Published : 1 month ago, on 01/11/2024

Megan Weis

By Megan Weis, VP and General Manager, FAO Services, Personiv

Finance and accounting have a gender gap problem, especially when it comes to leadership roles. Despite comprising nearly 60% of accountants and auditors in the United States, women remain underrepresented in leadership roles across accounting and finance. Only 39% of partners at accounting firms are women, and just 18.5% of Fortune 500 and S&P 500 CFOs are women.

The lack of parity in leadership is more than a fairness issue, it’s  a business issue. Researchers have found that when women fill leadership roles, companies benefit in multiple ways. The presence of women on top management teams allows companies to pursue change and focus more on research and development while reducing risk. Companies with more women on their board of directors are more likely to respond quickly to customer health and safety issues, reducing the risk of penalties, lawsuits and brand damage. Further companies with the most gender diversity in leadership positions are more profitable and perform better overall, per McKinsey research, with “a substantial performance differential—48%—between the most and least gender-diverse companies” at the executive level.

A lack of women in leadership causes organizations to miss out on these benefits. It also risks compounding the negative impact of the talent shortage caused by the ongoing decline in young adults studying accounting and finance. If more women opt for different fields because of the lack of leadership opportunities in finance, that may widen the talent shortage and accelerate rates of burnout among already overworked employees. Burnout, in turn, contributes to retention problems and workload-related mistakes that can put organizations’ reputations and compliance at risk.

What’s (still) standing between women and leadership roles?

Factors within an organization, across the industry, in the home and in society at large can work against women’s advancement to top roles. For example, a Pew Research Center study of U.S. heterosexual married couples found that even when both partners work and earn close to the same pay, women spend an average of 4.5 hours more each week on chores and caregiving. That’s the equivalent of spending more than five 40-hour work weeks on these tasks every year.

The gender gap also persists in finance and accounting pay, with women accountants and auditors earning around 91 cents for every dollar their male counterparts make–an annual difference of more than $7,200. Bias, even unconscious bias, still plays a part as well. If an organization’s leaders don’t view the gender gap as an issue, it won’t be addressed. Even in more egalitarian countries like Sweden, one of the top nine nations for progress on gender equity, there’s still a notable lack of women in business leadership. Just 13% of publicly traded companies in Sweden have women as CEOs, for example, leading some political leaders there to propose quotas as a way to reach equity faster.

A couple of years ago, it looked as if the interest in DEI as a way to improve business outcomes would accelerate progress for women, people of color, and other underrepresented groups in the U.S. Now, some organizations are backing away from DEI initiatives that could help women move into leadership roles, putting progress at risk.

Committing to progress on equity in leadership

Even with many factors contributing to the leadership gap in finance and accounting, organizations have the power to create change internally, as long as one key element is present: the CEO and other C-level leaders are committed to closing the gender gap and fostering an inclusive work culture.

The way the CEO and other leaders treat women influences the entire company culture, which is why leaders have a key role to play here, especially when it comes to identifying potential women leaders, investing in mentorship and training for women, and educating men to be effective allies. Research published in the Harvard Business Review found that untrained but well-intentioned male allies are less likely to recognize the challenges women face, while men who participated in allyship training are twice as likely to recognize harmful behavior toward women at work.

Equal pay initiatives can help retain women and motivate them to pursue leadership tracks. For example, LeanIn.org recommends specific steps for organizations that want to close their pay gap:

• Review salaries across the organization. This will help quantify your existing gap and help you create a plan to close it.
• Audit hiring and performance review processes to see if implicit bias is systemically advancing male candidates and employees, which can also contribute to pay disparities.
• Foster women’s opportunities within your organization. Many women are expected to do low-value office chores like party planning while also getting less access to high-profile work assignments that could raise their profile among leadership. Correcting these problems can support their professional growth.

Flexible work environments can also help support women’s career development. Flexible workplaces benefit the entire organization, particularly employees who provide care for children and other family members and employees with disabilities that require accommodations around schedules and work location. Already, 20% of women say that having flexible work options has allowed them to continue working or to avoid reducing their work hours.  Adapting promotion criteria to the realities of flexible work is a critical step to avoid promotions that are geared towards employees who spend more time in the office over those who work flexibly or remotely.

For all of these initiatives, it’s important to use data for accountability. Organizations that want to close their leadership gender gap need to track KPIs that measure outcomes specifically related to women’s experiences on the track to leadership, such as pay equity, retention rates, financial KPIs, and mentorship program participation and outcomes.

Futureproofing by closing the leadership gap

Profitability, high performance, openness to innovation, and aversion to unnecessary risk should be goals for every organization, and cultivating women for leadership roles can help achieve them all. Gender equity in leadership can also encourage younger women to stay with the company and pursue their leadership goals, creating a virtuous cycle that amplifies the role of women in leadership over the long term. Closing the leadership gap won’t happen overnight, but it will happen faster if today’s leaders commit to allying with women to make it happen.

Megan Weis is the Vice President and General Manager at Personiv, where she spearheads the development and management of a world-class Finance & Accounting Outsourcing (FAO) offering. With over 20 years of experience in finance, accounting, and business process outsourcing, Megan expertly combines her industry knowledge to deliver exceptional value to her clients