There are three action areas that are likely to be important in providing a new future for finance and corporate reporting:
1. Accelerating the digitization of finance and building trust into AI and other smart technologies
As a starting point, finance leaders should build a clear picture of the new risks that could emerge in an AI-powered finance function, from whether algorithms reflect any biases that could skew results, to legal risks and liabilities. To build trust in AI, finance leaders should define a clear approach to governance and ethics. Ethical principles around the transparency of AI should be codified, lines of accountability should be formalized, and policies and procedures should be put in place for regular reviews and ongoing risk assessments. Ensuring finance employees have the resources and training required to use these systems appropriately will likely be important, as well as consulting with policymakers to understand how emerging ethical principles could influence AI regulatory developments.
2. Putting finance at the heart of sustainability and ESG reporting
The success of nonfinancial reporting, including sustainability and ESG reporting, is likely to depend on how relevant it is to stakeholders, how trusted and credible it is, and how clear the link is between financial and nonfinancial information. This begins with finance engaging with, and understanding, the requirements of stakeholders, particularly investors, and translating that into relevant and material metrics and disclosures. Finance should look to play a central role in instilling discipline into nonfinancial reporting processes and controls to build confidence and trust. Establishing effective governance practices, and seeking independent assurance over nonfinancial processes, controls and data outputs, will likely help to build trust and transparency with stakeholders. CFOs and financial controllers, whose teams have extensive experience in establishing processes, controls and assurance of financial information, can bring their financial leading practices and experience to support sustainability and ESG reporting.
3. Defining a talent strategy that focuses on reskilling employees for a very different future
Finance leaders should take an assertive and innovative approach to reskilling their people, to equip them with the capabilities they are likely to require in the future finance function. In a market where many finance functions could be competing for the same sorts of skills, and where demand will likely outstrip supply, it is increasingly necessary — and even cost-effective — to futureproof core elements of the current finance workforce. Important actions could include undertaking a gap assessment of existing staff skill sets and developing new incentives to encourage the finance workforce to learn new skills. But as well as a leading learning experience, finance leaders should look to develop a culture of continuous learning. This is because, in an environment where skills should keep pace with developments in technology, finance people should look to have the desire and ability to grow and adapt their skills.