On July 1, KPMG’s Lynne Doughtie will become the first woman to hold both the CEO and chairwoman positions at a Big 4 firm. Doughtie will join Cathy Engelbert, Deloitte’s CEO, in the Big 4 C-Suite. And so, come July, half of the Big 4 will be run by women.
To be sure, this is a sign of great progress with respect to gender equality in the workplace. Unfortunately, it is also a reminder of just how few women still hold senior roles in U.S. firms. Today, while women hold nearly 50 percent of all jobs in the country, they hold less than 5 percent of all CEO positions. And as it turns out, this is not only disheartening but also perhaps bad business.
According to a recent study of 16,000 male and female leaders, “women rated better than men on 12 out of 16 competencies.”
These included “takes initiative,” “drives for results” and “stretches for results,” all traditional measures of effective leadership. They also included every one of the more human competencies—“practices self-development,” “develops others,” “motivates and inspires others,” “builds relationships” and “collaboration and teamwork.” These leadership qualities are more critical than ever in a highly networked, fast-moving, interdependent global economy. Traditionally, they have been valued far below more technical skills.
Another study, which looked at more than 350 of the Fortune 500 firms over a period of several years, found that female-run companies were more profitable than male-run ones.
The group of companies with the highest representation of women on their top management teams experienced better financial performance than the group of companies with the lowest women’s representation. This finding holds for both financial measures analyzed: Return on Equity (ROE), which is 35.1 percent higher, and Total Return to Shareholders (TRS), which is 34.0 percent higher.
In yet another study, this one done by KPMG in the lead-up to Doughtie taking over the board chair and CEO posts, it was found that while two-thirds of college-aged and professional women express a desire to hold senior roles, less than half truly see themselves as leaders. That is, “while men often overvalue their strengths, women too frequently undervalue theirs.”
Which some refer to as a “confidence gap.” And common thought is that the key to overcoming this gap and thus to more women in senior roles is through mentors—mainly female mentors (this is why nearly every large firm has some sort of so-called women’s initiative). But since women are in a chicken-or-egg spot when it comes to getting senior roles, they also need male mentors.
And Doughtie, for one, would not be where she is today without male mentors.
One was John Veihmeyer, KPMG’s global chairman, who grew up with five sisters, each of whom excelled academically and professionally. Mr. Veihmeyer pushed to name Ms. Doughtie the managing partner of KPMG’s United States advisory business 10 years ago, when others felt she was too young for such responsibility.
Deloitte’s Engelbert also has male mentors to thank for her rise. She’s been quoted as saying, "A key to my success was that I found male mentors and male sponsors."
Of course, finding good mentors is only part of the problem (and solution). Likely the main reason more women aren’t in more senior roles has to do with the sacrifices they’d need to make to advance their careers. That is, the sacrifices to their family lives they’d have to make to advance.
Since extraordinarily long hours are still thought to be the main avenue to get very far ahead, and hours worked at companies are getting longer and longer, not to mention the fact that it’s okay for men to leave work early but not okay for women, no amount of maternity leave or other so-called family-friendly policies are proving to be effective; women, at some point, are simply opting out of the C-suite track in order to spend more time raising children.
Consider that, in Vault’s latest Accounting Survey, which asked more than 8,300 accountants about life at their firms, although KPMG and Deloitte (which hire a large proportion of all accountants in the accounting industry) ranked among the top 10 firms in female diversity, neither firm ranked among the top 20 in hours and work/life balance. Deloitte also didn’t rank among the top 20 in overall job satisfaction, while KPMG just barely cracked the top 20—at #20. In other words, although these two firms are hiring women in significant numbers, they are working their women (and men) very hard, and so their employees are not all that satisfied in comparison with smaller, peer firms. Which doesn’t bode well for retention rates and advancement.
In any case, let’s hope that more male mentors and more corporate boards (which are predominantly made up of men named Bob, Bill, and Jimmy; only about 15 percent of board seats in the U.S. are held by women) understand that senior women are just as, if not more capable than their male counterparts. Let’s also hope that the new faces of two of the Big 4 firms (who will together oversee tens of thousands of employees in the U.S.) will use their motivation, drive, teamwork skills, ability to inspire, and other qualities to widen the avenues for women to rise to the top.
The truth is, at the moment, there are still very few women being groomed for top roles, and so cultural changes, which start at the bottom, are going to be essential to effect big changes at the top.
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For those who are invested in such things, be they prospective students assessing which school to attend or alumni wondering how the prestige of their alma mater is faring, the new US News law rankings released on March 28. There was one extremely significant event in the ranking shifts this year, as some predicted given the changes in US News' methodology over last year.
You’ve just received word that your job is going to switch to the fully remote paradigm. That means no more travel expenses or traffic, no more rushing frenetically from place to place, and no more of the crushing outfit dilemma you’ve faced with each new day.
On Friday, May 20, 2022, Vault Law will host an OCI Readiness Summit for law students looking to prepare for and find summer and other associate positions through OCI. You can register for this free informational summit here, and learn more about it below.