Margaret Lightbody


Executive Positions at CPA Firms

Are director positions a new glass ceiling?

October 20, 2011
by Margaret Lightbody, CPA, PhD and Louise Single, CPA, PhD

Historically public accounting careers have been “up or out” with progression from staff though senior, manager, senior manager and ultimately, partner. Recent AICPA data suggests senior managers are increasingly promoted to non-equity “director/principal” positions rather than to partner (AICPA. 2006. AICPA Work/Life and Women’s Initiatives 2004 Research. A decade of changes in the accounting profession: workforce trends and human capital practices. New York, NY: AICPA.). The 2010 AICPA WIEC Benchmarking Survey of Firms (PDF) indicates a majority of responding firms had non-equity positions between the levels of senior manager and equity partner with titles such as director or principal. Over time, AICPA studies are showing that women constitute a much higher proportion of promotions to these positions than to equity partnership. While these “director” or “principal” positions are occasionally mentioned in firm and professional accounting publications, they are rarely described and are often grouped together with partnership numbers in statistics.

Two recently published surveys examine the status of these positions in the career ladder in public accounting (Successful Promotion or Segregation From the Partnership? An Examination of the ‘Post-Senior Manager’ Position in Public Accounting and the Implications for Women’s Careers (with E. Almer and M. Lightbody) Accounting Forum, July 22, 2011 and New Leadership Tracks in Accounting Firms: An Alternative to the Partnership (PDF) (with E. Almer, M. Lightbody and B. Vigilante) Current Issues in Auditing 5 (1) 2011). One study surveyed HR directors from the Top 100 U.S. public accounting firms. The second study surveyed partners and directors from among the membership of the American Woman's Society of Certified Public Accountants (AWSCPA) to gain the perspective of women accountants themselves.


Both surveys indicated that the “director” positions were diverse and being used to support many different functions within CPA firms. The respondents indicated that while the positions in some cases are an extra step on the way to the partnership, in other cases they are an opportunity for highly valued professionals to stay in the firm without ever becoming an equity partner. Titles used by firms vary, although the majority of responses indicated that the most commonly used title was “director.” Firms are even beginning to add additional levels of “director” such as “managing director.”

What do these “director” positions look like in terms of responsibility? The responses of both the HR directors and the professionals themselves in the two surveys reveal that there is some variation from firm to firm, and the responsibilities of directors at some firms are closer to the partner level, while at other firms they are closer to senior managers. According to the surveys, in general, partners do the primary business development, while directors do more of the engagement management and staff development work. However, in about a third of cases, respondents indicated that both partners and directors were doing about the same amount of new business development. In many cases it seems that the directors are acting as “junior partners.” According to one partner respondent: “[Our directors] will have smaller engagements, more authority to really almost act as a partner and then [they’ll] carry a significant amount of responsibility for that engagement.”

Increasing Numbers of Firms With Director Levels

While it is clear that business development has always been a critical equity partner function, the recent economic downturn may be putting increased pressure on professionals to build a more substantial book of business in order to make their case for partnership. For example, a partner respondent argued:

“And now [as we are no longer in a boom economy] every firm is so concerned about growth that unless someone can deliver directly to the bottom line into new engagements and growth in those engagements, they are not going to make partner in most firms … ”

How Are Promotions to the Two Positions Determined?

HR respondents and the professionals themselves were clear that it was more often the case that the firm counseled individuals into the positions rather than the individuals initiating the choice. Business development skills were the primary factor that determined whether an individual was counseled into or self-selected into partnership roles vs. director positions. In addition, other important factors that came up in the survey responses were unwillingness to relocate, size of market (more difficult to make the business case for partner in a smaller market) and the effect of the current economic climate.

Firm Costs and Benefits

Individuals and HR directors agreed that the director positions improved retention of experienced professionals, improved client service, improved day-to-day firm management and improved profitability. On the other hand the professionals indicated to a much greater extent that the positions are creating gender inequity and increasing the diversion of partner potential professionals to non-equity positions.
There was a sense that requiring directors to perform equity-partner levels of work was not going to lead to long-term retention. According to one professional, “[T]his holding spot [director position] is not a place they will be able to keep people long term. There are significant differences in pay and benefits [between them and that of] equity partners in the same position.”

However other professionals felt, “some people may not want to become a partner with the equity and other responsibilities and the director position gives them more status than a senior manager.”

Implications for Women’s Careers

Given that research by the AICPA (AICPA, 2005. Women’s Summit Conference, “Staffing Survey Group B Firms,” Chicago, IL, October 11, 2005.) has indicated that women are disproportionately represented in the director ranks, why would that be the case? Are women more likely to lack sufficient business development skills for partnership? Perhaps they prefer to focus on client-service functions or find it more difficult to build a large client base due to the gendered nature of many professional networks. Another possibility is that a greater proportion of women are on flexible schedules and their firms are not willing to admit reduced hours professionals to the equity partnership. The relocation issue may be a factor as well. If women are less mobile due to their spouse’s jobs or family commitments they may have a more difficult time gaining the visibility to be promoted to equity partner. On the other hand, the “director” option may meet the needs of the professional who is trying to juggle career and family demands. However, the two surveys by Almer et al. indicate that directors work very demanding schedules and shoulder high levels of responsibility. So other than in the case in which the director role is the highest level available for a professional on a reduced hours schedule, the director position does not appear to offer particular advantages in terms of achieving balance vs. the equity partner position.

It is important that professionals accept the director promotion with a clear understanding of the implications for their long-term career goals. Consistent with previous studies (e.g. AICPA, 2005), the majority in the professionals’ survey aspired to partnership rather than to a director position, and perceived that the firm made significant majority of decisions regarding career tracks rather than the individual. While a minority of respondents indicated that director positions are beneficial for staff retention, a greater number of respondents indicated that these positions were unlikely to be an acceptable long term “holding spot” for many accountants and thus may not function as an effective retention practice. Overall, such findings reveal that many of those holding director positions may not in fact have chosen this career track, but rather have been “pushed off” the partnership track. Given the evidence from the surveys, combined with the observation that the equivalent positions in law firms are often described as “second class” or “mommy track” jobs, the majority of woman accounting professionals are not likely to see such positions as an optimal career move, but rather merely as “satisfying.”


Women who accept the director promotion, in particular those who are on flexible work schedules and/or who have family responsibilities, should be very clear about their ultimate career objectives. If they aspire to equity partner, they must be sure that they are getting that message to senior management who may mistakenly believe that the individual is content to remain a director because it suits her needs better. It is particularly important that ambitious women proactively seek to build business development opportunities throughout their careers, as this is the core factor facilitating promotion to equity partner.

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Margaret Lightbody, CPA, PhD, is an associate professor at the University of South Australia. Her research examines women’s careers in both academic and public accounting. Louise Single, CPA, PhD, is an associate professor and accounting programs director at Austin, Texas-based St. Edward's University. She has published extensively in the area of women's advancement in public accounting and is the Research Task Force chair for the AICPA Women's Initiatives Executive Committee.