There are significant changes occurring in leadership and the professional landscape in 2014, a trend that is likely to continue. That trend is the ascension and promotion of the female executive. Mary Barra is the CEO of General Motors, a first for the auto industry, and Angela Ahrendts is the new retail chief for Apple. Marilyn Hewson is in her second year as CEO of Lockheed Martin, and Facebook COO Sheryl Sandberg continues to talk about leaning in.
Yet, the high profiles of a few prominent female executives belie a stark reality: Only 23 women lead Fortune 500 companies. That’s a mere 4.6 percent. In 2014, most companies around the world, including professional service companies and accounting firms, continue to suffer from a gender gap.
Given our nation’s changing demographics, it’s a gap that the accounting industry can no longer afford.
According to the American Institute of CPAs, women represent about half of new CPAs in the accounting profession. Yet women account for roughly 14 percent of executive officer positions in business and industry, and 19 percent of partners in CPA firms nationwide.
Like so many other professional-service firms, the accounting industry needs to counteract the steep drop-off in the number of women in leadership positions between the associate/manager level and partnership. Our firm recently elected 18 new partners firm-wide, 11 of them women. It’s a step in the right direction, but nowhere close to where it should be if we are to remain connected to our changing clientele.
According to the AICPA, as baby boomers retire in significant numbers during the next 10 years, marketplace demographics are shifting toward increased numbers of female business owners and decision-makers. Women-owned firms are growing at a rate exceeding the national average.
Women-owned businesses are also growing in the Midwest. In 2011, Ohio ranked eighth in the number of women-owned businesses. Michigan ranked ninth and Illinois ranked fifth. These businesses are potential clients, and their requests for proposals require a diverse team.
Yet firms are losing a significant portion of their eligible, talented candidates for partnership and succession. How do we change those numbers? First, we must understand the roadblocks.
Meeting the challenges head-on
Facebook’s Sandberg consistently says you’ve got to get women to sit at the table and prevent them from leaving. Women face hard choices between professional success and personal fulfillment.
The Ohio Society of CPAs conducted a 2012 survey asking respondents to identify the most challenging issues facing working women. The vast majority pinpointed work-life balance as the most challenging issue, with many respondents describing their role as primary caregiver to children and/or aging parents in addition to their professional career. Other challenges identified, although far less frequently, included progressing up the career ladder and earning equal pay for equal work.
When the OSCPA survey asked what employers could do to foster the type of work environment where women thrive, respondents answered the open-ended question with the following responses:
- Offer flexible work schedules
- Provide technology that allows working at home during “off hours”
- Offer leadership training and mentoring
- Provide equal pay for equal work
Last year, the OSCPA launched the Women’s Initiatives Committee to represent female CPA leaders across Ohio who work in public accounting firms and Ohio businesses. The committee holds a series of networking events to determine and address the biggest needs and challenges facing female CPAs. Last year, the OSCPA launched the to represent female CPA leaders across Ohio who work in public accounting firms and Ohio businesses. The committee holds a series of networking events to determine and address the biggest needs and challenges facing female CPAs.
The Accounting MOVE Project is another benchmarking project geared toward retaining female leaders in public accounting and advancing women to partnership. Firms that participate in the Accounting MOVE Project are ranked based on the range, depth and success of programs and workplace culture proven to remove barriers to women’s success, especially at midlevel and above.
Many accounting and financial services firms are doing their best to close the gender gap by recognizing talent, developing it and working to open up leadership opportunities for women.
If companies can successfully provide resources, skills development and support, they will help themselves maintain and improve their ability to attract and retain women at the highest levels. The following are some recommended strategies to pave that path:
Plan – Create effective governance, strategy, action and communications plans. Make the partner promotion process clear. Taking the mystery out of the path to partnership provides clarity for potential female executives.
Career/Life Integration – Offer customized career and life integration strategies and solutions. This reassures potential talent that the company makes family and work balance a priority. A company’s inability to create a family and gender-friendly environment is known to be detrimental to both staff and client retention.
Networking and Visibility – Increase the visibility of female leaders. When we think of networking, we tend to think of going outside the firm, but making and sustaining relationships inside the company are just as vital. Providing younger, midlevel women access to leadership gives them the opportunity to ask questions, share challenges and seek advice.
Career Mentoring and Development – Implement a mentoring program. Navigating through the demands of the profession is a challenge that consistently comes up in discussions around the barriers to success. Knowing that help is just one call away alleviates some of the pressure. Also, offering targeted practice developmental opportunities plays a positive role in the advancement and retention of talented women.
Warren Buffett once said that America has forged its success using merely the male half of the country’s talent.
“The closer that America comes to fully employing the talents of all its citizens, the greater its output of goods and services will be,” Buffett proclaimed. “We’ve seen what can be accomplished when we use 50 percent of our human capacity. If you visualize what 100 percent can do, you’ll join me as an unbridled optimist about America’s future.”
In today's diverse business world, cultivating women in leadership isn't an option or an add-on –it's an essential component for any organization that wants to survive and thrive.
Robert Shenton is the managing partner of Plante Moran’s Central Ohio Region. He specializes in providing audit, tax and business advisory services to privately held companies, higher education institutions and not-for-profit organizations.