Archives For diversity

Nikki Walker

By Nikki Walker, diversity and inclusion expert, More2Gain

What springs to mind when someone says Finance Director? Or Diversity Director for that matter? Very different skills and personalities, I am sure, based on some fairly ingrained stereotypes. But, actually, does anyone really care?

I certainly did. When I moved from being a Finance Director to Head of Diversity & Inclusion, EMEA, at Cisco Systems, I found myself battling a tidal wave of stereotypes and bias.

“What on earth are you thinking of?” was a typical reaction from many of my finance colleagues. Followed closely by, “I’ll give you three months before you are begging to come back to the real world of finance.”

And from my new diversity colleagues, both internal and external, I also encountered a fair amount of scepticism. “Why would a finance person want to do this job? She hasn’t even worked in HR! Will she really be able to get to grips with this?” And this, no less, from diversity professionals!

And so I found myself in the rather novel position of having to defend my choices, prove I hadn’t taken leave of my senses and overcome some pretty ingrained views about the value and abilities of two very different professions – from both sides of the camp.

This is a real pity and a missed opportunity. Because it is when we work together and blend different skills that we achieve the best solutions. Whether it was offering a fresh pair of eyes, critiquing strategies or applying “forensic commercial” analysis to combine many strands of employee data and surveys, the new insights I shared helped leaders understand the opportunity they were missing shape thinking and bring about lasting change.

The very fact that I was an “outsider” gave me a huge advantage, enabling me to challenge orthodoxies and come up with new perspectives and solutions. My finance and commercial skills enabled me to anchor the case for change in measurable business benefit.

I also learned a huge amount from spending time with people whose viewpoint is not “centred on the numbers.” In short, I realised how much I had to offer… and how much I had to learn. A journey that is still ongoing now that I have changed careers again to run my own inclusion and diversity consultancy, More2Gain, focused on helping organisations realise the power of Inclusion and Diversity,

And so I would like to leave you with a final thought. In finance, we focus heavily on measuring “returns.” Well, I can say with absolute certainty, that there are rich returns to be gained (for you and your organisation) whenever you connect with people outside of your group.

So reach out to your diversity colleagues and offer to help. Partner with them to jointly seek out new ideas. Be bold, make new connections, use your finance skills and help to advance diversity and inclusion in your organisation. Whatever you do next, do not allow convention and stereotypes to hold you back. I didn’t and I really am the richer for it.

ACCA, in collaboration with ESRC (Economic Social Research Council) and Brunel University, is launching a paper about diversity in business later this month.

Accountancy is looking different

accapr —  6 February 2014 — 1 Comment

Sue Almond-1528

By Sue Almond, technical director, ACCA

I recently chaired a technical conference in Tirana in Albania. Other than the location, there’s nothing particularly new about chairing a conference. That is until one of my fellow panellists commented on the composition of the audience.

I used my privileged position as chair to do a quick scan and headcount – a typical 80/20 gender split in a room of around 100 accountants.

But wait – the 80 looked like me! Well, not exactly, most were much younger. I couldn’t resist pointing out to my (male) panellist that he might now appreciate how I have felt for most of my professional career. Accountancy is clearly an attractive career choice for young women in Albania.

I started to reflect on some of the other things I had noticed on this short visit and realised that this was a very different profession to what we typically see. Things are changing.

The previous day, I had been speaking at a conference organised by the Federation of Mediterranean Accountants. This had attracted an audience of over 220 – in a country with only 200 registered auditors. How often do we get this level of interest?

And the FCM conference attracted huge media interest, with Arnold Schilder of the International Auditing and Assurance Standards Board and Andre Kilesse of the Federation of European Accountants interviewed for primetime TV. It is highly unusual as an accountant to walk into a room with a whole bank of TV cameras, or to have the paparazzi buzzing around during a presentation on audit.

What probably made the greatest impression on me was the clear collaboration between the government and the accounting profession to build the economy for the benefit of all. Both the Albanian Minister of Finance and the Minister of the Economy addressed the conference. Their overriding message was that the accounting profession provides a bridge – that it can transform the past and make it into the future.

There was also a strong recognition at government level of the value that audit quality and oversight bring to the development of a strong and credible financial market. The emphasis is very much on reliable – trustworthy – financial statements, and the recognition that everyone has a part to play in generating confidence.

At home, back in the UK, I was listening to a news item on Radio 4 about the latest report from Cranfield School of Management, which reveals that women now make up 19 per cent of FTSE100 and 15 per cent of FTSE 250 board positions. The BBC reported that this is the highest participation rate since the university started keeping track in 1999.

This immediately reminded me of the conference in Albania, and that change for the accountancy profession is happening on a number of levels.

All this has made me realise that accountancy is looking different – a world where governments and the profession collaborate for the public good. Where accountancy is seen as critical to the future. Where accountancy is in the news for all the right reasons. Where women are the future of the profession. AND where the sun shines.

This blogpost first featured in The Accountant Online, November 2013

By Manos Schizas, senior economic analyst, ACCA

If you have been following any European politics this week, apart from the ECB’s bond-buying programme, you will already know the European Commission is expected to propose that, by 2020, 40% of all non-executive board members of European companies should be women – with companies risking fines or other penalties if they fail to comply. Although no one has seen anything other than leaks for the time being, plans are predictably meeting opposition from many quarters.

ACCA being well versed in Brussels etiquette, we do not comment publicly on proposals the EU institutions haven’t placed in the public domain. However, we’re also not new to the debate on quotas, which has been going on throughout Europe and beyond (e.g. in Pakistan) for quite a few years. Our positions have evolved over time (see here, here and here) and will continue to do so, reflecting the new experiences and evidence in our markets. On the other hand, our core values of diversity, opportunity, innovation, integrity and accountability haven’t changed.

While we wait for the full proposal and ACCA’s response, I thought I’d share with you a real gem in the diversity research literature. It comes from the Bank of Finland of all places, which recently published a remarkable research paper on the subject by Yiwei Fang, Bill Francis and Iftekhar Hassan. Its title: More than connectedness – Heterogeneity of CEO social network and firm value.

Rather than focusing on diversity among board members, the researchers looked instead for the diversity within – the extent to which individuals have access through their social networks to truly different perspectives and could draw on experience, skills, knowledge and mindsets different from their own.

In order to measure the diversity of CEOs’ social networks, the researchers used a massive biographical database of EU and US CEOs in order to track down business leaders’ contacts among the business world from their school days onwards. They then analysed the heterogeneity of these social networks in terms of gender, ethnicity, academic and professional background, as well as geographical dispersion around the globe. To be safe, they controlled for the overall size of CEOs’ social networks – after all, it’s easy to have a more diverse network if you know more people!

They also included as control variables a battery of factors already known to influence firms’ financial performance, including two traditional measures of board diversity (by ethnicity and gender), and tested against four kinds of outcomes:

a) sustained share price reactions following a change of the CEO

b) patents filed (as a proxy for innovation)

c) sustained share price reactions to mergers and acquisitions initiated by the CEO’s company

d) proxies of firm value and financial performance.

Their overall finding was that the more diverse the CEO’s social network, the more value they tended to add to their companies – they made a difference by enhancing innovation and export potential, as well as extracting more value from the firm’s investments, including major items such as mergers and acquisitions. As a result, investors typically pay a premium for the shares of companies who have just replaced their CEOs with someone with a more diverse network.

This resonates with earlier ACCA research. Back in 2011, we worked with Forbes Insights to look into the personalities of Europe’s business executives and whether they help influence company performance, and our work resulted in the report, Nurturing Europe’s Spirit of Enterpriseas well as some excellent online coverage. But what we found was even more satisfying.

The most innovative business executives, and the ones most likely to become CEOs, were a category we named ‘the Star Pupils’. This is what we had to say about them at the time:

STAR PUPILS. These are professionals who invest heavily in their own personal development, acquiring mentors with ease and making the most of other people’s expertise. Of the entire sample they are the likeliest to rise through the hierarchies of organisations, even when the dominant business culture is stacked against them. Women who thrive in masculine environments often fall into this category, and CEOs are significantly more likely than other executives to match the Star Pupil profile.

Star Pupils form the largest category at about 24% of the respondents. Over half of the Swiss respondents fall into this group, as well as 30% of the French and Italians, as opposed to only 16% of British executives.

Otherwise, Star Pupils exist in similar numbers everywhere: large companies and small, finance and IT, men and women. However, only 5% of CFOs, treasurers or controllers are Star Pupils. It is not clear why this might be, as the traits of Star Pupils would appear to be adaptive in any function, but one possible explanation arising from the research literature would point to the lack of a full-fledged mentoring culture in these functions.

Looking even deeper into the Forbes data, we were able to unpack the particular personality traits that made up different categories – ‘pursuing personal development through others’ was the dominant characteristic of Star Pupils (see a comparison here). The Movers and Shakers, who shared a lot of the Star Pupils’ innovative capacity, also scored well in this dimension.

Here’s an interesting question – would the findings of Fang et al apply to CFOs as well? Do CFOs with more diverse social networks create more value? Is it important that the social networks of CEOs and CFOs overlap/complement each other? And at any rate, how diverse are the social networks of CFOs? Going by the Forbes data on ‘pursuing personal development through others’, finance professionals were slightly worse than average social networkers and our small sample of CFOs in particular were even worse. I’ve written to the researchers and maybe one day we can repeat their analysis.