Features | From Pivot Magazine

How the Big Four fare on diversity and inclusion

Firms are responding to, and reflecting, Canada’s changing demographics

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Illustration of finger using calculator displaying three male gender symbolsClients seek out accounting advisers that reflect their own internal diversity, says Aida Sijamic Wahid, an associate professor of accounting at the Rotman School of Management at the University of Toronto (Illustration by Stefania Infante)

Three years after KPMG Canada established an executive diversity council in 2014, the company realized a noticeable change was under way in the partnership ranks.

In 2019, 45 per cent of new partner promotions were women, marking the fifth straight year that number has been more than 40 per cent. Today, the overall ratio of women within the Canadian partnership is just less than 30 per cent—a big jump from 21 per cent in 2014. Over the same period, the firm further strengthened its commitment to inclusion and diversity by establishing the role of chief mental health officer—a first in corporate Canada. Recent internal surveys found nine in 10 employees feel they can “bring their whole selves” to work.   

“At KPMG, we’re focusing our efforts on driving both inclusion and diversity,” says Mary Lou Maher, FCPA, FCA, the firm’s global head of inclusion and diversity. “We believe enabling people to bring their whole selves to work is key to delivering on our individual and collective potential.”

KPMG and the other large accounting firms have been developing their so-called “I&D”—inclusion and diversity—mandates for many years, often initially by funding affinity groups but now through expanded benefits packages, training and recruiting practices. There’s mounting evidence that these initiatives have not only begun to yield significant dividends, but have also become increasingly critical for large firms as well as their clients, many of whom now face pressure from securities regulators and large investors to increase their diversity.

Since 2014, the Ontario Securities Commission has required gender diversity disclosure for publicly traded companies, with annual tracking of results. Those rules have created something of a domino effect, observes Aida Sijamic Wahid, an associate professor of accounting at the Rotman School of Management at the University of Toronto. Clients, she says, seek out accounting advisers that reflect their own internal diversity. “They want that team to look like what they look like.”

Among junior accountants and new recruits, it’s easier for the large firms to achieve gender, racial and sexual diversity. The senior levels, however, are a work in progress. “There’s a lot of catching up to do there,” says Wahid. “Until the partners become more diverse, it’s hard to send the message to new recruits that they’ll get to become partners.”

Forty-five per cent of EY’s recent partner promotions were women, and 43 per cent were visible minorities

Yet I&D executives with each of the Big Four firms in the past few years have clearly stepped up their efforts to make sure that up-and-coming accountants are not just mentored, but coached and actively sponsored so they break into the partnership ranks.

Sadaf Parvaiz, director in the EY Americas Inclusiveness Office, says the firm has made sure that when partners are asked to write a review for a younger accountant, they’re focused on performance. “Am I writing this review out of personal preference or tradition, or is it truly a requirement for the role?” she says, noting that such evaluation has become a leading part of management practice. 

Indeed, EY has adopted policies for formally evaluating partners on their sponsorship activity among historically under-represented groups. “It’s an expectation,” says Parvaiz, noting that 45 per cent of EY’s recent partner promotions were women, and 43 per cent were visible minorities. The firm also stresses that sponsorship is a two-way street, offering partners evidence that their careers benefit when they actively advocate on behalf of talented proteges.

Other firms have targeted their I&D efforts on emerging fields, particularly those related to technology. “Artificial intelligence has helped to make our job postings at PwC more gender neutral,” says chief inclusion officer Mona Ghiami, CPA. “We know based on research that many women opt out of applying for jobs where certain language—like sales ‘ninja’—is used that is not as inclusive. So we use AI to help remove the bias that exists in our posting language.”

Van Zorbas, chief culture and people officer with Deloitte, adds that this year his firm piloted several recruitment initiatives with the goal of eliminating unconscious bias from the process.

Also this year, for the first time, Deloitte’s recruiters identified post-secondary institutions with high Indigenous student cohorts in order to boost their recruitment among those communities. That effort, he adds, has an element of corporate self-interest. “We’re also looking for great people where other firms may not have looked.” 

KPMG has set a reachable goal of 30 per cent women and 20 per cent visible minorities at the partner level by 2022

Even as firms accelerate and expand their I&D programs, the ultimate goal remains a bit elusive, and varies greatly from firm to firm. Zorbas says Deloitte has set a target of 2023 to have the leadership team fully reflect Canada’s demographics.

At PwC, Ghiami says the firm has “an aspirational goal” of gender parity for partner admissions. The proportion at the moment is 41 per cent women, which she credits to the success of the company’s Women in Leadership program.

KPMG’s Maher says the firm has set a reachable goal of 30 per cent women and 20 per cent visible minorities at the partner level by 2022. “We believe in being very transparent around our journey,” she adds. “In the last three years, the overall proportion of both our female and visible minority partners has jumped five per cent. And, as of October, the firm’s executive team is 57 per cent women.”

But EY’s Parvaiz says that increasing diversity in its leadership ranks often depends on market availability and specialized skill sets. EY’s focus is to diversify the talent coming into the firm and ensure that promotion within individual business units reflects the make-up of the people coming up the ladder.

In fact, Wahid points out that the pace of partner retirement—and therefore turnover at the senior-most ranks—remains an important determinant of all I&D programs, no matter how ambitious. Even if we assume 70 per cent of new partners are women, it will still take over a decade to get to parity for firms with a two per cent attrition. “At some point,” she adds, “it will snowball.”

When it does, the benefits may accrue not only to those women and visible minorities who find themselves admitted into rooms that were once out of reach, but also to the companies themselves. As Wahid says, “There seems to be good evidence that gender diversity improves performance.”