity gap exists most widely for women at the senior leadership level. So, although there are about 62 percent of women within our profession and of course, the U.S. population is in the 50 percent range, there are only 23 percent of women that are partners in accounting and finance functions for U.S. CPA firms.”
The contrast is even sharper in corporate America. “Within the full range of CFO ranks, really large organizations, the Fortune 500 and S&P 500, that representation is even smaller, less than 20 percent in those scenarios,” said Jiles. “There is a lot of really good progress that's been made for overall representation, but we still have a lot of work to do to ensure that women are represented in senior leadership ranks.”
The study found a number of reasons why this is still the case. “Our results in the survey findings showed that the reason that women are underrepresented at senior leadership levels is because of a lack of equity and inclusion,” said Jiles. “It's saying that women themselves don't perceive an inclusive environment holistically. And that lack of inclusion, as well as a lack of equitable practices and behaviors across the profession, is contributing to women not being able to advance from a career perspective within the organization that they've worked in. And it’s not unique to CPA firms. It's not unique to the businesses or the organizations where accounting and financial professionals work. It’s something that we see incredibly widespread across all types of organizations where women or men are working within the U.S. accounting profession.”
A number of CPA firms have been making strides in expanding the ranks of women at leadership levels, including Top 100 Firm The Bonadio Group, which has 40 percent women partners and principals, The Bonadio Group has been designated a Best Accounting Firm for Women as well as a Best Accounting Firm for Equity Leadership for five years by the Accounting & Financial Women’s Alliance as part of its Accounting MOVE Project.
“In the 35 years that I've been in the profession, things have moved forward significantly,” said Kristen Clark, who started her career with Bonadio as an assistant accountant in 1986 and became the firm’s first female partner in 1998. Since then, she has been named an office managing partner and the first woman on Bonadio’s Management Committee. “When I started with Bonadio, we only had three partners, so our firm has grown significantly as well. I did become the first woman partner, but I was also the first homegrown partner. Because we've always had a growth philosophy, we were looking more at who was able to grow the firm. I credit the founding partners with having the vision or the lack of bias about what makes a successful firm and who's growing it.”
Despite progress at some firms, many firms both large and small continue to show evidence of discrimination, according to the IMA and CalCPA report.
“Some female interviewees told us about examples where they were victims of sexual harassment within the accounting profession, and this came from senior male members within their organization,” said Jiles. “We heard lots of instances of people working at CPA firms where they were told you'll never be a partner because you're a female. And these aren’t instances that happened 30 years ago. We're talking in the last decade and some instances within the last five years. I found that more prevalent in smaller firms. So that outright conversation, the outright demonstrations of bias, seem to be more prevalent in smaller firms. The micro aggressions, the stereotypes and the like where it’s a bit more subtle, but still there, comes more in the larger organizations. And I think that's just a product of, in a larger organization, you've got more policies in place that hopefully help to curtail some of that as well as you have more opportunities and avenues to report and there are more eyes on larger firms.”
Work-life balance is an important issue, especially for women who need to juggle multiple roles in the office and at home, and unfair perceptions can harm women’s ability to advance in their profession, according to respondents to the IMA and CalCPA survey.
“Some of the specific examples that women cited were when they talked about having a lack of recognition for their contributions,” said Jiles. “Women within our study — and we had in the neighborhood of 1,500 or 1,600 people responding in this manner — cited unfair compensation and promotion practices, and a perceived lack of acceptance in expressing their opinions freely. All of that, coupled with the things that we hear more commonly about work-life balance. Women don't have the same work-life balance that they would like to have. They've got to wear this hat as a mother, as a wife, and then as a professional, and they struggle to strike the right balance.”
Discrimination can come in many forms, and it can be difficult to identify the source when female employees also belong to other underrepresented backgrounds. “With intersectionality, that's where you have more than one social categorization and then the females are not able to identify the reason for the bias that they're receiving,” said Jiles. “That could be racial and ethnic intersections with gender. It could also be LGBTQIA orientation intersecting with gender. We had several persons who were either lesbian or maybe it's an African-American female or Hispanic or Latino female. They received similar treatment to some of their counterparts that were females that were white, but they were not sure why. That complicates matters just a little bit more.”
Work-life balance
Flexible work arrangements help at some firms, like Bonadio. "We have been unusual, especially for a regional firm, in terms of being flexible and progressive when it comes to different workstyles," said Clark. "We've had flexible work arrangements, whether it's part-time or accommodating different schedules and figuring out how to work remotely, things like that. I think we were on the front end of that. I personally have never worked a part-time schedule, but I do know that we've had plenty of people who have done it. We just recognized early on that to keep the best people we had to be more flexible.”
Women and other underrepresented people offered a number of recommendations in the IMA and CalCPA study for improving diversity at the senior levels of accounting. "As we look to what specific things would be beneficial for women … the opportunity for the female demographic is driving career promotion," said Jiles. "And as we think about driving career promotion, what does that look like? It looks like ensuring that there’s female representation on interview panels, ensuring that there’s female representation within the candidate pool.”
Firms that want to become more diverse need to increase their consideration of women for senior-level jobs. “Sameness of treatment does not always result in proportional fairness,” said Jiles. “There’s data that women are already at a disadvantage when it comes to advancement. And that means that we need to make intentional decisions and deliberate action that will ensure that women are in the conversation. We're not at all recommending that promotion be handed to women because they’re female. That is a misconception as well. But the focus is being more on ensuring there is female representation in the candidate pool for growth at all levels, not just the introductory roles, but the more senior ones as well.”
Firms also need to hold themselves accountable for fostering diversity. “We've seen a lot of that in the news recently as it relates to board diversity and gender parity from that perspective,” said Jiles. “A lot of that is going to help on a larger scale. From an accounting profession perspective, we should focus as much on ensuring leaders are held accountable for making sure there is representation of females in those interview panels, in the candidate pool, in the conversation for promotion.”
Some firms may even need to revive the much-maligned concept of quotas. “I listened to Ursula Burns recently, who is a former CEO of Xerox, and she spoke at the California Conference for Women,” said Jiles. “She talked about quotas and how she had been against quotas for a long time, but she views quotas as the punishment for people not doing what they were supposed to do. And unfortunately, that's where we are at this stage. From an accountability perspective, quotas are necessary to mandate that people do what they're supposed to do. It doesn't mean that to fill the quota you hand out jobs immediately. It does take time to meet whatever goal is set. But just as larger states, for example, the state of California, had mandates for gender equality or greater gender representation on boards, and the women magically appeared. You didn’t have to go and search for them and find them or groom them and start their careers all over. They are already there. I think that's something that we need to recognize as well. There is such great diversity broadly across our profession, and the talent that we need to tap into already exists within the profession. The quotas are, for what it’s worth, a way of nudging people to tap into the talent that's already there.”
Bonadio isn’t using quotas to improve gender diversity. “What we're doing now is shifting more from wanting to have X number of women in the firm or women partners to what are the roles that we're all playing and recognizing that the more diverse we are, the more successful we're going to be,” said Clark. “We've shifted from just being about how many women do we have in the firm to what roles are they in. We've got women in leadership positions, whether it's management committee members, board members, office managing partners, practice area leaders, team leaders. That's really more relevant in my mind than just purely looking at numbers.”
Firm culture can help improve diversity. “Beyond quotas is a cultural change,” said Jiles. “The quotas will help with getting the fix in the short term, but for long-term sustainability, there has to be a cultural shift across the profession, and that cultural shift has to gravitate more toward inclusion, gravitate more toward that people ultimately feeling the outcome of inclusive practices. Women need to feel as though their voices are heard the way that others are, that they have the same seat at the table.”
Making their voices heard also means speaking up. "I think younger women and women in general have always been challenged in asking for what they want and articulating what they want, whether it's a client assignment or a specific leadership role or a certain level of flexibility," said Clark. "And as a gender, historically, we've been too passive about that. I would advise younger women to be better self-advocates than I ever was, especially early on in my career. People can't read your mind, so you need to articulate what you want out of your career and work for it. It’s good to just see what you want, but finding the right people that are going to help you achieve that is really critical. Communication, flexibility and self-advocacy are really critical skills to build early on.”
