Over the last decade, corporate scandals, failures, and the great recession, the CFO function of organizations has evolved beyond the corporate persona as number crunchers and budget cops, and has been invited to the strategy table. Not just as integrity champion or implementer of corporate controls and governance, but it was finally understood that finance is the universal language of business. Since that time, Finance departments globally became the cornerstone of corporate initiatives, large projects, and strategic decision making. The role of the Chief Financial Officer became the chief ‘go to’ officer for everything from Information Technology transformation to back office operations, taking on roles traditionally occupied by CIO’s and COO’s, even becoming heir apparent for replacing CEO’s in many major corporations.
Financial Transparency: Full & Accurate Disclosure
However, there are seasons in life both personally and professionally and while the spotlight has shined on finance professionals for several years, a backlash is beginning. At the core of this backlash is the same concept that brought the focus to finance as a strategic partner—Financial Transparency. In the wake of the implementation of controls, regulatory reporting, and systems to ensure transparency, the perception of finance is slowly reverting back to the number crunching budget cop persona of the past almost as though someone finally had the time to look up the definition of the now corporate buzzword of “transparency.” Transparency, as it relates to financial transparency, is defined as, “the full, accurate, and timely disclosure of information.” Business managers are now asking Finance for needed information, or to clarify the credibility of the information, but choosing to interpret, analyze and make business decisions independent of Finance’s support. Too often now, presentations and proposals to executive management lack independent review from Finance, while the presenter still emphasizes that ‘Finance provided the numbers’, giving them a Teflon covering in case the proposed action fails.
In order to avoid slipping back in to the corporate dark ages, Finance needs to proactively restore relevance to their craft. Moving beyond transparency and the simple disclosure of information, Finance must drive performance improvements and empower themselves to be the corporate steward before the next crisis arises.
Moving Beyond Transparency: Measuring Your Readiness
The following factors can determine your readiness to move beyond transparency:
Kevlar over Teflon – True leaders are those who would rather challenge what needs to change and face the firing squad than to remain silent and slowly die inside. Corporate America needs more professionals willing to put on Kevlar to champion change, and less professionals managing with a ‘no stick’ policy in an effort to keep their jobs.
Insight over Information – The amount of information available electronically is doubling every 12 months, so the adage of information is “power no longer applies.” Information is a commodity; the ability to transform information into insight is what makes Finance professionals valuable.
Performance over Politics – It no longer matters ‘who you know’ or even ‘what you know’ in your climb up the corporate ladder. Success today is defined simply by what you can make happen. Performance pays, and your ability to execute strategic initiatives that have a positive financial impact will move Finance professionals beyond transparency.