The role of the CFO and finance chiefs is increasingly critical to decision making when it comes to corporate objectives, beyond the bottom line and the P&L. It is becoming a role focused on longer term issues, such as ESG issues, security, ethics and technology.
As the accountant’s role expands, however, the profession has had to deal with a global decline in trust when it comes to business leadership and audit. High profile business collapses like Carillion and Patisserie Valeris have put audit – rightly or wrongly – under intense scrutiny.
At a recent Chartered Accountants Worldwide and Edelman webinar on rebuilding and retaining trust, accountancy leaders from across the world, including ICAEW CEO Michael Izza, discussed progress in audit and corporate governance reform, and the profession’s role in shaping the future.
Penelope Mantzaris, senior vice president from Edelman Intelligence, started the session by talking through its recent survey of financial decision makers. Three quarters say they rely on Chartered Accountants for strategic guidance, and recognised the crucial role that accountants played in navigating through the pandemic.
While purpose-led issues such as D&I and environmental sustainability are not a current top priority, they are becoming more important. “Chartered accounting professionals show a desire to step up and show leadership in this area and are more likely than non-CA's to see it as a key responsibility,” said Mantzaris.
Trust in accountants has been steadily increasing since 2018. Trust in Chartered Accountants has fluctuated but has largely recovered. Three out of four respondents said that Chartered Accountants play a vital role in helping businesses adapt to new challenges.
This is promising news, said Freeman Nomvalo, CEO the South African Institute of Chartered Accountants, but the profession should not become complacent. He quoted Richard Brook’s book Beancounters to highlight that it is the average worker that suffers when corporate governance and audit fails.
“While the profession may feel that it is unjustly being given negative attention, it's important that we heed these calls from our stakeholders and look at how we hold our members accountable.”
Business is getting more complex, he said, with disruptions caused as a result of technological advancements and threats posed by environmental issues. Accountants must keep up to date with these issues and need to be able to respond appropriately.
“In South Africa, we established what you call the business emergency rescue, and we were basically helping businesses to really think about some of their models,” he said. “...Find ways in which they can respond to the COVID pandemic. Investors obviously needed to know what was happening with their investments.”
To maintain progress in rebuilding trust, the profession must respond more quickly to hold bad actors accountable. We've done quite a lot of work in this area to try and speed that process up,” said Nomvalo. “But there's a lot of work still to be done.”
The Australian financial services industry has been challenged in recent years, said Carolyn Colley – Non-Executive Director at the Australian Securities Exchange (ASX:ASX) and former Co-founder of Faethm. Pre-pandemic, a major Royal Commission into the operation of financial services, which led to a lot of regulatory change and scrutiny, she said. “It also resulted in some big changes in governance, and Chartered Accountants have a big role to play there.”
However, like in South Africa, the pandemic has been an opportunity for Chartered Accountants in Australia. “We really looked to the accountants to look after the businesses in the same way that the medical profession was standing up and looking after our well being. That really required a lot of hand holding and analysis.”
The Trust Barometer is a call to action to broaden the base of trust, said Ronan Dunne, Executive Vice President and Group CEO of Verizon Consumer. The majority of Chartered Accountants work in industry, not in practice. Many don’t necessarily work in finance roles – like Dunne, they work as CEOs and other leaders.
“There is a clear credibility for the profession in relation to trust, ethics, business performance, etcetera. I really see the opportunity for us to broaden the base of leadership, built around the credibility and the ethical standards that the various chartered Institute's have established.”
Accountants should seize the opportunity to be more influential in the business environment, said Dunne, particularly in areas such as establishing purpose and citizenship. “Chartered Accountants have a hugely important role to play in the reestablishment of the bona fides of experts...whether it comes into areas such as cybersecurity, data integrity, other areas, or just simply the role the business has and the credibility it has in moving us forward.”
This includes ESG, Dunne explains. Finance and accounting professionals, particularly Charterd Accountants, can play a major role in bringing ESG issues into the mainstream and “Into the forefront of how we run our businesses in a fundamentally sustainable way.”
Following the patterns of the rest of the world, UK Chartered Accountants were the first port of call for businesses during the pandemic. “Chartered Accountants may not have saved lives, but they did save livelihoods,” said Michael Izza.
The World Economic Forum has also recognised the importance of accountants in delivering a more sustainable business environment, describing them as the first responders of the business world, which very much reflects the role that accountants played globally during the pandemic.
With COP26 taking place in the UK, headed up by Chartered Accountant Alok Sharma MP, it is important to acknowledge the enormity of the challenge that the profession faces in addressing climate change. “The good news is that Chartered Accountants are problem solvers. We look to how we can find solutions for these things.”
Businesses are in a battle for the best talent, and people are looking for businesses and organisations that demonstrate consistent purpose when choosing new roles. “We have a fantastic opportunity to bring these two threads together and say: let us set up and define these transformational capabilities where all organisations are essentially short of skills, but bring them into the context of how we build a better society, better organisations and better business.”
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