REVEALED: Racial Inequality in Accountancy

According to research by the Telegraph, out of the 3,000 partners of the UK and Ireland’s Big Four accounting firms, just 11 of these are black — a staggering figure highlighting the enormous racial disparity in senior roles. This small figure equates to less than 0.4 per cent of the total. In light of recent events and protests that have swept the world, here we will discuss the racial inequality in senior roles in Ireland and what more could be done to bridge the gap and create more equal opportunities for people of different races.

 

Breaking the status quo

The statistics showed that leading firms including Deloitte, EY, PwC, and KPMG have a combined 11 black equity partners. And this isn’t just in the world of accountancy — only six of 800 partners at UK Magic Circle law firms are black with two of these five firms having no black partners, and no black chief executive officers in the FTSE 100. Partners in prestigious firms across Ireland are instrumental in Euronext Dublin (the largest companies by value) as well as equity groups and hedge funds, earning annual salaries of €2.3 million.

 

Sadly, these statistics aren’t reflective of only the UK and Ireland, but across many countries. Research into the Irish labour market in 2018 reported that black Irish citizens are twice as likely to experience discrimination while seeking employment in comparison to white Irish people, and black non-Irish people are five times more likely to experience discrimination and less likely to work in managerial or professional roles. Although this research has noted that the racial gap in securing senior level roles has narrowed, there is still a long way to go before there are more opportunities for ethnic minorities, with white people in senior roles earning significantly more than black people who aren’t afforded the same prospects and promotions.

As the Irish jobs market is continuously improving alongside increasing immigration levels, it’s becoming increasingly important to ensure black workers are represented more in employment as well as professional and managerial roles. When there is a lack of black people in certain positions and industries, it can be discouraging for budding accountants, graduates, and apprentices who feel like their goals are limited due to a shockingly low rate of representation — everyone needs role models who look like themselves.

 

So, why aren’t black employees getting more white-collar jobs? There are thousands of black people who are just as qualified as their white counterparts, who deserve the same opportunities, however, have to work much harder to advance. Research has found that black professionals change jobs more frequently due to being stuck in the same role and effectively ignored by senior management and those overseeing the promotion process to be considered a serious candidate.

 

What can be done?

The accountancy and auditing profession is an industry particularly lagging behind the conversation around diversity, with the vast majority of partner level roles occupied by white men. Accounting businesses will stagnate when everyone thinks the same way and are limited by their own experiences — adding new perspectives will be an invaluable resource for companies. Think how much accounting has evolved in 30 years — from global corporations to small to medium-sized businesses, accounting has made a huge leap from loading software on a CD rom stored locally to leveraging technology for invoicing software and increasing financial efficiency and facilitating future planning. It will only continue to improve with a diverse workplace, and true corporate diversity can’t be achieved unless there is diversity at the top — with Ireland having a long way to go. Conversations are happening more about diversity, not just to benefit business, but to offer equal opportunities because it’s the right thing to do.

 

Best practices encourage firms to embrace and encourage diversity. So, what can be done?

 

Diversify the board

The culture of promotion which facilitates the exclusion of qualified black candidates could be attributed to those who may not be part of the social networks that board members and chief executive officers use when considering a candidate. Board members typically play it safe and hire or promote similar candidates. As there are significantly fewer black executives initially, the same white professionals are picked over and over. If executives improve their recruitment methods and increase the pool of potential candidates by seeking diverse attributes like ethnic minorities, it will better utilise the talent pool.

 

Research from 2019 found that there is a “worrying” lack of planning for board diversity in Irish organisations with half of participants responding that they were instead directly approached for their role by the board. Implementing legislation in appointing a minimum number of executives with different attributes can help tackle this issue and has been used successfully in Norway since 2008 to improve gender diversity in the boardroom, with at least 40% of directorship positions being required to be filled by women. Spain and France are also looking at introducing similar mandatory requirements for gender diversity, which is something Ireland could look at to improve racial diversity.

 

Accounting software QuickBooks commented: “While Intuit’s board does not currently have a black director among its members, we’ve made progress on having a board that brings a diverse set of voices and experiences to Intuit. However, we know that’s not enough and that we can do better and are consistently looking to diversify our board to represent our employees and customers.

 

“Furthermore, we believe that it’s the role of corporations to be on the front lines of driving necessary, lasting change for black communities. Equality for the black community means we reach representation at all levels — from our board of directors to our C-suite to our employee base. We are committed to ongoing conversations, improving the ways we hire and retain talent at all levels, and making continued progress to support our black colleagues, friends, and communities.”

 

Diversity training

Racism isn’t always overt racism with blatant remarks and aggression but can be covert and displayed through microaggressions and prejudice, which can be just as damaging for ethnic minorities in the workplace who may feel uncomfortable raising the issue. Overcoming the way people think can be done through diversity training at work so colleagues know what isn’t acceptable and how their behaviours and words can actually be offensive. People need to be called out on their biases and learn to become better — in the 21st century there is no excuse for covert racism and microaggressions.

 

Also creating targeted training for emerging leaders who could potentially serve as directors in the future could help those with the potential to grow and progress for roles in the future rather than being ignored and feeling forced to move jobs seeking other opportunities.

 

 

Although there has been some progression over the decades, there is a long way to go and the conversation isn’t ready to end yet. With pressure from the public and workforce, things could change.

Sources

https://www.telegraph.co.uk/business/2020/06/18/big-four-accounting-firms-have-just-11-black-equity-partners/

 

https://www.telegraph.co.uk/business/2020/06/10/just-six-800-partners-magic-circle-law-firms-black/

 

https://www.thejournal.ie/ceo-pay-ireland-2-4418117-Dec2018/#:~:text=On%20average%20across%20the%2026,salary%20of%20the%20CRH%20boss.

 

https://www.irishtimes.com/news/social-affairs/black-irish-citizens-twice-as-likely-to-experience-discrimination-1.3734589

 

https://www.cbsnews.com/news/black-professionals-hold-only-3-percent-of-executive-jobs-1-percent-of-ceo-jobs-at-fortune-500-firms-new-report-says/

 

https://quickbooks.intuit.com/ie/

 

https://alexander.co.uk/news/how-accounting-has-changed-over-the-years/

 

https://www.irishtimes.com/business/irish-firms-not-planning-for-board-diversity-study-finds-1.3964028

 

https://www.accaglobal.com/lk/en/student/exam-support-resources/professional-exams-study-resources/strategic-business-leader/technical-articles/diversifying-the-board.html#:~:text=Another%20measure%20to%20enhance%20board,stakeholders%20can%20make%20proper%20evaluation.

 

 

 

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