Archives For Women on boards

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

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By Rosana Mirkovic, head of SME policy, ACCA

With such unprecedented focus on this topic throughout 2012, it’s difficult to imagine how such a high level of interest and activity can be sustained. Will the record increase in female NED appointments continue?

A voluntary target of 25 per cent of directors to be female by 2015 has been set in the Lord Davies report and it seems that companies are heading in the right direction towards achieving it – women now account for 17.4 per cent of the FTSE 100 board directors.

And what will happen with the European Commission proposals? In November the EC published its much awaited proposal for there to be at least 40 per cent women non-executive directors on the boards of big-listed companies by 2020. There is still debate on what this means in practice and to what extent will this translate into quotas for companies. It would appear the proposals deliberately avoid the term ‘quotas’ and instead refer to a 40 per cent ‘objective’, with unspecified sanctions against companies flouting the rules.

It is clear that over the past two years the gender equality debate has by and large been dominated by the women on board debate. It certainly has some high profile ambassadors. What we must ensure now is that we use this momentum to broaden the discussions.

We know that women are under-represented at senior levels in virtually all areas of economic activity and especially those with high financial rewards. While higher numbers of female non-executive directors would go some way towards addressing this, there is scarce evidence that it would change anything else.

In fact the Norway example that is so often used for the quota argument shows that despite 35 per cent of female NEDs on Norway’s publicly listed company boards, there has been no increase of female representation at the CEO level.

The UK is heading in the same direction – only 6.6 per cent of the FTSE 100 and 4.9 per cent of FTSE 250 of executive directors are women. In October 2012, two female FTSE 100 chief executives resigned (Cynthia Carroll and Dame Majorie Scardino) and once their resignations come into effect, this will cut in half the number of women holding the top spot at a blue-chip company (Alison Cooper at Imperial Tobacco and Burberry’s Angela Ahrendts will be the only two FTSE 100 female chief executives standing).

And this is what we are acutely lacking – a focus on why women remain under-represented in senior management positions. Issues such as stereotypes, the cost of childcare, pay inequality are the really difficult issues that are lacking high profile supporters and that are infinitely more difficult to solve and commit to such short-term targets. Two reports released last month (see here and here) show that for all the talk of women on boards, and there has been plenty, there has been no change in the prospects of women running big businesses. And this points towards a real danger of the women on boards debate overshadowing the real issues.

ACCA’s own research shows that stereotypes still remain despite the unprecedented focus of female board appointments. For this reason the language of finance is seen to help break down some persistent stereotypes about women’s competence and emotional nature. Finance is also seen as the language of the board and for women with a finance background it gives them access to the conversations. Thus, the finance qualification is seen as a masculine qualification that combats some of the female stereotypes.

We need more research that helps us understand better what is hindering women in their careers and more importantly, what is helping them succeed. The women on boards agenda does very little on this front yet it is the only issue we should be looking at. Once we have more women leading our businesses, it would seem the rest would take care of itself, including the numbers of women at board level.

After all, our research shows that for every board member in the FTSE 100, there are 5,500 employees, demonstrating a real need for a more bottom-up approach.