The reckoning with institutional bias and systemic racism has moved many organizations to take a closer look at the foundations of diversity and inclusion in the business world. It’s an opportunity for business leadership to communicate the organization’s ethical standards and examine hiring procedures, performance reviews, and talent development and advancement practices to root out any bias, embody an ethical mind-set, and put values into practice when it comes to professional ethics.
PEOPLE OF COLOR AND POWER
In my 34 years of conducting audits for small businesses and multibillion-dollar conglomerates, I only saw a handful of Black colleagues sitting across the table from me as VPs of finance, partners, or comptrollers. People of color are underrepresented in positions of power where decisions are made that impact their organization and our economic systems.
Around a decade ago, only seven companies in the Fortune 500 had a Black CEO, and, as of June 2020, that number was down to just five—M&T Bank, Merck & Co., TIAA, Tapestry, and Lowe’s. Only 8% of people employed in white-collar professions are Black, and the proportion falls sharply at higher levels of the corporate hierarchy, in particular when comparing middle management to the executive level, according to the Center for Talent Innovation’s Being Black in Corporate America report. If they aren’t in the conference rooms, then people of color can’t influence the organization’s decisions to select people with diverse backgrounds who could offer added benefits to the company if afforded the chance to demonstrate their skills.
Companies with above-average diversity on their management teams report innovation revenue that’s 19 percentage points higher than that of companies with below-average leadership diversity, according to a Boston Consulting Group study.
By ensuring a diverse leadership team, organizations may also insulate themselves from detrimental office politics. For example, there may be a broader conversation around evaluations and performance metrics, diminishing the possibility of cronyism, quid pro quos, or kickbacks. Establishing ethical, inclusive company policies can have a long-term impact that benefits both your business and communities.
To promote diversity and encourage more people of color to pursue a finance and accounting career, companies can take the following steps:
- Encourage academic partners to establish a business curriculum that includes financial literacy units and finance and accounting mentorship initiatives;
- Offer summer jobs and internships to a diverse mix of high school and university students;
- Actively recruit and hire minorities by considering relevant work experience in addition to standard credentials;
- Offer advancement opportunities tied to benchmarks for acquiring skills and credentials on the job; and
- Mentor people in all stages of their career, giving them guidance and making sure that they’re getting up to speed and on track to reach their full potential.
As an African American woman leading a team of auditors that regularly interfaced with large corporations, I also found it productive to stay conscientious about my day-to-day interactions. I learned to motivate people from different backgrounds and cultures because I wanted the team to be successful. I found common ground while I made room for our differences. Leaders have an ethical obligation to mindfully develop all the people who make up the team, to create opportunities for them, and to promote them based on their performance and merits. If I do this for someone who isn’t of the same race or ethnicity that I am, then I hope it will inspire that person to do the same for someone else of a different color or nationality.
Ethical leaders allow everyone’s opinions to be heard and valued. On more than one occasion, I shared an idea that wasn’t acknowledged in the boardroom. Then someone else who wasn’t a Black woman basically said the same thing, and the boss said, “That’s a great idea. Let’s try that.” Leaders set a good example by watching for this type of microaggression and rooting it out.
To every leader reading: It’s important to take an objective look into your own business practices and ask in good faith whether you’re allowing unconscious biases to influence your decision making. Organizations benefit from having an ethical system in place that monitors fairness and best practices, but self-awareness means making an individual effort to treat everyone, including people of color, justly in the workplace. This is a crucial aspect of ethics.
Those serving on boards have a particularly powerful vantage point from which to ensure that the company focuses on instilling and enforcing ethical standards and fairness in how performance metrics are used. Everybody must be represented and treated fairly. If they aren’t, begin the fierce conversations with “Why not?” and remind leaders of their ethical decision-making responsibility.
The expectation of equality under the law can be applied up the management chain and across positions of authority as well.
When I worked for the federal government, for example, my job was to enforce tax compliance. If I entered fraudulent information or made material mistakes on my tax return, then I could have lost my job because I’m supposed to be representing honesty, accuracy, integrity, and competency. If my tax return isn’t accurate, what kind of example am I setting when I’m trying to enforce those laws? The same ethical standard should also regulate people in any position of power. Management must uphold the ethical standards that organizations seek to represent.
IMA ETHICS HELPLINE
For clarification of how the IMA Statement of Ethical Professional Practice applies to your ethical dilemma, contact the IMA Ethics Helpline.
In the U.S. or Canada, dial (800) 245-1383. In other countries, dial the AT&T USA Direct Access Number from www.usa.att.com/traveler/index.jsp, then the above number.
The IMA Helpline is designed to provide clarification of provisions in the IMA Statement of Ethical Professional Practice, which contains suggestions on how to resolve ethical conflicts. The helpline cannot be considered a hotline to report specific suspected ethical violations.