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LESSONS HAVE TO BE LEARNT WHILE RUNNING THE GAUNTLET
Arguably one of the most important questions about the crisis is what we might have done differently in the early days and weeks if we knew what we know now.
Carol Wilding asked CFOs to reflect on what they’ve learned and the guidance they’d give other CPAs or CFOs with the benefit of hindsight.
Responses overwhelmingly focused on a single topic: communication. CFOs wished they had communicated earlier, more and better, with a wide range of stakeholders.
If they could go back and redo their Covid-19 response, CFOs would communicate even more and sooner with:
- Their teams
- Employees in general
- Clients, customers and members
They believe better communication would benefit mental health and self-care efforts as well as stakeholder relations and board understandings of financial risks. Earlier parts of the discussion had also referenced how businesses in a range of industries need to communicate with and support start-ups, customers and clients, members, tenants and merchants in dealing with the crisis.
CPAs’ central role in gathering and reporting information about operations and finances, makes them an increasingly critical part of their organization’s communications efforts. Chima Mbagwu, director of the CPA Ontario Centre for Capital Markets and Behavioural Decision Making at Wilfrid Laurier University, sees CFOs becoming the “communicator in chief” for businesses, foreshadowing the roundtable’s consensus on what was most important in the Covid-19 response.
To date, most accounting research has focused on the CEO’s role communicating with stakeholders and infomediaries. However, the CFO is increasingly becoming a strategic partner in this communication role. CFOs are the prominent voice in investor relations and board communications. Here in Canada, with many mid-scale firms, we see this role extended, with CFOs more involved in communicating with stakeholders both within and outside their organizations. - Chima Mbagwu, Professor of Accounting, Wilfrid Laurier University
This is the latest stage in an ongoing evolution of the CFO role that has seen CFOs take on increasing responsibility for areas beyond finance. In its 2016 CFO survey, McKinsey found that CFOs had an average of five non-finance functions reporting to them. More than half oversaw risk, regulatory compliance and M&A, while 38% were also responsible for IT, with some even managing cybersecurity and digitization. And by 2018, CFOs had added another non-finance function to their portfolio of responsibilities, averaging six, of which half were digital activities.
In closing, Carol shared an analogy that if the Covid-19 crisis were a baseball game, the world would just be in the first inning. While she hopes we may be further along than that, she foresees a further need for CPA Ontario to stay closely connected to CFOs and other CPAs in the months to come. As the pandemic response accelerates trends in digitalization, remote work, online education and other fields, so it will speed change in the roles and responsibilities assumed by CFOs and the accounting profession as a whole.