Dive Brief:
- The trend of CFOs assuming a more forward-looking, strategic role in the corporate suite got a push Thursday from the International Federation of Accountants (IFAC), which shared a set of principles and other materials in support of the idea that finance professionals can no longer be concerned only with reporting.
- "It's a really complicated world out there now and changing very quickly," Stathis Gould, IFAC's deputy director, told CFO Dive. "Most value for companies in the knowledge economy is reflected in intangibles and not on the financial statements. It's really important for CFOs and their finance teams to be able to articulate to stakeholders what their long-term strategy is and how they're going to deliver that."
- The initiative by the group, which sets accounting best practices for its members in more than 130 countries, is intended to provide a training foundation for the finance field in the years ahead.
Dive Insight:
The best practices laid out by IFAC encourage finance professionals to stop seeing themselves as numbers people who track income and expenses and prepare financial reports. Instead, they should start seeing themselves as a part of their organization's forward-looking decision-making team.
"The finance function cannot survive in the future as a support or back-office function," IFAC said in "A Vision for the CFO and Finance Function," released Thursday. "The CFO and finance function need to help navigate, measure and communicate what matters to long-term success and brand reputation at the same time as dealing with the expectation of investors and boards for short-term performance."
The group also released a tool to help CFOs measure how they operate against goals IFAC believes they should be striving for.
The tool helps CFOs answer questions about where they are now compared to where they ought to be as a strategic professional. For example, How much are your financials structured to be actionable by providing insights, as opposed to just reporting? To what extent are you tracking broader value-creating activities? To what degree are you stepping in with objective advice on business decisions rather than leaving that to the CEO and other executives?
The group also released a brochure that divides future-looking finance executive roles into seven roles: co-pilot, navigator, brand protector, storyteller, digital and technology enabler, process and control expert, and trusted professional.
"Most CFOs in large organizations are already working in these strategic partnership roles with the CEO and the board," Gould said. "The challenge is really around their finance and accounting teams being effective."
The principles and supporting materials are meant to arm CFOs with the rationale for investing in more high-level training for their staff, and ensure that the CEO and board understand the need for this type of professional development.
"It's really to enable the CFO to institute significant changes in their finance teams and get the buy-in of their colleagues, particularly the CEO," Gould said. "And that's always challenging [...] because it often gets forgotten."
This week's release is the start of a campaign the group hopes will lead to long-term change.
"This isn't something we just want to spend a couple of weeks on," Gould said. "It's going to require us to have a conversation over the next few years with our membership and also [change] our finance and accounting education."
