To enable you to thrive in this new world, a CFO must expand their role as Guardian of the business. CFOs must see themselves as the driving force in the company’s efforts to master increasing complexity, while incorporating the behaviors and systems necessary to defend against existing and emerging threats to business continuity.
Companies of all sizes rely on their CFOs to develop internal control systems and ensure financial compliance with tax and regulatory agencies. The entrepreneur and key stakeholders will better navigate the future if they ensure their CFO is accountable for maximizing the integrity of overall corporate information, and expanding the compliance.
The successful accomplishment of this broader mandate will require the CFO to strengthen its collaboration and partnership with other functional leaders. This success will also depend on the intensity with which the leadership team commits to honing its ability to convert information into ideas and insights. There are two initiatives your CFO can take to create greater visibility of information-related opportunities, as well as potential compliance issues.
Mastery of digital transformation
The recent pandemic has accelerated the digital transformation of all businesses. Over the past year, it has become clear that companies that want to succeed must constantly adopt emerging technologies to exploit the opportunities offered by digitalization. Companies that choose the right solutions will succeed in turning the promise of better information into increased revenue and reduced costs.
Your business is likely to invest more in technology. Business leaders must, of course, rely on their technology advisors and market knowledge to drive a digital transformation; however, the contribution of the CFO should not be overlooked. Entrepreneurs and CEOs should encourage a partnership between their technology advisor and their financial advisor to ensure that the technology selection process is sufficiently rigorous and comprehensive.
Decision makers often want more information; however, there is no guarantee that this will lead to better decisions. In most organizations, the finance team has the most experience in absorbing large amounts of information, and structuring that information to make recommendations. Encouraging collaboration between finance staff and your digital marketers will lead to more consistent, accurate, and actionable information.
Creating a Culture of Compliance
The reality is that discussions of “compliance” are low on the list of things that most people are excited about, and rarely the driving force behind most CEOs or owner-operators. For finance and operations teams, compliance may not be their primary passion; however, their functional success is directly dependent on processes that ensure compliance requirements are tangible and met. Compliance issues have grown in a post-pandemic world. The fact that workers are accessing corporate systems and confidential data remotely puts more emphasis on protecting customer information and adhering to internal practices.
It’s no surprise that the first step in creating a culture of compliance is with the leadership team. For most companies, choosing to assign responsibilities for this compliance culture to the CFO will reinforce, among employees, the organization’s commitment to a well-established overall compliance framework. Your CFO should bring a compliance mindset to the business. It is equally important that it provides proven methods for establishing compliance systems.
When the initial components of leadership engagement and senior executive accountability are in place, the CFO can work with colleagues to introduce three additional elements that have proven effective in the area of financial compliance. These elements are Visibility, Review and Corrective Actions. These three elements have proven essential for all financial executives to present a reliable compliance framework to tax authorities, regulators, and financial stakeholders.