Female accountants and quotas – JosAnn Cutajar
On April 1 of 2018 the president of the Malta Institute of Accountants lamented the fact that although the number of female accountants is increasing (Figure 1), women are still under-represented in the highest positions within companies. In this short article, I will look at what is needed to increase women’s representation at decision-making level within the accountancy profession.
Figure 1 - Percentage of male and female accountants working in Maltese auditing firms, 2015
Source: Camilleri 2015: 39.
More women are needed at decision-making level within companies for a number of reasons. More women are starting their own businesses, and the skills and competencies they bring to the company are not always taken into consideration. Women feel more comfortable working with women, like men prefer to work with men, a phenomenon termed homophily. It therefore makes good business sense to increase women’s representation at this level. Besides, women at this level also act as positive role models encourage more women to pursue this profession.
Quotas or targets are usually mentioned by people at a national or company levels to address the dearth of women in the decision-making environment. Quotas, however, are not effective on their own. Many times, quotas are introduced to counter homophily, when women with the same experience and qualifications as men are overlooked in the nomination of partners. As Gallacher (2016) notes, men get promoted for their potential, whereas women tend to get promoted for their experience. So, it takes women longer to be promoted.
Del Baldo, Tiron-Tudor and Farragalla (2018) maintain that female accountants’ advancement is hampered by gender discrimination and work inequality. Cultural, rather than legal causes, are therefore to blame. Malta has reinstated a number of legislative decisions to combat gender inequality, namely: The Equality for Men and Women Act; the Employment and Industrial Relations Act 2002, together with a list of subsidiary legislation in the form of regulations to combat gender discrimination (Bartolo 2018). But these are not enough. Prejudice and stereotypes in the accounting profession impact both the formal mechanisms of organisational structures, and the informal processes when decisions are made about who gets recruited, given training and/or is allowed to progress professionally. It often means that the female accountants’ trajectory to the top is slower than men’s, which might push some women to leave this profession altogether, or become disgruntled in the job, which does not help the company.
Quotas or voluntary targets have already been used in the financial sector in the UK and Italy. Gallacher (2016) notes that in the UK they were successfully introduced in the banking sector and FTSE companies. She shows how the 30% Club set out to achieve 25% female representation by 2015 on FTSE 100 boards. From 12.5%, the rate rose to 25% proportion of females on non-executive boards in FTSE companies. As Gallacher notes, if bankers and FTSE companies were able to bring this change, so should accountancy.
Del Baldo et al. (2018) underline that quotas were introduced in Italy through the Golfo-Mosca Law (Law No 120 introduced on August 12, 2011) which established a mandatory gender quota of 33.3% on the boards of directors within companies listed in the Stock Exchange and public subsidiaries. The National Council of Accountants and Accounting Experts established a number of working committees to gather gender disaggragated statistics to see whether these measures are being implemented at company level. This council compiled a database which includes the resumes of women interested in being appointed to boards. When companies do not comply with this measure, the council issues a warning, which may then be followed by financial sanctions. Companies that make no attempt to promote female accountants may even have their boards dissolved. By 2018, Italy managed to raise the number of female accountants on company boards to 31% (Del Baldo et al. 2018).
In February 2016 (Del Baldo et al. 2018) the Italian National Council of Accountants and Accounting Experts provided guidelines on how to compile gender disaggregated statistics, set gender equality targets, and attain them. Indeed, companies need training on how to go about gender mainstreaming. Achieving a gender balance in decision-making will help increase female role models and will enable more women to aspire to a leadership role. Del Baldo et al. (2018) add that women who are mentored are more likely to progress professionally. Mentoring enables mentees to enhance their self-confidence since they know the steps, they have to take to reach the top. Mentoring and the directories of women keen to make it to the top, helps build a pipeline.
The introduction of quotas or voluntary targets is not enough, however. The whole institutional set up needs to change. Del Baldo et al. (2018) discover that, while most EU countries have the necessary legislation to combat gender discrimination in place; political will to combat traditional organizational structures is still lacking (Camilleri 2015). The working environment needs to be redesigned to attract, retain and help more female accountants make it to the top. Companies and the state need to come up with measures to enable accountants reconcile family and work life. Workers – both male and female – need to share caring responsibilities, have the possibility of working from home, avail themselves of flexible working hours, and have other measures that enable them to attain a well-balanced work and family life. All this can only happen if there is the political will to challenge gender stereotypes and social expectations.
Female accountants also need events where they can network, which facilitates recruitment and promotion. Gender quotas alone address one facet of gender inequality in the workplace.
Dr JosAnn Cutajar is a senior lecturer within the Gender Studies Department, Faculty for Social Wellbeing at the University of Malta. She is also the coordinator of the Consultative Council for Women's Rights within the Ministry for European Affairs and Equality.
Bartolo, R. (2019). Country report. Gender Equality. Malta 2018. Brussels: EC, DG for Justice and Consumers.
Camilleri, B. (2015). Career Advancement for Accountants in Maltese Firms – An analysis. Unpublished MA in Accountancy dissertation, FEMA, University of Malta.
Del Baldo, M., Tiron-Tudor, A., & Farragalla, W.A. (2018). Women’s Role in the Accounting Profession: A Comparative Study between Italy and Romania. Administrative Sciences, 9(2). ; Doi: 10.3390/admsci9010002.
Gallacher, G. (2016). Gender quotas for accountants. ICAEW https://www.icaew.com/archive/groups-and-networks/local-groups-and-societies/london-ds/london-accountant/opinion/may16-gallacher
Times of Malta. (2018, April 1. Malta Institute of Accountants launches gender disparity study. Times of Malta. https://www.timesofmalta.com/articles/view/20180401/business-news/Malta-Institute-of-Accountants-launches-gender-disparity-study.675054