Best Practices

CFRI's Controller's Roundtable Reveals Finance is Having its Brave New World Moment

Departing from technical accounting topics, this year's Controller's Roundtable focused on how finance can function when its technical skills are merely part of what is expected from organizations.

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Finance has entered its Brave New World. Unlike roundtables in the past, which were thematically dominated by discussions of technical skills and best practices, this year’s discussion reflected the ever-expanding pressures facing the modern financial executive. Marie Gallagher, SVP and Controller at PepsiCo Inc. articulated this thought, saying “I have been in my role for eight years now. Initially, a large part of my job – almost all of my job – was financial reporting and technical accounting. And that has warped based on what is going on in the world. Based on the fact that the world is a lot smaller, and that there is so much going on in global economies, coupled with IT outsourcing. The job is a lot harder and really requires you to think about what’s going on in the world.”

Beyond keeping up with an increasingly complex geopolitical climate, the panelists devoted significant time expressing concerns on how to lead in the fourth industrial revolution, how to foster teams that are more diverse and inclusive, and their experiences with regulators.  

The Game Has Changed

The sustained, disruptive impact of emerging technologies emerged as an important theme for the panelists, who discussed how they can help their teams proactively embrace change. Stephen Rivera, VP Global Technical Accounting Advisory Services & Policy at Johnson & Johnson, posited that that the empathy we feel towards employees facing disruption should be replaced with optimism and creativity, explaining that it is the financial leader’s job to ask what they can do for those employees and how they should re-engineer the disrupted role.

Rivera further explained that finance employees currently spend most of their time getting the numbers – without looking into them and gaining insights. Through embracing emerging technologies Rivera postulated that this paradigm will shift, enabling finance professionals to spend their time generating deeper insights. Aaron Anderson, Chief Accounting Officer at PayPal Holdings, Inc., noted that “Where you differentiate yourself is actually being able to analyze information and drive out the insights so we can actually influence the action plans."

Beyond helping team members look forward to how roles will be re-defined in the future, each panelist affirmed that executives must lead through providing their teams with the clarity of vision to boldly move forward.

Growing Pains

While eager to have diverse teams, Anderson opines that the world of finance still has a long way to go, musing “As a profession, we’re still in inning number one of actually understanding and measuring diversity. And it’s a little frustrating that we haven’t gone beyond that [sic]. We only look at the measurables. We don’t get into the immeasurables [sic] and other aspects that make a team more well-rounded.” The panelists noted that each finance team will have to be intentional when creating more diverse teams, noting that without support from talent management, it’s often easiest to leverage one’s network.  

The panelists readily agreed that they are accountable for leading the way, Anderson further articulated “Our legacy as leaders is how we develop our people. We are entrusted with many different types of people. Whether it be their gender, the color of their skin, their background, or their experience… Our job as leaders is to make sure we get the best out of our people. When we get the best out of our people, the company flourishes.”

Building Bridges with Regulators 

Each of the three panelists commented on the benefits of working with regulators and standard setters. Rivera noted that preparers can communicate about what they are struggling with, which then enables regulators and standard setters to better understand the difficulties that financial statement preparers face and better communicate relevant issues and improvements. Pointing to his early-career experience at the FASB, Anderson similarly acknowledged that the FASB desperately needs and wants more insights from the preparer community; he further stated “regulators are there for a reason, they have a mandate. When they do their job very well and you support that – you do your job.”  The focus is to continue to work to align with the regulators and standard setters in order to find common ground, align on objectives, and build a productive environment.

Breaking Out of Its Shell

As the roundtable was coming to a close, the panelists reflected on the continued need for finance to expand its influence within organizations. Underscoring one of the roundtable’s common themes, Anderson noted the importance of bringing your whole self to the job, commenting “You’ve got to view yourself as more than as an accountant. You’ve got to view yourself as a finance professional. When you start viewing yourself that way, you challenge yourself." He further comments that this enables finance professionals to look beyond their constraints and take their seat at the table.

Pointing to companies that no longer exist, not because of poor sale but poor accouting – Rivera noted that the controllership can define itself by the way it contributes to an organization’s reputation. Gallagher expanded on Rivera’s point to include the ability for accounting to drive value through relationships, saying “it comes back to the relationships. Everything your company does has accounting implications. You have to make sure that you have the proper relationships so that when all these departments are undergoing business transactions, they know to check in with you before they do something significant.”