A new world for the finance function in 2012: The CFO and the finance function in 2012 are operating in a new world. Companies around the world face almost unprecedented uncertainty and the business environment is more complex and changing quicker than ever before. There is much more information that businesses need to cut through, and more regulation on company activities.
The competitive environment is ever more challenging. It is in this context that the finance function in 2012 seeks to support the business and it can only do this if it has the right capabilities in place. Diversity in the finance function matters because greater diversity in the finance function brings greater capability to the finance function.
A changing role for CFOs requires more diverse finance leadership skills. The CFO role continues to evolve. It is more challenging and more diverse than ever before. The range of internal and external stakeholders that CFOs must work with and build effective relationships has never been greater. Today's CFO needs to balance their traditional custodial and operational responsibilities with their need to support the business as a strategic voice and partner. Today's CFO needs to bring a greater diversity of skills to the table to be effective.
New responsibilities for the finance function mean greater diversity of capabilities and experiences. The role of the finance function today extends well beyond its traditional finance capabilities. In some sense finance roles are becoming more technically specialised, particularly as a reflection of growing regulation. Conversely, some finance roles reflect the business need to bring in the finance function as a strategic partner to the business, whilst finance transformation programme are driving a need for finance to develop over-arching responsibilities that govern and bring together new finance function models to best support the organisation. Across this spectrum of new roles and responsibilities, there is not only a greater need for a diversity of skills, experiences and capabilities but also a greater need for innovation and new ideas, for the finance function to be able to question why things are done in a certain way.
Diversity is essential in a global finance function. As companies expand into new geographical markets, the finance role inevitably becomes more complex. Finance teams must get to grips with different accounting, regulatory and legal environments, and juggle fast-changing tax and treasury requirements across multiple countries. Expansion into emerging markets adds further complexity because of the nature of the risks faced. The challenge however goes even beyond managing these technical developments. In the global finance function, CFOs and their finance function must embrace the diversity that comes from operating across geographies and cultures and leverage this for positive outcomes.
HOW CAN BUSINESS DEVELOP MORE DIVERSE FINANCE FUNCTIONS?
Diversity in the finance function starts with great recruitment Finance leaders must do all they can to foster diversity across the organisation. By bringing in individuals from different backgrounds, sectors, experiences and careers finance functions will be better placed to fulfil their expanding, increasingly complex roles and responsibilities. To this end recruitment channels are evolving and embracing new technologies; on-boarding processes need to become more effective and engaging.
Business need to encourage diversity of experience across the finance function and into other functions.
Businesses need to ensure finance professionals gain the appropriate level of experience across the finance function and beyond the finance function to develop the necessary level of capability needed. This goes beyond developing the necessary technical 'know-how'. Providing this breadth of experience enables finance to develop the broader business based skills required.
Businesses need to drive transparency in career paths across finance and beyond
A new evolving finance function means that finance career paths are less linear - the corporate lattice rather than the corporate ladder. It is difficult for finance professionals to develop the breath and depth of experience required without greater transparency of the roles available and the progression routes. Greater diversity in the career paths for finance professionals in the future is certain - businesses need to play their part in transparency around career development and put in place interventions such as career counselling and mentoring to support these aims.
Business need to provide finance leaders and the talent pipeline with global experience
In today's global finance function, it is important to ensure current finance leaders, and those destined to lead the finance function in the future have gained experience across different business units in different geographies. This exposure provides finance leaders with different insights into the challenges, issues and opportunities at national, regional and global levels as well as providing better understanding of the difference and nuances between emerging and mature markets.
Business must ensure finance leaders embrace open ways of working
Establishing an ethos of openness in today's finance function is important to its success. In particular finance leaders themselves must be prepared to counsel the views of others and be prepared and open to being challenged. This is particularly true as finance has sought to reposition itself as a partner to the business and as the success of the CFO role is increasingly predicated on the successful working relationships internally and externally to the organisation. A culture of openness in finance also resonates strongly with the younger generation of finance professionals in the workforce and previous studies have suggested it has a high bearing on the recruitment and retention success.
Business should look at finance transformation programmes to drive the appropriate balance of diversity
The perennial challenge for the global finance function is the balance that must be retained between processes that can be standardised and centralised, and those that can remain local. Finance transformation programmes have increasingly sought to centralise and standardise many finance processes, but finance and transformation leaders need to be mindful of the need to balance the diversity of knowledge that can be tapped into with finance people 'on the ground' with the benefits of cost reduction and standardisation through centralisation. Getting this balance right continues to be a significant challenge. For the full report: www.accaglobal.com/transformation
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