How Finance Leaders Can Inspire a Culture of Trust and Integrity

More than ever before, employees and customers want to associate with businesses they can trust. Here’s how CFOs and their teams can have a pivotal role in building greater trust in 2021 and beyond.

Throughout this series, we’ve examined the global macro trends forcing finance leaders to rethink some of their most fundamental approaches to supporting their companies. In this article, we take a closer look at the topic of trust—a prevalent issue given today’s global economic and political landscape. In 2021 and beyond, finance leaders will play a pivotal role in building a culture of trust throughout the business.

According to the “2020 EY DNA of the CFO” survey, the pandemic has created a time of great uncertainty, but also an opportunity for finance leaders to demonstrate the critical strategic role they can offer in helping to transform the future of the enterprise. However, doing so will likely require major changes in how finance executives lead, including how they approach ideals such as trust and integrity.

Stakeholder Capitalism and Building Trust

Even before the outbreak of COVID-19, change was sweeping across the social, political, and economic landscapes under the banner of stakeholder capitalism. Business leaders have been under pressure to deliver a more inclusive, citizen-driven, and sustainable economy where profits are optimized not maximized, and organizations function more for purpose than for profit.

One driver is that today’s employees are pushing back, wanting to work for companies that are purpose-driven. And they aren’t just demanding this for themselves. Consumers—whether purchasing for themselves or for their organization—increasingly want to buy from companies that demonstrate integrity in how they treat their employees, their customers, and the environment. Consumers seek honesty, transparency, equality, and a better overall experience.

While profit may not be the ultimate goal of stakeholder capitalism, research shows that companies with high levels of purpose grow faster, have higher profitability, and outperform the market by 5% to 7% per year—on par with companies with best-in-class governance and innovation.

In terms of how this impacts the finance function, Jeff Thomson, president and CEO at the Institute of Management Accountants (IMA), wrote that “automation has moved the finance function closer to business strategy and decision-making, as basic ‘number-crunching’ is left to software. This has, in turn, altered the CFO’s role. Another key development has been the emergence of ‘stakeholder capitalism.’”

The article asserts that the “traditional role of the guardian of an entity’s finances has been superseded by a new reality: one where the CFO has a broader function across the piece, where performance is measured against the three Ps of people, profit, and purpose that are increasingly used to evaluate success.”

Some critics may have dismissed stakeholder capitalism as large organizations merely paying lip service to the changing needs and wants of employees, partners, and consumers. However, there is real evidence that companies are adopting new practices and in turn redrawing the boundaries of trust and integrity. The real challenge comes in creating the metrics that can succinctly communicate the benefits of stakeholder capitalism to the broader business. One such initiative is the World Economic Forum (WEF) Measuring Stakeholder Capitalism index, created to help CFOs explain in a consistent way how their investments in people, the planet, wider social prosperity, and governance can create value for their stakeholders.

A collaborative project involved EY teams and other major accountancy firms, non-governmental organizations (NGOs), and investors to develop and publish universal environmental, social, and governance (ESG) metrics and disclosures that companies can report on regardless of their industry or region. These metrics and disclosures align with existing standards, enabling companies to report nonfinancial disclosures with common definitions and meaning. According to the study, more than 120 members of the WEF’s International Business Council are expected to adopt these metrics, paving the way for wider adoption.

The report states, “Long-term value is likely to move [stakeholder capitalism] from aspiration to reality particularly if CFOs take the lead in embedding it into corporate reporting, organization culture, and strategic decision-making.”

Critical to Trust: Technology and Skills Development

The evolution of technology and pace of change brought about by cloud, mobile, and digital technologies are transforming the way finance operates. COVID-19 and the rise of stakeholder capitalism—mixed with an uncertain political and economic landscape—have intensified the issue of trust on two levels.

First, CFOs and their cohorts need technology they can trust; for example, having confidence in the data that’s at their disposal. This means knowing that their technology partners can deliver when it comes to their architectural, operational, and organizational security, including privacy and compliance requirements.

Second, the year 2020 also saw the continuation of consumers and businesses disassociating themselves with organizations that failed to meet the required standard when it came to the execution of their values. Stakeholder capitalism has brought increased expectations of what businesses should deliver at a time when consumer trust is at an all-time low. Customers make technology purchasing decisions based on a broad range of factors, including environmental commitment; how partners treat their employees, customers, and community; and their long-term commitment to serving customer needs. It is no longer simply a case of speeds and feeds. 

Companies with high levels of purpose grow faster, have higher profitability, and outperform the market.


Trust also extends into talent and how finance pieces together the skills it needs for the future. In the EY study "How Can the CFO Evolve Today to Reframe Finance for Tomorrow?," it is argued that as markets become more fluid in the future, so will talent. As the authors state, “The leading and brightest finance people will probably choose to build their affiliations with organizations that can develop their skills. Developing a future talent strategy for the function—based on continuous and dynamic learning—will likely be important to earning the long-term loyalty and commitment of creative and talented finance professionals while meeting the challenges of constant change and disruption ahead.”

CIO and CFO: Building a Circle of Trust

Successful digital transformation within the enterprise requires collaboration between CFOs and CIOs—and that takes trust. This includes exploring the critical connection points between finance and IT that can help their departments better meet business goals. An IT leader’s top priority is keeping their organization’s data safe and private. While they look to increase technology investments and embrace innovation, they must also secure and protect the intellectual property of their customers, employees, and organization.

These multiple responsibilities make it difficult to pursue new innovations without disrupting the business. A CFO’s responsibilities have historically been financial, with a focus on setting budgets and maintaining profitability while keeping the organization compliant with data protection rules. Balancing this mindset along with more strategic ambitions of providing insights back into the business and helping set the stage for change within the enterprise can be a daunting challenge—not to mention a significant change for them.

CFOs and CIOs need to work together to take full advantage of the benefits of cloud computing. Although their responsibilities differ, their priorities converge. They want the success, growth, and profit that come with a data-driven enterprise.

Workday President and CFO Robynne Sisco, in a conversation with Workday CIO Sheri Rhodes, said, “It's about the finance and IT organizations coming together to support the strategic objectives of the company, and a strong relationship between the CFO and the CIO will build the foundation for companies to innovate and to grow. That becomes critically important, particularly in a world that’s changing as fast as it is today.”

As organizations and citizens alike look to rebuild in 2021, two keywords will be trust and integrity. COVID-19 and stakeholder capitalism have changed the game, and organizations must work harder than ever to meet consumer expectations and build trust. The finance function will be front and center, guiding the business with the data it needs to make decisions and understand what success looks like in a landscape that continues to be anything but certain. And, as the sun starts to set on the global pandemic, business leaders continue to expect the office of finance to guide them into a brave new world.

To learn more on how finance can drive enterprise digital acceleration, check out our eBook on The Changing World of Finance

More Reading