The American Institute of CPAs' Crystal Cooke talks about why the perception that companies are scaling back their diversity efforts is wrong, and how accounting can move forward in its pursuit of diversity, equity and inclusion.
Transcription
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Dan Hood (00:03):
Welcome to On the Air With Accounting. Today I'm editor in Chief Dan Hood. There's been a lot of disturbing talk lately of a backlash against diversity, equity, and inclusion efforts across the workforce as a whole. And there's a general sense that corporate America may be retreating from its commitments and responsibilities in this area. Here to talk about this trend is Crystal Cook. She's the director of Diversity and Inclusion at the A-I-C-P-A. Crystal, thanks for joining us.
Crystal Cooke (00:25):
Hi Dan. Thank you so much for having me. I appreciate it.
Dan Hood (00:28):
Yeah, thank you for coming on. This is a little bit of, as I said, sort of a disturbing
Crystal Cooke (00:32):
Trend. It's a spicy one for sure. Yeah,
Dan Hood (00:36):
Exactly. I mean let, let's start, is there backsliding and then if there is, how bad is it
Crystal Cooke (00:41):
First though? Dan, if you don't mind, I would like to do a little brief visual introduction of myself to help people who are listening kind of get an insight into who I am. I like to do this just to bring people into the conversation. I think getting to know me even though they can't see me helps a little bit. So I am a African-American woman. I have LTE brown skin. My pronouns are she her. I have, going back to my physical description, if we were to meet on the street, you would be surprised at my five foot 11 height that I have, most people see me on Zoom and from shoulders up. I look the same height as everybody else, but I'm pretty tall. I do have these glasses that I wear and I am joining today from my home office in Bowie, Maryland where I live with my family. So just wanted to bring a little bit in. I have two boys who keep me busy and yes, so that's a little tiny bit about me just to kind of get things going, but wanted people to have a little insight into who I was.
Dan Hood (01:47):
Absolutely. That's a great way to start this. I'm going to throw in some, I'm not going to give all the details, but I'm just going to say that I am shorter than you, significantly shorter than you by at least an inch. So I'm glad that we're only from the waist up. And one of the things about this virtual thing is that realizing that everyone actually has legs constantly astonishes me. Exactly. I meet
Crystal Cooke (02:06):
People in person,
Dan Hood (02:07):
But I just for the record say I'm white. My pronouns are he him. I also have glasses in addition to being taller. I'm a little heftier I think than you are, maybe more than a little heftier, but that's as far as I'm willing to go. I think we've set the stage here, but actually that is a great way to start for this kind of discussion. But as you said, I think I like your word. It's a spicy one. It it's a spicy thing. This is an issue that has been DEI has been an issue for the economi as all, but also specifically for accounting For a long time there's been a lot of efforts added a lot of programs and initiatives started individual firms at state societies at the A-I-C-B-A and a lot of effort's been put into it. But as we say, there's been this trend recently of at least that's what we're hearing reported is this trend of a little bit of backsliding or retreating from it. And like I said, so the question may be are we seeing that? Is that for real and how bad is it?
Crystal Cooke (03:03):
So I like to start off with a little bit of data. I think that's what us accountants in the profession, we like data to ground us and level us. And so in all this excitement I guess is probably a lack of a better word, but of what's been going on in this space. I tend to turn to education, research, talking to people, legal help, all that kind of thing. And so one of the avenues I took was going to this organization called Santa, which I don't even know if I'm not trying to promote them or anything, but they have a lot of great DEI research and they give a lot of trainings that I've been participating in. And they put out a report in 2023 called Keeping DEI strong in Volatile Times. And so the goal of this was to understand the obstacles that committed DEI leaders like myself and those who sit around the National Commission on Diversity and Inclusion table at the A-I-C-P-A and cima, what we face and what and outside of the profession too, this group is actually goes across professions and includes other industries I think.
(04:13):
And so it came up with four unique elements of where volatility exists for people who work in DEI. And I think these are very telling to get to your point. And so one is the fight. There's a fight to dismantle DEI and I think that's where the DEI legislation comes in and all the legalities around it. It's causing a lot of fear and what some people will even call overreaction prematurely. And so this fight that we're doing every day I think is trying to work, and I'm going to call these hurdles. I like to use the word hurdle. I think we can overcome these things. And so that's one hurdle. The second hurdle is there's an economic downturn that we're all going through. Now this is what came out of research that they did with a bunch of CDOs. They asked a lot of things that did. And in economic downturn which many organizations are seeing there is this overall budget cuts. There's also layoffs. And a lot of those layoffs also impact DEI. And then we see that people are having to readjust and change tactics for all their business lines. And DEI isn't excluded. And so how are we going to keep operating as a business given this economic downturn?
(05:39):
The remaining two things, new leadership. So you may have new leaders who come in who may not necessarily agree on how things were being done in the past for DEI and they want to make changes on how initiatives are ran, that kind of thing. That then hurts the DEI and it may have to re-level up to get things back to where they were before that new leadership came. And then mergers and acquisitions. So when you bring two orgs together, there are two different organizations who were functioning their own DEI thing separately and you got to bring 'em together, realign values. And so those sometimes cause things to waiver a little bit until we can get back on track. And so these are the major four hurdles that I think we are seeing now. And I think those are all coming together at ahead due to many reasons.
(06:26):
And those are impacting DEI. And this list resonated with me when I saw it because what I'm seeing, and so also in this report though, it had some great data that I want to share that people who are faced with these kind of headwinds, the research is showing that about 80% of them are, they called it wait and see approach. But to me that means their continuing efforts, they're not overacting, they're not making any major changes outside of the ones that they have to do maybe legally that their lawyers are requiring them to do, but they are also trying keeping track the pulse on the external factors that are going on and may impact efforts down the line so that they can pivot and be reactive and not lessening the DEI efforts. So that's 80% of the population of people who they surveyed. And so 10% though are regressing, which is I think to your point what you were talking about.
(07:29):
So only 10% have regressed. And I think to me, Crystal's opinion is those type of organizations that are regressing probably never truly value DEI to begin with. And they never really were sound in what they were trying to roll out and this just gave them an excuse to be able to do that. And so that's the 10%, those are probably the ones we hear about, the ones at the media blast and makes it seem like it's everyone and those. And then there's even an additional 10% who are doubling down DEI and doing more and they are like, oh, this gives us energy that we need to, it's even more important. And so I think that is kind of what I see as the landscape of what's happening. And that kind of captures it pretty well to me. And so I can go into what the NCDI is even talking about and what I'm seeing even more, but I want to pause and get your reaction to that.
Dan Hood (08:24):
Well, I got to say that's encouraging as you say, I think that the reporting is, as you said, backsliding the retreat and it's retreating across the thing. But if it's just 10% of businesses that hopefully, one, it doesn't lead to people saying, well, everyone's doing it, everyone's backing away from it so we can all back away from it. Good. We don't have to, we can fire those people. We can stop spending that money, stop having those uncomfortable conversations. But if it's 80%, as you say, we're just keeping things ticking over, we may not be making big initiatives, but we're keeping it going. And then the other 10% are advancing as they say, that's encouraging in the sense of this is continuing. And those 10% who are regressing as you say, are probably wanting to do that anyways. So yeah, I think that's encouraging. And the trick I guess is to make sure that those 10% don't give cover for other people who want to say, wow, well those people aren't doing it. Why should we do it? Kind of
Crystal Cooke (09:19):
Thing. Right. Well, let me give you a little more insight if I may, into what I see in the accountable profession. So at the National Commission on Diversity and Inclusion, we also, none of us around the table are wavering first, let me put that out there. So we conducted a little mini survey. By no means would researchers probably think this was an all inclusive survey that is strikes down all anything else. But we did, I'm calling it a mini survey. It was anonymous. We did it with the firms that sit around the NCDI along with some of the firms. We have an accounting inclusion maturity model tool that helps people measure DEI. So we reached out to the firms who were in that because those people, those organizations are all committed to DEI who use that tool. And so we knew they'd be interested in providing their input.
(10:12):
And so we asked them, how has recent DEI legislation and rulings impacted your investment and your DEI strategy? Are you making any changes? And so most, actually all of the answers were either not at all, we're not making any changes, we're making minimal changes. We may be redesigning our strategy and approach. And I think that's because of rulings and things that you have to do legally. And then there were even people who, again, like the other survey said that they were increasing their investment. So no one in that survey, even though it was a mini survey, but it probably represented a good number of firms, high level firm in count. I would say the top 10 are in that list. No one has reduced investment, no one has paused and no one has discontinued efforts. But we're all, again though, I do want to put a caveat in there, those hurdles exist that are in that survey.
(11:17):
And so just like for instance, the economic downturn that mentioned, there's definitely adjustments that has to be made throughout many firms. And DEI isn't excluded unfortunately because that's a part of, that's a business line in the organization. So they may have to make some adjustments there too. But the DEI leaders that I speak to, they're trying hard to make sure that it remains a priority. They're trying to figure out how to be as impactful as they can given these unfortunate hurdles that we now have to overcome. So I think it's still top of mind, still priority. I'm not going to say people won't feel changes because that's just natural in trying to keep a business running, especially during the economic downturns that we're having and then throw in the legalities of all of the legislation that kind of calls us a little ripple. But that doesn't, doesn't mean that anything's being left is my point.
Dan Hood (12:18):
Excellent. That's that's also encouraging. I'm sort of curious apart from that, from your mini survey and research teams across the country are thanking you for your clarifications. It's a pulse survey, it's not that, but those can be super, super useful for determining in the moment where things are going. And that's good to hear that they're not retreating from it. But I'm sort of curious, it raised a question for me, which is do you have a sense more broadly separate from the question of where things are going immediately, a sense of the commitment in the accounting space for DEI by firm size? Is it more of a large firm thing than a small firm thing or some of it involves resources we're talking about some companies are looking saying, we're having economic troubles, we may need to find ways to cut. Is DEI an area we can cut in? Given that it can involve some resources? Is it more of a large firm thing and less of a small firm thing? Or where do you see it in terms of firm size?
Crystal Cooke (13:21):
I don't think firm size matters at all. I think the ability to be nimble and to change is maybe easier and smaller than a larger firm. I think a larger firm probably has more visibility, more scrutiny, more eyes into what they're doing. So it may seem like that they are more in the spotlight than others, but it's just because of their size. But I think all the organizations we even have on our NCDI, we have small firm, we have medium-sized firm, G 400, MFG, all of them are talking about this. All of them are committed to this. And it's more about how do we do this in a way that we are within the realms of what we're allowed to do and still meeting our targets? Because that is what, at the end of the day, we know this profession cannot not have be diverse, equitable, inclusive. We can't succeed without it. So we got to figure out a way to make this work. We got to maybe be a little more creative in our approaches and how we run our programs and things like that. So where we can still achieve our DEI targets and things like that. But that's really what I'm hearing is how do we do this? Not do we, it's everyone saying yes, this is a priority, but how Cool. Cool.
Dan Hood (14:51):
Well, I want to dive into that because that is the perennial question. I think the question for decades has been how do we advance on this front? And I want to dive deeply into that, but we're going to take a quick break before we do that. Alright. And we're back with Crystal Cook of the A-I-C-P-A. We're talking about DEI efforts both broadly and then specifically in the profession. And the good news is no matter what you may have heard in the news that it's still going strong, people are still committed to it. In the accounting profession, there may be a few 10% or backsliders, but we expected that from them. They were losers anyways. We just kicked them, kicked into the curb. We don't need them. But it's still going strong as people still.
Crystal Cooke (15:30):
I did not say that.
Dan Hood (15:31):
No, you didn't. I did I get to say these things. I'm allowed to say things like that. I'm not really, but no one stopped me yet. No, but I think you made the strong point that these may have been places where the commitment was not as strong as it was. That may have been whatever the DEI version of greenwashing is, where it was more performative than real. Or as you say, it may also involve hurdles where people came up against economic issues or changes in ownership, et cetera, et cetera. Point is there's a strong commitment still on the part, the profession and of accounting firms everywhere to push forward on this, which is good because as you said, the profession given its tremendous. Let's just start with the tremendous capacity problems and the pipeline problems and so on, cannot afford to just purely as a business case, can't afford to cut off any source of, or not explore any source of potential young accountants and CPAs.
(16:29):
But as you said, the question isn't, should we? And I think that's been a question for a long time, and one of the things that may make it easy for that 10% to back away from their commitments is that it often seems as if there isn't much progress being made. When we look at the reports from the A-I-C-P-A on diversity trends, it seems to be incredibly hard to move the needle. So I guess we could just say, what do you got? What can we do? How can we move the needle? How can we improve on this?
Crystal Cooke (17:03):
Well, first I'm going to say, and I thank you for bringing up our trends report, we could not assess growth or change between our last report and our 2023 report because we didn't have enough firms participate. So our 2021 report is the last report that we have that has the most diversity data on the supply side of, or no, sorry, the demand side of what the firms are hiring and all that and what they're doing in their firms. We don't have that data for 2023. So hopefully we can get more firms to participate the next time we field the survey so that we can see the trends. And I think the other thing I can say is that the more firms participate, the more the numbers are actually true to what is happening out there. And so unfortunately we can't tell what happened. But what I did was I went and found, again, I told you I like to find the research and find numbers.
(18:03):
And so I went and found McKenzie and Company has been putting out DEI reports since 2015, and their latest 2023 report is called Diversity Matters Even More If that has any power, that title alone is the sentiment that we need to hear. And so this report, it's like a comprehensive overview of the relationship between leadership, diversity and overall company performance. And that includes social and environmental aspects. And so in summary, I know we're trying to keep things brief, people can go look at it on their own, but they're basically saying that the business case is strongest now than it's ever been since they've been doing their report and that they're actually starting to see trends in the right direction. And so we cannot, in my opinion, afford to stop now from all of the growth that we've made. And I think people sometimes feel like they don't see the change and that things are happening. But to your point, it is slow. It does take time. But we are making changes. We are making minor changes. Is there still more work to do? Absolutely. Which is why we can't stop, which is why we can't let these things like this ruling derail us. And I don't think now the rule, now I'm not saying ignore the law either.
Dan Hood (19:34):
Yeah, no point are we recommending that.
Crystal Cooke (19:36):
But yes, but I'm saying I don't think, and this is again, I went to another training and I heard lawyers, they put it in a way that made so much sense. They were like, people are fearful of the law. They don't necessarily understand all of the components of it. And they are overreacting. And some of their lawyers frankly are being more aggressive in what they are suggesting that people do to keep them out of media and all those kind of things. And so that's causing this feeling of panic and that they're like, first of all, it's so unstable what's even going to how these are all going to end? And frankly, we'll see in the news, a lot of the rulings, even people are going to court, they don't even make it. They get turned down by the Supreme Court. So there's a lot of things that it's just all over the place right now.
(20:32):
And I don't think the move is to lessen cut things like let's just stay the course we're on all right direction. We are on the way that people, I think our initiatives are good, but again, we may have to take some time to sit and say, okay, how can we continue to be impactful given all this? But it is totally worth the time and energy because we have to keep moving this forward. Our profession won't continue to exist without the diversity we need to have. And it's not just pipeline. The people who are here need to feel like they are a part of this profession. They need to feel like they have a place and a voice and can contribute. And so just as much as we are working on our pipeline issue, we need to be working on making the people who are in the profession feel like they belong.
(21:22):
And to that point on the McKinsey and Company point in that report, these organizations who had more leadership, diversity, ethnic and gender, those are the ones who are performing well. Those are the ones who they have because they have diversity at the top who can advocate for diversity throughout the organization. It then in turn flips performance. And everyone you'll seen, they feel heard, they have someone to admire to be, they have goals, they can see themselves. And so that overall is changing the performance. And so it is working. It does work when it's done. And so we just got to keep pushing and we just can't afford to stop, is how I feel about it.
Dan Hood (22:12):
Well, and it's worth planning to your point, and I think this is an excellent point, is that, and this ties into the sort of broader staffing and employment and pipeline question that DEI is not just about recruiting members of underrepresented groups, just as the staffing problem isn't just recruiting people, it's keeping them or keeping them happy and productive. If you've got people who are there and who are miserable, one, they're going to have lots of options to leave. And two, it's almost worse if they stay right? If they're unhappy, they're unhappy, they're probably not performing as much as you would like 'em to. And this is true again, whether it's underrepresented groups or just staff as a whole, these things tie together that you need to make those efforts. So even if you continue the EI just from the perspective of keeping the staff you have and keeping them happy, it's worth pointing out that those are two sides of the same coin. The work can't get done if you don't keep the people you have and if you don't get the new people you need. So
Crystal Cooke (23:07):
Absolutely, that's the D. The D is just getting 'em in the door. That's step one. There's lots of work after that
Dan Hood (23:18):
And a lot of it is work. And this may not seem as encouraging, but it's a little, I mean it to be encouraging, a lot of it, it's hard to measure. It's hard to measure inclusion or at least I think it's hard to measure. You would know better than I, but I think it's easier to measure. Yes, we hired three black people, we hired four women, we promoted three women to partner. It's easier to measure those kinds of things than it is to measure. Yeah, I feel comfortable here. Yeah, you know what? I can see myself having a career here for 20 years, 30 years. I can see myself rising to partner. I can see myself as one of those in that picture of all the partners. I can see myself in that group. It's hard to measure that I think. Or are they harder? Certainly than
Crystal Cooke (24:00):
It's more of the way I like to measure that is by asking people. And we do that through engagement surveys anonymous. They can be anonymous. Some people are fine not being anonymous, but you get usually more genuine feedback when you are anonymous and you ask DEI questions, do you feel until feel safe to be yourself here? Do you trust your manager enough to go with them? Are they providing an environment where you can do X, Y, and Z? So you ask those questions of your staff and get their feedback. That's how you measure that. People will tell you when they are not feeling it. So that is the primary way to measure whether inclusion metrics or measure where inclusion efforts work. And then you have to me also provide this skillset to your managers. Don't think I might've mentioned this on the last podcast we did together as a manager.
(25:06):
I don't think I was ever taught how to be inclusive. I don't think there was a skillset that we taught. We were taught growing up. I took a DEI training and they talked about those traits and I was like, huh, there are things that we can do to make people feel safe around us and make them feel like they can talk to us. And a lot of it's around vulnerability, showing your weaknesses to them, sharing your backgrounds, giving everybody an equal opportunity to talk. And to be clear, when I say equal, there's also that not to be mistaken or equitable, which you can't treat everybody the same on your team either. You have to figure out the individual needs of what each of your team members need. I tell people all the time, I don't treat all my kids the same. So my one child needs totally different things than my other child.
(25:59):
I have two boys. You would think they would be alike, but they are very different. So I have to teach them in different ways and I have to reprimand them in different ways. One hears one thing, one hears the other. So it's just like that with your colleagues. You can't treat them all the same, treating them all the same as a disservice to them. And so you have to, that's what being a true, good, inclusive leader is. And so all these type things I think are what go into that and has to be a part of the process to help us determine if we are really being the inclusive profession that we want to be.
Dan Hood (26:37):
Just when you said the things we don't teach managers to do the list of things that they're not taught, you're a manager now. Go run some people with no training. I mean of all kinds of any kind really, but certainly not how to be inclusive. But I like those points about one about vulnerability and one about being prepared to change how you work with different employees because it's important. As you say, different people will need different things or respond to different things. But the important thing being that everyone knows that your concern and your goal for everybody is the same, right? That everybody feels good, everyone feels productive, everyone's able to do what they want to do, and everyone feels they could be themselves at work. And I like that because it's very specific, right? That's a specific thing you can think about as you go to manage the people that you're managing or as you go to train your managers, if anybody would ever train managers, that would be great. But to train 'em in those kinds of things to sharing their backgrounds so that you can understand other people's backgrounds, right? Exactly. Half the reason exactly you tell people about your own background is so that they will then tell you about theirs and you can compare and contrast, et cetera, et cetera.
Crystal Cooke (27:39):
In my culture, we do X. What do you do on your culture? Yes,
Dan Hood (27:44):
Exactly. Oh wait, you think that's the way it should be done? Oh, okay, yeah, no, we think it should be done this way or et cetera, et cetera, et cetera. Exactly. Because a lot of that comes down to literal, just how you operate in the office, how you handle yourself in the office, different people. And this isn't necessarily even just race or culture, it's just where you come from in the country. Absolutely. Have different expectations. So for that, particularly a broader sense of what diversity is can be super helpful to understand that people will come at the same set of circumstances from a very different position. And if you don't know what they're coming from, the results could be disastrous. But anyways, I like that specificity. And are there any other sort of specific things like if someone came to you and said, I can only do one thing for DEI for the next month, what should it be? What would be a quick thing? Maybe you can get a quick win on it, or if not, that's fine, but it's something you can do right now. Anything spring to mind? I know that it's a hard question. It is a long-term thing to work
Crystal Cooke (28:46):
Out there. I was going to say there is no one thing honestly, but
Dan Hood (28:49):
You got to do a million things. But what's one thing I could do right now? Or is there a thing that I can do right now? Or really, you got to play the long game.
Crystal Cooke (28:56):
I think in the spirit of this discussion, I think the one thing that I would probably, and this is what I bring up most with most people, is to not waiver on what you're doing. Keep full steam ahead on your efforts. Do not overreact. Do not let this fear affect you from doing what we need to do as an organization and as a profession. But then the second thing that I would say is inclusivity. Working on inclusivity in your organization, whatever that looks like to your organization, because we can work on the pipeline issue all day. We can work on getting all of these students, telling them how great the accounting profession is doing all these great things, but we got to be able to show up when they get here. We have to be able to have a place where they want to stay and thrive. And so if we aren't fixing the home, why would they even come in here? And so that is probably where I would tell people to put their energy, is getting our workplaces to a place where everyone feels like there's a spot for them there and that they can grow and that they can be the next leader. And so that's probably what I think needs to be
Dan Hood (30:11):
Excellent. Like I said, yeah, I mean fully understanding this is requires a million different initiatives and a million different programs in a million different ways over the long term to really make this happen. Absolutely. I think that's an excellent place to start. And it's something that everybody can do, right? That even if you're not a manager, even if at the lowest level you can
Crystal Cooke (30:31):
Do it on your own, you can find your own training or you can Yeah, exactly.
Dan Hood (30:37):
Just on an individual basis. So that's excellent. Again, we can also go back to more training for managers I think would be is always a good thing. That's a pet peeve of mine. The number of people who are promoted to do a job based on the fact that they know how to do the job that they're now managing, but not given any management skills.
Crystal Cooke (30:54):
But today out, just to put a little finer point on that, more training, it's the soft skills. I think as accountants, we tend to focus on technical training and how to do things technically, and we don't realize how critical the soft skills around people management is equally important to the technical.
Dan Hood (31:16):
Yep. Well, it's one of those things is that none of us are machines. And if you don't feel comfortable in a place, no matter how good your technical skills are, and again, this is to reduce it to business case level stuff, you're just not going to be as productive. You just can't be as productive. And as a manager, you can't be as productive if you don't understand the people who you're managing. If you don't understand what their concerns are and what they need and what they need to be successful, the best worker, they can be the best successful. Successful. And I think also, I just always like to throw this out, right? The pipeline can leak at any point, right? Pipeline can leak, absolutely. Someone who's been there for 10 years, there's plenty of other work for people to do. They don't need to stay at your firm and they don't need to stay in the profession. There's plenty of options for them, but the profession doesn't have many options. We need people,
Crystal Cooke (32:03):
We need to plug all those holes in the pipeline.
Dan Hood (32:05):
Excellent, excellent. We could talk for a lot more about this, but I have to say I'm super encouraged, more encouraged at the end of this conversation than I was at the beginning in the sense of it is not, this backlash is fairly limited and if we can stick to stay the course, we'll hopefully leave it behind us. Any final thoughts though before we go?
Crystal Cooke (32:27):
No, I think I will say this does not mean that there does not need to be more work. We need to continue to keep our efforts going and keep making sure that we are doing work to change these numbers in a positive direction. So despite the hurdles that we face, don't let those hurdles become barriers. Let's let those continue to be hurdles that we overcome and get past and move on and keep pushing forward.
Dan Hood (33:00):
Excellent. Alright. With that, as I said, I'm encouraged. I think that's worth, people should keep up that effort. As you say, crystal cooker, the A-I-C-P-A, thank you so much for joining us.
Crystal Cooke (33:11):
Thank you. Thank you for having me.
Dan Hood (33:13):
And thank you all for listening. This episode of On the Air was produced by Accounting Today with the audio production by Adnan Khan. Ready to review us on your favorite podcast platform and see the rest of our content on accounting today.com. Thanks again to our guest and thank you for listening.