As the centenary of the first woman to be admitted to ICAEW approaches, there is undoubtedly much to celebrate about the huge strides towards gender equality that have been taken across accountancy in the past 100 years. Today, women make up almost half of those studying for an accountancy qualification worldwide. It’s a statistic that speaks volumes about the appeal of the accountancy qualification for women.
“This anniversary should be celebrated and used as an opportunity to take stock of the progress made,” says Brenda Trenowden, PwC Partner and global chair of the 30% Club. “There’s no doubt the women who fought their way into the profession a century ago would have worked harder and sacrificed more than their male peers, and these early pioneers should be celebrated.”
It’s also important to remember the forward-thinking male colleagues who provided sponsorship and opened doors, Trenowden says. Fortunately these days we have many more trailblazers and advocates. “Companies now realise that everyone has a role to play in driving equality and inclusion and that it’s critical for business success. The appearance of so many accountancy firms in lists highlighting the best employers for women is a testament to the culture shift happening in our industry.”
But any notions that the gender split of incoming ICAEW members suggests a case of “job done” are woefully misplaced. Delve beneath the surface and it soon becomes apparent that much remains to be done before we can truly claim to have achieved gender equality. If anything, the centenary serves as a call to action to build on the work done so far to reach equality of opportunity.
Despite women making up more than a third of qualified accountants worldwide, many service lines such as corporate finance and insolvency still remain the preserve of men. Dr Jane Berney, ICAEW, Manager, Business Law, says the combination of client and reporting deadlines often prompts women to focus their careers in less deadline-sensitive service lines. “What tends to happen is that women leave audit and move into tax or set up independent practices.” Similarly, the often long hours requirements of jobs in corporate finance when deals are underway are blamed for low levels of female representation in corporate finance. The 6% Club, a group set up to drive diversity in dealmaking, is named after the pitifully small proportion of female lawyers and accountants in the deal space.
Indeed, despite attempts to find out the breakdown of gender participation in the different service lines among the Big Four, none were able to provide that data. The fact that this information isn’t publicly available suggests that not enough effort is being made to encourage more women into the traditionally male-dominated service lines. Little will change until female participation is measured here. After all, the first rule of tackling an issue is understanding the scale of the problem.
The year 2020 also marks the 50th anniversary of the introduction of the Equal Pay Act, and yet the issue of remuneration disparity between the genders remains a moot point. The most recent statistics from the Office for National Statistics’ Annual Survey of Hours and Earnings show that the mean gap for full-time workers stands at 13.1%.
The introduction of mandatory gender pay gap reporting in April 2017 certainly forced a step-change in the focus on equality and inclusion across all industries. However, in itself it is not enough. “The structural pay gap that we see in most organisations is complex and institutionalised and will require a great deal of very deliberate and sustained action to fix,” Trenowden warns.
Similarly, legislation to facilitate flexible working for working parents has undoubtedly facilitated the rise of women up through the ranks. Statistics suggest that the huge drop off rates that the profession used to experience as women left to have children are no longer the issue they once were. However, women continue to lag behind their male counterparts when it comes to reaching the highest echelons of accountancy careers.
The Financial Reporting Council (FRC) warned that the audit and accountancy profession is lagging behind business when it comes to the diversity of senior management and called on it to lead by example after its most recent Key Facts and Trends in the Accountancy Profession report, published in October 2019, found that the vast majority of partner-level roles continue to be held by white men.
While women make up 46% of manager-level roles at audit and accountancy firms, just 17% rise to partner-level roles. Among smaller firms with fewer than 200 employees, 52% of manager-level roles are held by women, but just 11% of women hold partner-level roles. Perhaps more worryingly, the research highlighted that one in three UK audit and accountancy firms do not even collect diversity data for their workforce – and this while attempting to position themselves as advisers to corporations on their own diversity and inclusion strategies.
FRC Chief Executive Sir Jonathan Thompson says firms need to do far more to maximise their pipeline of future talent. “It is encouraging to see more firms implementing diversity and inclusion strategies and more women, ethnic minority groups and disabled people being appointed to middle management roles. More needs to be done to ensure the firms are not limiting access to the most senior roles.”
Over on the business side of the fence, and despite strong empirical evidence that proves the link between fostering more diverse mindsets and superior financial performance, a knowing-doing gap prevails. Although the percentage of women on FTSE 100 boards is on track to reach 33% by this year, the target recommended in 2018 by the Hampton-Alexander Review of FTSE Women Leaders, the latest Female FTSE Board Report from Cranfield University’s School of Management highlights worrying trends that suggest companies are appointing women for symbolic value.
Cranfield’s research reveals that female non-executive directors serve shorter tenures than their male counterparts (3.8 years compared with five) and are less likely to get promoted into senior roles. Across the FTSE 250, the percentage of female executive directors hasn’t even hit double figures (8.4%).
Sue Vinnicombe, Professor of Women and Leadership at Cranfield University, says even though financial literacy is an important prerequisite for many board positions, it remains “disappointing” that so few women are being appointed: “Everyone says it’s about the pipeline but it’s not the case in finance,” she says, adding that only 26 women in FTSE 250 companies are CFOs/FDs, just over 10%.
She points out that according to research by Cranfield University, 48% of women on FTSE 100 executive committees were promoted internally, compared to 62% of men, and warns that proactive targeting and development of women is important, as is the structure of jobs. “Gender equality has to be embedded in everything we do. Companies are looking much more carefully at why there’s a gap. The question is, will there be action?”
Professor Binna Kandola, Senior Partner of workplace psychology consultancy Pearn Kandola, said huge disparity remained between the public statements on gender equality and real commitment to driving change. “Our research shows there’s no difference in terms of competencies and yet men are still getting promoted more than women. We need to fundamentally examine what sorts of things are being said about men and women at each decision point and understand where biases lie when it comes to feedback, identifying talent and career development opportunities.”
There are common threads running through those organisations – such as GlaxoSmithKline and Diageo – that have made meaningful progress on female participation across all levels of the business. They understand the role of leadership and culture, and they make investments in time and resource in assessing the gaps between the culture they aspire to and the reality on the ground, using that information to develop and implement very focused action plans.
They also make managers accountable for delivering the culture change at every level of the organisation and take time to communicate these goals to their staff regularly and to link them to the corporate strategy. Those close to the debate remain upbeat, despite also being resigned to the fact that meaningful progress will take time.
“I am frustrated that we need to spend so much time advocating for change,” Trenowden complains. “The reality is that until we have achieved gender balance from the top all the way down throughout organisations, until we have enough female role models as leaders to establish cultural norms, and until organisations have truly inclusive cultures that allow everyone to thrive and feel valued, we can’t stop campaigning for change.”
Elysia McCaffrey, Interim Director of the Government Equalities Office, says: “We’ve seen countless news stories, opinion pieces and debate across society, as transparency has pushed any employers reluctant to take action into the spotlight, and shone a light on those businesses working tirelessly to achieve equality.”
McCaffrey says the biggest single thing companies can do to make a difference is understand that it’s good business sense to have a range of experience and skills in their boardrooms, and throughout their businesses. “I want companies to be using the gender pay gap data they have reported to identify why women are being held back in their organisations and being paid less than male colleagues. They can then develop clear, measurable, evidence-based action plans to tackle these issues and we will be supporting them to do this.”
Aside from the obvious moral argument, as this government builds a Britain fit for the future we want our economy to harness the skills, talents, and contributions of everyone, McCaffrey adds. “We are all better when society is fairer.”