The five priorities are:
- Get the basics right
- Know the drivers of business value
- Build a strong team
- Enhance your stakeholder network
- Accelerate innovation and technology adoption
The EY Global DNA of the Financial Controller Survey highlighted that 86% of controllers surveyed expect their role to change significantly within the next five years, with the focus of the role evolving to embrace value creation alongside value protection and value optimization. While titles vary across organizations, the findings outlined here apply broadly to the accounting leadership role, including both CAO and controller designations. Focusing on these five priorities will put new CAOs on course for an impactful first year and create a firm foundation for them to succeed as value creators.
1. Get the basics right
A new CAO must be up-to-date on technical accounting matters, including the specific reporting requirements and judgmental accounting topics that are relevant to their organization. They also need to have confidence in the organization’s control framework and regular engagement with internal and external auditors. A “fresh pair of eyes” is critical to challenge what may have become accepted wisdom and identify opportunities for continuous improvement and simplification. Examples of improvements cited by the CAOs interviewed include streamlining footnotes, enhancing dashboards and automating manual processes.
“We have a tremendous process that creates incredible detail,” says Robert Boyle, Senior Vice President, Controller and Principal Accounting Officer at Prudential Financial. “So, in the second quarter I stepped back and asked, how are we doing this and why? Is it to serve as a control mechanism or is it just being done to support me? If so, do I need it? We’ve cut out a lot of work that was being done to support me on a ‘just in case’ basis.”
2. Know the drivers of business value
Importantly, a CAO needs a strong understanding of their business and its drivers of value so they can craft a compelling narrative that communicates its financial performance to external stakeholders. CAOs who have been internally promoted have the advantage of being able to draw on their institutional knowledge of their organization to inform this narrative.
For example, Sarrah Schoenewald, Global Chief Accounting Officer at UPS, worked in investor relations, operational finance and financial planning and analysis within the business before she was promoted to CAO — with this prior experience proving invaluable in her current role. “That experience means I can look at the business through the lens of external stakeholders, the lens of operations and the lens of planning, forecasting and business analysis,” she says.
When a CAO joins their organization as an external hire, they will need to learn the business’s culture and ways of working. For that reason, they should proactively create time to meet people in different locations and at different levels of the business. “During my first year in the role, I met as many people as I could,” says Chasity Grosh, who was new to the food service industry when she joined Performance Food Group as Senior Vice President and CAO. “I travelled from location to location. I met people at the operating companies and at the corporate locations. I wanted to understand my key partners, what was important to them, and how I could support them in my role.”
3. Build a strong team
The interviews conducted for the report indicate that CAOs can spend up to 50% of their time on talent-related matters. This reflects their status as a senior leader heading up a large team that may contain hundreds of people, including people they manage directly, as well as an extended network encompassing shared services and external partners. The interviewees emphasized the importance of a new CAO holding conversations with their team, to get to know their strengths, development areas and career objectives. Once they have this understanding, they can then move their people into roles that better play to their strengths.
“For the first six months, I kept my team as it was, but since then I’ve made a lot of changes,” Chasity Grosh explains. “I looked at where people’s strengths were and made sure they were in roles that really drew on those strengths. You can have a talented person doing a really good job, but still make a move that’s very positive for their development and a benefit to the organization.”
A crucial part of any CAO’s job is helping to identify and develop the next generation of leaders within controllership and the finance function more broadly. “I focus on the high potential and the people one level down from my direct reports,” says Robert Boyle. “I have recurring, regular engagement with our future leaders.”
4. Enhance your stakeholder network
A CAO must engage with a broad stakeholder group, including the board, audit committee, other members of the C-suite and functional and business leaders. So, an early priority should be to proactively connect with key stakeholders to lay the foundations for strong future relationships, with the audit committee being a major area of focus.
“In my first year, my priority first and foremost was the audit committee,” says Robert Boyle. “They are a key stakeholder because at Prudential Financial, the CAO does all the earnings updates. So, I made sure I understood the audience and what they wanted and expect from the role. Prior to our earnings release, I walk through all the results with the audit committee.”
It is imperative that a CAO is seen as a trusted partner by their CFO, who will expect them to collaborate on strategic initiatives in addition to leading on technical accounting matters and regulatory compliance. New CAOs should therefore ask their CFO to outline their expectations around value creation.
“My CFO pulls me into conversations about what’s happening in various parts of the company so I can connect the dots in terms of the impact on accounting and just to learn,” says Chasity Grosh. “I’ve always said I can be the best CAO when I have a seat at the table, across the company, on topics that don’t appear to impact me at all. Because, in many cases, they do.”
5. Accelerate innovation and technology adoption
The CAO can play a critical role in the finance transformation process by leveraging technology, automation and data analytics to improve efficiency and deliver real-time insights that support enterprise agility. A good place to start is by determining the current state of transformation, and particularly AI deployment, within both the finance function and the organization more broadly. They can then go on to become an active collaborator on technology projects, both where finance is directly involved and where it can add value as a contributor.
“When it comes to AI, a lot of the conversation tends to focus on specific use cases,” says Sarrah Schoenewald. “But you really start to get a return on investment in AI technology when you build capability in the technology that can then be deployed to solve multiple problems. Look at how you can re-engineer processes with a technology-first mindset. How can you use automation in different and unique ways to address a challenge?”
A good data set is the foundation of both process simplification and technological transformation — so a new CAO should help to drive the development of robust data infrastructure, including data lakes, as well as data controls and governance. “Building strong foundation data provides a jumping-off point for simplification,” Sarrah Schoenewald explains. “Don’t underestimate how important it can be just because the return on investment isn’t super-clear to begin with. In the long term, there are many benefits to having better visibility of data and having it all in one place.”
To get backing for new transformation projects, a CAO should have a realistic vision. They must be able to explain why new technological tools will be valuable and enable the business to improve outcomes in practice. “I like to think I refocused our priorities in transformation,” says Robert Boyle. “We had some priorities that were very aspirational but not executable in the near term. I tried to sharpen the focus on what we could realistically move forward.”
