Tax Departments: Progressive or Not?

Women are relatively well represented in tax, but their progress has stalled of late, according to a recent study.
Alix StuartFebruary 25, 2010

For years, CFO has documented the slow rise of women to the top of the corporate finance department. At last count, just 9% of Fortune 500 finance chiefs were women, a number that has held steady for several years, while fewer than 20% of either controllers or treasurers at those companies were women.

By those standards, women are holding their own in the tax department. But progress has stalled in the past few years, according to a recent study by TaxDiversity, a nonprofit arm of recruiting firm TaxSearch Inc.

Based on its proprietary database of more than 72,000 tax professionals, TaxDiversity found that women now hold 35% of all private-sector tax roles, up from 32% in 2002. While women are proportionately better represented in corporate tax departments than at professional services firms, such as accounting and law firms, the rate of change in both areas and at all levels was still small.

Drive Business Strategy and Growth

Drive Business Strategy and Growth

Learn how NetSuite Financial Management allows you to quickly and easily model what-if scenarios and generate reports.

“This shows that with their current policies, the private sector is at a limit as to how many females they’re going to pull into the profession,” says Anthony Santiago, founder and leader of TaxSearch.

The percentage of women in top tax roles at corporations inched up from 17% to 18% between 2002 and 2009. The gains were greater, though the numbers smaller, at professional services firms, where female tax partners increased from 13% to 17% of the ranks.

Women in midlevel tax management roles made the greatest gains, particularly in corporate jobs. Midlevel in-house tax managers are now 39% female, up from 31% in 2002. At professional services firms, the ranks of women with midlevel titles grew from 34% to 37% of the total pool.

Santiago says the recession has made working conditions worse for women, who often rely heavily on flexible and reduced work schedules in order to balance work with the demands of raising children. “The pressure on flex schedules is unbearable,” he says. “You can’t be working four days a week when the company is laying off people all around you and all the others who are left are working 60 to 70 hours a week.” He’s noticed many women leaving their full-time tax jobs for this reason, with some opting for contract-based consulting work or starting their own firm instead.

Still, in absolute terms, the number of women in high-profile tax roles is rising. At least one of the Big 4 accounting firms, Ernst & Young, has a female heading up tax in the United States (and the rest of the Americas). Kate Barton, who was named to the position at E&Y in July 2008 after rising through the ranks for 23 years, says she is seeing more women in tax at the firm and that her corporate counterparts, including Kathleen Fanning, vice president, worldwide taxes at Xerox and Victoria McInnis, chief tax officer at General Motors, are increasingly female as well. The Tax Council, an advocacy group composed in part of top tax executives from large companies, also lists several women among its board members, including Sarah McGill at PepsiCo, Linda Evans at IBM, and Anne Buettner at the Walt Disney Company.

Barton says that E&Y’s campus hires in tax are now 53% female, and that the firm has several programs in place to help keep them on track for promotions, including a “career watch” for high achievers and a program aimed at encouraging minority and female high school students to consider tax careers. Currently, 19% of the firm’s tax partners are women, she says, and she is looking for that to increase up to around 33% in the next 10 years.  “It’s nice to see women in the middle, but I’m obviously very concerned about getting women to the top as well,” she says.

Santiago, though, remains concerned about the prospects for promotion, particularly given the numbers of women he sees taking a hiatus from the corporate ladder right now. It’s not easy to rehire someone who has sat out for even a few years, he notes, because tax laws are constantly changing and are likely to change even more dramatically in coming years.

“If you’re not in the game now, what you know might be totally useless in the next year or two,” says Santiago, considering the sweeping tax-code changes that President Obama is proposing. He suggests that in order to broaden their pools of candidates, corporate law departments develop retraining programs for women and others who may be returning to the workforce after a break. “Eventually, the corporate sector is going to need to make this a more viable career for women,” he says.

Interestingly, the gender mix in public-sector tax work — namely, the Internal Revenue Service — is nearly equal. Women constituted 76% of tax examiners and 56% of the higher-ranking revenue officers in 2007, the last year for which data was available. Why? “The IRS has no travel to speak of, it’s localized, and the hours are a consistent 40-hour workweek,” says Santiago, all features that make it easier for women who are caring for children.