Adam: Hello and welcome to PwC Canada's newest podcast, Finance in 15, a series that explores finance transformation and what it means for leaders in the finance function. My name is Adam Boutros and I'm your host. Hello and welcome back to the Finance in 15 podcast. For our new listeners, Finance in 15 is a PwC Canada podcast that explores finance transformation and what it means for leaders in the finance function. During our first eight episodes, we explored some of the key elements of finance transformation from people processes to technology and compliance. And today we're very excited to launch season two of our podcast. For our first episode, I'm joined by my PwC Canada colleague, Marino Fremis, who's a partner in our finance transformation practice.
Marino: Hey, Adam, it's great to be podcasting with you again.
Adam: All right. Great to have you back, Marino. And we're delighted to welcome Helen Brand, the chief executive of the Association of Chartered Certified Accountants or ACCA, which is a global organization. And so we're hoping Helen can bring us some insights from around the world. For the past few years PwC has worked directly with the ACCA to explore key issues impacting the finance profession through activities like roundtables and surveys, including the recent PwC ACCA CFO survey, which included respondents from 98 leading companies in Canada. So today, Helen Marino and I are going to talk more about the findings, and we'll explore what they say about the future of the finance function and how it can remain relevant at a time of change and disruption. Welcome, Helen. And to start things off, can you tell us a little more about the ACCA in your role?
Helen: Well, hi Adam and thank you for inviting me to join this podcast. Really exciting. As you said, I'm the chief executive of ACCA, which is the global body for professional accountants. We created in 1904. And we're now a thriving community of 233 thousand members and 536 thousand future members based in over 170 countries around the world in all sectors and industries. We describe our purpose as being a force for public good and to lead the profession by creating opportunities. So we like to offer everyone everywhere the opportunity to experience a rewarding career in accountancy, finance and management. We want to develop through a qualification and of course, ongoing learning, strategic business leaders, forward thinking professionals that with financial business and digital expertize.
Adam: That is super exciting and really looking forward to some of the insights you can bring from from what you're hearing around the globe and really where the where the future of our profession is headed. So, you know, maybe to jump right in and and get started. Could you tell us a little more about some of the work you've been doing with CFOs in particular?
Helen: Sure. Well, we've been doing a wealth of work, particularly under the banner of brand themes. That's where we kind of try and focus on particular areas for periods of the year to reinforce the brand and the work of our professional insights team, which is our research and innovation team. A lot of that work is about scanning the horizon with CFOs and involving them in that work, but see what the future holds for the profession. And that's what helps us to refine and update the qualification on the ongoing learning that makes accountants and CFOs particularly relevant. So over the past year, we've been looking at the transformation of the profession, our ability to report about that in mid-November. Our profession so of course, look at what it means to be a CFO now. We're really feeling and hearing that it's a role much more attuned to the strategy of organizations working more collaboratively with the rest of the c-suite. And it's a role that's really spending a lot more time communicating value. And of course, we're talking around the time of COP26 and that whole management of climate risk and broader sustainability risk is very pertinent now to the role as well.
Adam: Yeah, I'm glad you brought up some of those topics, Helen, I mean, I think, you know, we keep hearing it over and over again in and covered it quite a bit in the first season around just the expanding role of CFOs, you know, certainly when we're looking at things like climate change, H.R. and risk, perhaps five or ten years ago, they were not within the purview of the CFO and finance teams. But today the decision making is so integrated it's just absolutely critical for CFOs to understand be on top of of these areas. So and I think that actually aligns nicely to the to the 2021 CFO survey. So maybe you want to cover a couple of the findings and takeaways from there.
Helen: The global headline really is about how finance professionals can retain the inherent relevance that they gained during the pandemic, but actually that most CFOs don't believe it's going to last. So that's a real challenge. Finance teams really need to convince organizations they should continue to play a wider strategic role in driving success. We've also seen from this report, and I don't think this will come as a surprise to many people, that it's been five years and five months evolution due to the pandemic. So organizations have looked to them to plot that path to financial stability and what have been hugely challenging conditions. And of course, a really strong wellbeing message in the report's findings, with interviewees reporting teams are feeling fatigued and jaded having worked harder in the last 12 months than ever done before. It could be easy for finance teams to shrink back into, you know, that familiar scorekeeping role but it really would be a wasted opportunity for finance professionals and actually the organizations that they're part of and serve. So it's clear that finance functions are really stepped up and they should be congratulated for this but it's about maintaining that position.
Adam: There are some great insights there, and, you know, certainly the five years and five months kind of concept, I think I think all of us are kind of feeling that it was just such a period of accelerated change. And Marino, how does all that sound to you and what are you hearing from finance leaders that you're working with?
Marino: What always fascinates me, Adam, and how my conversations with finance leaders really reinforces our findings in different but similar ways. You know, we talked a year and a half ago now when we were in the early days of the pandemic, it was really more about triage and just getting help to cover those immediate hot spots. And then right after that, there was a lot of investment of time, effort and money in areas of finance that you know, we would traditionally say had been more neglected or deprioritized, really, you know, especially the areas of financial reporting, performance reporting, forecasting. But you know, now that as we get to what we all hope and believe is the tail end of the pandemic, I'm noticing, you know, really increased discussion around slowing down transformation and probably not always for a good reason. Now, if I look at the survey and I have a finding from it, the survey found only 37 percent of Canadian respondents felt that there had been a lasting change in the relevance of the finance function as a result of the pandemic, while 30 percent felt the change had yet to be capitalized and 23 percent said there had been no change. So fully one quarter felt that, you know, no significant change had really happened there. So no one is explicitly coming out and saying it yet. But I get the feeling that some believe that there's maybe less of a need or no longer a need to invest and that the speed of business insight is no longer needed. As we come out of this, and I would actually say the opposite might be the next challenge driven by an external variable is just around the corner. Now know now isn't the time to reverse course or slow down. I think now's the time to actually invest to accelerate the defensive capability you can get from from finance.
Adam: You know, I think both of you really sort of double down on this concept of, you know, a lot of things change but is it lasting? And so, you know, how do we make it sustainable? I don't know, Marino, if you have a couple of tips around organizations that you really see, make the change, stick the best. Anything to share with our audience.
Marino: Well, I think it's the ones that don't tie to the immediate thing that's in front of them, right? You know, I think when you're resolving for a larger capability gain, those are the ones that are thinking more longer term, yes, the catalyst was the pandemic. Yes, the catalyst was a particular capability issue that emerged from some challenge. But the solution wasn't designed to solve my immediate problem. It was designed to solve that plus what I actually want to be as a finance function going forward. So when you're able to tie that to strategy, a longer term vision to a capability gap that you and your team can solve, that has a much higher chance of sticking and lasting because it wasn't just tied to let's get through the pandemic, it was now we want to evolve and or grow to a higher order finance function.
Adam: Yeah, and it takes work actually to really embed the finance team into the strategy, into the vision but it's just, you know, again, the places where we've seen success, that is the the role that the CFO is leading the organization down and it makes a difference. OK, well, let's let's change gears, Helen, in your intro you brought up ESG. Such an important topic. And in fact, it was touched on in the survey. So maybe you can share some, some insights it highlights.
Helen: Well, yeah. And I think this relates to what Marino was saying about true transformation. And you know, the next thing around the corner that we're not in a static state having got through the pandemic, which actually isn't over yet either, but there is that constant need to be thinking about the future and to be ready for it and equipping itself. And certainly ESG is a massive part of that. It's very clear about the urgency of business action within the global context of climate change and that broader piece of sustainability around human capital, natural capital. Making sure that it's integrated into the strategy organization. So I see say this as a real opportunity for finance leaders to be even more relevant. They can play a fantastic role in this emerging area with the ethical core of the professional accountant with the ability to synthesize and analyze data and to support the business.
Adam: Marino, what are you seeing out there in the industry and how our company’s tackling this challenge?
Marino: Yeah, first off, Adam and Helen’s one hundred percent right, many are at the early stages dealing with these challenges, and the immediate key issue is to deal with sources of ESG data. You know, unlike financial data, ESG information can come from multiple sources, making this a critical area for finance teams to play a leading role really in helping with data integrity and controls around the data sources. And you're bang on correct. You know, Helen, another key issues after these reports begin to be published, you know, how do you start translating into useful insights for your people on the ground who are making use of it in their everyday roles? And this is something that organizations are going to have to deal with in subsequent phases of their ESG journey so that those that are leading are already thinking about, you know Adam, data structures and downstream reporting to make ESG more impactful to their teams. So they're already kind of getting ahead of by thinking about the end game versus the immediate gain. If I can put it in those words.
Helen: Good news in all of this is the urgency to address issues means the standard standard setting. I think there'll be some really important announcements around COP26 on that and the approaches to ESG reporting should evolve faster than what we've seen in the financial reporting world over the past few decades. So I think the toolkit will be there relatively quickly as opposed to what happened in the financial reporting sphere.
Adam: Yes, it's such an exciting time, I mean, finance teams are going to have such a role to sort of shape how this ESG reporting comes together, the kind of insights that come out of it. I think it's a chance to really bring some more meaning in day to day work for our finance press around the world. So a lot of this goes back to the need for finance teams to make sure they remain relevant in the future. Helen, what are your thoughts on some of the things that will be key to staying relevant at a time of change and disruption? For example, what does a typical finance function look like in five or ten years? And how do you see the CFO role evolving?
Helen: Well, I'm glad to say that we examine this in a recent report and we called it professional accountants at the heart of sustainable organizations. And I think that gives a clue to what the competencies that we might see and how the finance function needs to evolve. We've looked at those competencies and we've talked about the skills, knowledge and behaviors required from a professional accountant to meet the future needs and demands of the profession. And this is about balancing those core competencies, collaboration, ethics, sustainability, expertise, to fit the role and stage of career. We've identified four of what we call career zones. And I think these are quite exciting. So worth sharing with your listeners. So zone one, transformation drivers. Zone two, enterprise analysts. Zone three, assurance providers. And zone four, stakeholder reporters. We see professional accounts assist the sustainable business of finance professionals over the next decade. You know, it's core to that good business, decision making, creating new organizational value, protecting the existing value and communicating that to the outside world through reporting. And looking ahead coupled with the rise of digital tech, I mean, that's just the ultimate cliche to mention that, but it's absolutely going to continue. We still believe that the human touch is needed and where professional accountants bring their competencies, and ethical and professional judgment to bear alongside their technical mastery, the technological know how to support those organizations to generate sustainable societal value. And we see this - and I think Marino's talked about this today a fair amount - we see this as the profession being resilient for the future and the professionals in it being resilient.
Marino: But, you know, it goes back to some of those simple concepts about, you know, with what's happening with digital technology and changes that if you look at finance, you know, you look at a steward and operator role and that transaction oriented environment, it's moving. It will continue to move to more of an exception based environment, you know, leveraging technology to do the work and leveraging our human capital to look at the exceptions and the challenges that have to be overcome. And that all that human effort is now reinvested in what I would see as a shift from accounting oriented finance to finance oriented finance where you're moving into forecasting and reporting and analysis and analytics. And that's where the efforts are going to be is how are we helping manage performance. And I see that shift continuing. I see it evolving further and the top performers will be even better at it and even the medium performers will start to evolve into those roles where it's finance as a business manager or as a performance manager versus finance as an accounting function.
Adam: Yeah, absolutely. So as we're getting to the end of our podcast here, I think it was it was clear from the survey that CFOs and finance teams, they've seen so much change. They've seen so much disruption. I'll go to each of you. Maybe start with Helen. What do you think are the key takeaways from all of this for CFOs and finance teams?
Helen: Well, of course we’re open to new possibilities. I think even in the short conversation, we demonstrated that. And there are so many advantages to keeping an open mind and making sure you've got the biggest canvas to work on, including impacts of issues like diversity and inclusion that are not always top of mind within the finance function, but really important in terms of generating business value in the future.
Marino: You know, just thinking about that and the big takeaway, there's so many things we can talk about, but we must really reinforce the point that you need to have a team with capabilities to manage change. And really the only variable we have that we can manage is how fast it's going to happen and how fast we can manage it. You can't turn back or slow down on embracing change. So for me, what it really means is you have to build a finance team that is more business savvy, is more nimble and is more capable of enabling the business to achieve results while change is happening around it. That's, I think, the takeaway we got to think about. It's not process technology anymore. It's that plus people are being able to manage change in a constantly evolving world.
Adam: Thank you for the great insights, Helen and Marino. If you would like more details on the PwC and ACCA survey reference throughout this podcast, please visit our website. And in our upcoming episodes will continue to explore the key takeaways from the CFO surveys and insights from discussions we've been having with CFOs at Canada's largest organizations. We'll dive even deeper into some of the key topics we talked about today, like ESG and Workforce of the Future. So I hope you enjoyed our first episode of season two and would love to hear your thoughts on the series. Please be sure to subscribe, share and leave us a rating or review. I'm Adam Boutros and this is Finance in 15.
