One of my EMBA students, Aranthan (AJ) Jones, kindly gave me permission to publish this post, which he submitted to one of the discussion forums in my managerial accounting course. He poses the question in the title. I’ll write a separate post soon offering some possible answers, but for now just let you read the background that makes the question a very good one.
Guest Post by Aranthan (AJ) Jones:
Problem:
How does moral accounting and/or value-selecting/value-driven accounting work in one of the least diverse professions in the world? I found myself asking this question after reading the Institute of Management Accountants and Financial Professional in Business’s recent report entitled, Diversifying U.S. Accounting Talent: A Critical Imperative to Achieve Transformational Outcomes.In the report, the Institute of Management Accountants (IMA) and California Society of Certified Public Accountants (CalCPA), worked with research partners, contributors, and advisors, to conduct a research study of diversity, equity, and inclusion (DE&I) in the U.S. accounting profession. This study focused on three demographic areas: race and ethnicity, gender, and LGBTQIA orientation. The first in a multi-part global series, this study included an online survey of more than 3,000 current and former U.S. accounting professionals and interviews of more than 50 accounting, human resources, and DE&I practitioners and academics.
The report highlighted the glaring diversity gap, and observed the difference between the demographic background of executive leadership ranks and the rest of the profession (as well as the U.S. population). The report also presented an assessment of the current state of DE&I in the U.S. accounting profession through key survey findings, oral histories of the study’s participants, and an in-depth, discrete look at each demographic focus area. Finally, the report examined the role of ethics in the profession’s DE&I progress and suggested solutions to drive change as presented by the study’s participants. The hope is that all the organizations and researchers involved in this study will use the report as a catalyst for widespread, targeted, and coordinated DE&I improvement across the profession.
That said, one need only look at the face of the U.S. accounting profession’s leadership to conclude that inadequate progress has been made in attracting, retaining, and promoting diverse talent. For every 10 of the profession’s most senior leaders, nine are white, eight are male, and few openly identify as LGBTQIA (lesbian, gay, bisexual, transgender, queer, intersex, and asexual). Furthermore, men comprise 86% of the CFOs of Fortune 500 and S&P 500 companies and 77% of partners in accounting or finance functions at U.S. CPA firms. More than 90% of the profession’s executive leadership are non-Hispanic white.
What was most discomforting, in each demographic group, respondents reported that DE&I issues had directly contributed to decisions to leave a job and move on to another opportunity while working in the U.S. accounting profession. The study also found that 43% to 55% of female, nonwhite, Hispanic, Latino, and LGBTQIA respondents have left a company due to a perceived lack of equitable treatment. At least 30% of the respondents from each of these groups have left companies because of a lack of inclusion. More than half of the respondents from each group that is underrepresented at senior levels report having personally experienced inequitable or exclusive treatment that they perceived to be rooted in bias against people like them.
The following are some cited examples:
- Discovering that persons with comparable or lower-level jobs, education, or experience, but different demographic backgrounds, were receiving better compensation.
- Failing to get promoted to a position for which they felt qualified.
- Feeling unsafe to contribute ideas that are different from others.
- Being yelled at or demeaned by a colleague, supervisor, or leader.
- Hearing derogatory comments or jokes about people like them.
- Almost one in five LGBTQIA respondents and nearly one in 10 female and racially or ethnically diverse respondents report that inequitable and exclusive experiences contributed to them leaving the profession.
Paused, let these examples soak-in for a minute. SMH. Okay, let’s continue.
Because Moral Accountability Principles for Moral Accounting Engagements are presented as a conceptual framework that leaves controversial moral standards in the hands of those with the philosophical, civic, or theological expertise to earn moral authority, and requires accountants to structure those standards to make Moral Accounting Engagements (MAEs) a feasible endeavor. MAEs, therefore, will depend on societal perspectives about the impact of historical discrimination along the lines of race/ethnicity, sexual orientation, gender, religion, and socio-economic status within social and business constructs being fully understood and accepted; so that accounting professionals can act as stewards on behalf of society, just as traditional accounting would do. That said, how is it possible to implement MAEs as an orienting conceptual framework within a profession that by its own admission states, “The U.S. accounting profession has a significant diversity gap among its senior leadership that, unless addressed, will inhibit its long-term sustainability, innovation, and fulfillment of fundamental ethical principles to act in the public interest.”
Solution and Discussion Point:
A solution would be to have a class discussion on how can Moral Accountability Principles for Moral Accounting Engagements be applied in one of the least diverse professions in the world. As a discussion point, I believe this topic would help the class better understand how diverse talent is, and could more fully contribute accountability, agility, innovation, and responsiveness in a profession built on non-diverse, centuries-old ethics and values.