Why Leadership is Key in Promoting Diversity
Across nearly every industry, profession and organization, diversity is seen as a positive goal for which to strive. This is validated by McKinsey’s 2020 Report “Diversity Wins: How Inclusion Matters,” which provided statistics proving the concrete benefits of having a more diverse workforce. As the general population in the United States becomes more diverse, recruiting candidates from historically marginalized groups will become essential to ensuring long-term viability.
However, a commitment to diversity must be more than the recognition of it as a good thing; diversity isn’t about ticking off boxes or establishing artificial quotas. Rather, it’s about involving the entire organization in the process of making more culturally sensitive and inclusive workplaces where everyone feels a sense of belonging. That’s why we need to move beyond focusing only on diversity and expand to include equity, belonging and inclusion (DEBI).
Lack of diversity is an especially acute problem in accounting. According to a survey released last year by the Institute of Management Accountants (IMA) and the California Society of CPAs (CalCPA), not only is there a lack of representation of female, African-American, Hispanic, Latino and LGBTQIA people in the finance and accounting fields in the U.S., but there is also a widespread sense that the field does not have the internal mechanisms to support staff from these groups, leading to high employee turnover. Astoundingly, the IMA/CalCPA study found that 43 to 55 percent of respondents from these racial, gender or sexual orientation groups have left a company due to a perceived lack of equitable treatment.
In the midst of the ongoing “Great Resignation,” where highly skilled and competent staff are switching jobs or careers en masse, organizations must prioritize building a DEBI culture that not only attracts but also retains and develops underrepresented talent. Increasingly, young people entering the workforce consider a diverse and inclusive culture to be non-negotiable. Leaders must act today.
In this series, I will explore the myriad ways in which leaders in finance and accounting can, and should, pursue tangible action related to DEBI. In this article, part one, I am focused on why DEBI requires proactive and continuous support from senior leaders – CPA firm partners, CFOs, etc. – if firms are going to stay competitive and profitable.
The first reason is that DEBI requires an investment of resources in knowledge, time and money. Training and upskilling staff to be culturally competent, understanding how to overcome biases and learning how to improve representation at all levels within the organization are essential in retaining talent and maintaining an inclusive environment. DEBI training should start at the top with a baseline of understanding the metrics and demographic make-up within your organization. Along with why/how diversity impacts the organization’s financial performance, incorporating DEBI into your strategic priorities and grasping the role senior leadership plays in successful DEBI initiatives are crucial.
Well-informed leaders make better business decisions, which leads to the second reason why DEBI requires buy-in from senior leadership: Measurable impact doesn’t come from minimal investment or passive engagement. For DEBI to be successfully integrated into an organization’s DNA, senior leaders must consistently demonstrate their support and active participation to ensure DEBI doesn’t become an afterthought that is relegated to a secondary or tertiary priority. The organization’s commitment should be commensurate with the desired ROI.
As with any other business goal, establishing key performance indicators should be linked to data and transparency. If new DEBI education, career development and mentoring programs are to be implemented, senior leaders must be held accountable in measuring success (or failure) and must report to colleagues and investors when necessary. Regardless of the initial success or failure of initiatives, organizations must not view DEBI as a sprint; rather, it’s a fluid and evolving marathon. Play the long game, and make the proper adjustments as needed.
Senior leaders in accounting and finance – and in every other field – should understand by now why investing in building an inclusive and equitable culture is not only the right thing to do, but also a strategic imperative. Growth, financial performance and long-term viability are dependent on how organizations adapt to the changing demographics in our society. The question will be, “How did senior leadership respond to and deliver on their DEBI commitment and aspirations?” In the journey to discover what works and how to move forward, one thing is certain: change starts at the top.