Accounting Firms Face up to Diversity Challenges
The accounting profession has long grappled with the question of how to diversify its ranks to provide better representation of women and minorities, particularly in the upper echelons of firms.
There has been some progress over the years, but many leaders in the profession agree that the gains have been disappointingly slow to take hold. The American Institute of CPAs set up a National Commission on Diversity and Inclusion last year to propose strategies to recruit, retain and advance under-represented minorities in the profession (see New Fronts in the Struggle for Diversity). The AICPA also announced a pair of online tools last year that CPA firms can use to foster diversity at www.aicpa.org/diversity.
Big Four firms such as Deloitte, PricewaterhouseCoopers, Ernst & Young and KPMG have been making a concerted effort to broaden their recruitment efforts, but minority-controlled firms remain relatively scarce. One of the oldest minority-controlled firms in the U.S., Mitchell & Titus, is part of Ernst & Young’s network (see Mitchell & Titus Marks 40th Anniversary in Bringing Diversity to the Accounting Profession).
M&T chairman and CEO Anthony Kendall recently told me, “I do believe that the accounting profession as a whole has really tried to have more diversity. I know when I started in the accounting profession back in the ’80s, it wasn’t a diverse profession. I still think today there is a lot of room for more diversity in the profession, but I will say that accounting firms, the AICPA and others have worked diligently to improve diversity.”
The profession has been making greater progress in adding more female leaders. Last month, Deloitte named the first female CEO of a Big Four firm, Cathy Engelbert. “We have a lot of great women coming up in the ranks,” she said (see Interview: Deloitte CEO Cathy Engelbert Shatters Glass Ceiling at the Big Four). Deloitte’s international network, Deloitte Touche Tohmatsu, followed up that announcement with another later in the month by naming an Indian, Punit Renjen, as global CEO (see Deloitte Touche Tohmatsu Names Punit Renjen as Global CEO).
However, examples like Engelbert and Renjen are exceptions to the general rule that the leadership of the top accounting firms generally remains in the hands of white males, as it has for generation after generation.
Despite efforts at wider recruitment, work/life balance, mentorships and scholarships to enable more young people to afford the increasing cost of a college tuition and earn a degree in accounting, many firms still fall short on having a set of employees who reflect the population outside their doors.
Particularly at the top levels, public accounting firms find it difficult to fill the upper management and partnership ranks with a diverse pool of accountants.
Many female and minority accountants, seeing the paucity of people like them offered partnerships at their firms, end up leaving after a few years for jobs in private industry, where they perceive more opportunity for advancement.
However, the answer isn’t always in private industry. A recent survey by Grant Thornton found that progress for women in the larger business world who hope to secure senior management roles also remains discouragingly slow (see Grant Thornton Finds Slow Progress for Women Business Leaders).
Efforts at diversity by the AICPA and the Financial Accounting Foundation may eventually prove useful (see FAF Diversity Initiative). Both organizations are working with groups like the National Association of Black Accountants to find ways to attract more minorities. The Association of Latino Professionals in Finance and Accounting, and Ascend, which caters to Asian finance and accounting professionals, are also playing a role. The professional associations and accounting organizations may eventually succeed in spurring more firms to expand their ranks to provide more opportunities for minorities and women in their upper ranks.
Do you think the accounting profession is doing a good enough job at promoting diversity?