Deloitte LLP made a historic move this week, naming Cathy Engelbert as the first female CEO of a Big Four accounting firm.
Engelbert will take over the top spot at Deloitte on March 11, succeeding interim CEO Frank Friedman (see Deloitte Elects First Female CEO). She has been heading the audit side of the firm, known as Deloitte & Touche, but will be overseeing the entire U.S. firm in her expanded role. She explained her plans for the firm in an interview with Accounting Today on Wednesday, and gave advice for how more firms can develop women leaders and greater diversity in their ranks.
“I think our priorities will be our investments in people,” she said. “We’re very committed to building our skill sets for all of our businesses, including our audit and tax businesses. We’re going to be hiring 24,000 people in our next fiscal year. That’s going to be an all-time high for us.”
She aims to build talent across Deloitte’s various practices, including the firm’s growing advisory and consulting side.
“We’re obviously investing in both sides, in our traditional audit and tax, and our advisory businesses, in our consulting businesses,” said Engelbert. “We don’t look at it as one or the other. They can both grow and add to the development of our people, and the deployment and experiences of our people. I actually spent four to five years on our advisory side, working in our capital markets group. I got that experience, took a risk there, and came back to audit, where I’ve had a successful career as a lead signing partner on some of our large clients. I think it’s all about the portfolio of businesses where we can give our people the best experiences to learn and grow.”
Engelbert also plans to build up the technology side of the firm. “We’re looking to invest and double our investment over three years in innovative methodologies,” she said. “I’m coming from being CEO of our audit practice. We’re investing in different technologies: artificial intelligence, machine reading, as well as data analytics around assessing risk in a better way to really deliver our audits.”
Younger employees at Deloitte are particularly keen to work with cutting-edge technology. “Our young people are excited that we’re using technology in different ways to deliver the audit,” said Engelbert. “The passion that you see in their eyes when they talk about using technology because they’ve grown up in a much more connected world than we did—the passion they see in the profession—is a real big positive. I’m very optimistic about the future of the profession.”
Engelbert expects to leverage other innovative types of technology at the firm, such as artificial intelligence.
“Artificial intelligence is a hot term, but it actually has been around since the late ’50s and only recently have we figured out how to use it in today’s technological environment,” she said. “You teach the machine how to read things that today we’re still manually doing. If your client has 10,000 files, we might have read a sample of them in the past. Now you can have the machine read it in seconds, give you outliers and help you assess risks in the contracts, and give insights to the clients about their own contracts. It’s a really powerful tool that I think is going to change and reshape the way audits are delivered in the future.”
Audit confirmations and inventory counts are other areas where Engelbert sees technology advancing.
“I think all the firms are working on things around this, a straight-through processing tool rather than a manual mailing,” she said. “Inventory apps on a fast smart phone, instead of using manual tally sheets—you can have it all on a smart phone that projects it back to corporate. You can do a lot of things much more effectively and efficiently using technology. All of these things, I think, are driving a positive change, and a renewed, fresh look at the profession.”
Engelbert anticipates that the drive for developing such technology will come internally at the firm, as opposed to doing acquisitions. In recent years, Deloitte has acquired data analytics and business intelligence technology companies such as Recombinant Data and Oco. Instead, Engelbert prefers to go the route of forming partnerships with tech companies.
“I think a lot of this is about the ecosystem of alliances and collaborations, and using capabilities of different technology firms along with ours,” she said. “Straight up acquisitions, I don’t see as a kind of ecosystem. I do see partnering with technology firms and analytics firms to advance all of our capabilities more broadly for the benefit of our clients.”
Fostering Women Leaders in Accounting
In her new, highly visible role, Engelbert is sure to become a role model for women not only at Deloitte, but at other accounting firms.
“As you know, we probably don’t have enough women leaders,” she said. “But what’s important about my election into the CEO role at Deloitte is to provide a role model for the next generation of diverse leaders at Deloitte. I don’t know if you’re familiar with our history around our women’s initiative, but I think this is a tangible demonstration of our commitment over several years to the advancement and retention of women. I can’t tell you how many inspirational messages I have received from our men and women about how they’re inspired by my election. Being the first female CEO of one of the Big Four, I certainly intend to pay it forward.”
She is feeling optimistic about the talent she sees in Deloitte’s female employees. “We have a lot of great women coming up in the ranks,” said Engelbert. “I’m very optimistic because 50 percent or a little bit more when we hire them out of their accounting programs in college are women. We need to focus, and we have, on the different work-life fits that a woman has throughout her career if she ends up with a family. I’ve raised two children. They’re teenagers now, but they had different needs when they were babies versus toddlers versus today as teenagers. The culture at Deloitte has really facilitated my ability to rise to this level, so if I can be that role model, I think that’s a great part of this story.”
Engelbert had role models of both genders at the firm as she rose through the ranks. “I certainly had women and male role models, quite frankly,” she recalled. “I grew up in a family of eight kids with five brothers, and then went to a male-dominated school where the ratio was four to one, and then joined a profession at a male-dominated time. I didn’t necessarily seek out only women role models. I sought out both.”
She felt it was necessary to make the most of her experiences and opportunities at the firm. “For me, this was about the experiences that I was given,” she said. “I took some risks in my career to get a wider variety of experiences to be considered for a role like this, including sponsors, and partners who sat in rooms when there were deployment decisions being made on different experiences. They would say, Let’s let Cathy do this.’ We’re the first firm to have a woman chairman of the Big Four. That was Sharon Allen. We had the first minority CEO [Friedman’s predecessor, Joe Echevarria, a Latino from the South Bronx who departed the firm last year to work in public service for the group, My Brother’s Keeper, to help minority youth]. And now me as the first woman CEO, so I’m really proud of the culture here. Mike Cook started all this back in 1992 when he launched our women’s initiative for the advancement and retention of women. I’m really a beneficiary of all that.”
Smaller firms than Deloitte can adopt similar initiatives to develop more women leaders, Engelbert believes. “I think it’s all about the culture, and it’s all about making sure that those firms who may not have the resources of a Big Four firm are taking advantage of the flexibility, the predictability programs that they may want to offer, and make sure women believe they can balance it all and ultimately rise to leadership positions,” she said. “I know it’s more difficult when you have smaller numbers. I do meet with some of the small firms and talk to them about my journey. It seems to resonate with anyone, even smaller firms.”
Two important factors are mentoring and sponsorship. “Sometimes if you have a mentor who’s not in the room at the time they’re making decisions about the experiences you might be eligible for, you don’t get the development you want,” Engelbert pointed out. “Mentorship is really important for your own personal development, making sure that you’re seeking the right opportunities and then having the right people in the room when those decisions are being made about your deployment or the opportunities you might have, whether or not it’s an international assignment. I did an assignment in our national office, in our technical group, which actually set me on the path I am today. A lot of different experiences are being talked about in rooms where, if you don’t have a sponsor in that room—men and women, but especially women—you may not get that opportunity. That’s how leadership development works, and at Deloitte we’re very committed to that.”
Engelbert also plans to continue the work of her predecessors at fostering diversity at the firm.
“One of the things that I’m proud of is that in the last year women and minorities accounted for 66 percent of our new hires,” she said. “More than 1,600 of our partners and directors at our leadership level at Deloitte are women and minorities, so we’ve really made tremendous progress.”
Retention is one of the big challenges, however, she admits.
“I think the challenge always is retaining, making sure that our people feel valued for what they’re doing for their clients and for us, and that they feel they have mentors and role models to advance and develop,” said Engelbert. “With the millennial generation coming in, we’re working hard on different angles of how we retain the millennial generation to be the future leaders of Deloitte because it is a very diverse population coming into the firm today.”
To recruit young employees, Engelbert plans to continue events such as the Team USA Road Show that Deloitte holds around the country at college campuses, featuring Olympic athletes like figure-skating gold medalist Evan Lysacek and Paralympic champions like swimmer Brad Snyder (see Deloitte Spotlights Olympians to Inspire Students). “We obviously are very proud of our association with the U.S. Olympic Committee and certainly also proud of our association with the veterans as well as all of our, I’ll call it, corporate citizenship,’” said Engelbert.
Community and philanthropic events are attractive to many young people who want to work at a firm that gets involved in volunteerism for good causes.
“We have an Impact Day at Deloitte, where one day everyone has the day to go and give back in the community,” said Engelbert. “Much of our 65,000 employees actually participate in that, including myself. I’ve done Junior Achievement. I went to a children’s specialized hospital last year, so I think we have a really good story for the recruits coming out from universities. We’re still obviously focused on hiring the best and brightest. We’ll hire 24,000 this year. Recruiting is something I still like to do. I’m on the accounting advisory board at Lehigh University. I even get involved there in talking about curriculums.”
Engelbert is encouraging Lehigh and other schools to offer subjects such as data analytics in their curriculums to meet the needs of today’s businesses. She also plans to keep expanding Deloitte University, which has proven to be a training ground in recent years for Deloitte’s employees, originally in the U.S. and now internationally.
“We built Deloitte University during a downturn,” Engelbert pointed out. “It was a $300 million investment. It’s a leadership center where our professionals receive their formal learning and development. The camaraderie it builds, the culture it builds, are amazing. I was there just last week. Every time I leave there, I’m just so proud of what we’ve done. In this world of interconnectivity and everybody doing everything online and with technology, it’s still nice to get together live and talk with people and really add to their leadership development, so we’ve continued to invest heavily in Deloitte University. We also have a Deloitte University in Europe now and we’ll soon have one in Asia.”
Engelbert hopes to inspire more women leaders in the accounting profession, both at Deloitte and beyond her firm.
“I think my election is all about our people and I’m really excited that we were able to have a good story like this,” she said. “For an auditor like myself, it’s great to represent the profession. If I can help inspire more to come into the profession and more to develop their careers in the profession, that’s exactly what I want to do.”
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