Finance Leaders Driving Change
Finance leaders are thinking about more than just balance sheets, with top priorities including such considerations as advancing goals for diversity and inclusion (D&I), increasing investment in compliance functions, and revising enterprise risk management practices.
With an eye on the future, CFOs are thinking about hiring, developing, and diversifying their workforce—even as 93% identified the availability of talented job candidates as critical. More than 60% of CFOs say their organization plans to boost D&I training, and 51% anticipate an increase in reporting D&I data to internal stakeholders.
While the economic impacts of the past year had a high profile, the pandemic also took its toll on employees’ well-being, emphasized the importance of mental health, and brought to the forefront environmental, social, and governance (ESG) issues. Against a backdrop of the U.S. recovering from the crisis, 69% of CFOs identify better reporting of ESG issues among their top two priorities—recognizing that those factors and related disclosures will continue to receive more attention from investors, customers, employees, and other stakeholders in the future.
The evolving business considerations around ESG factors have also created the need for a way to measure and manage them. Most CFOs acknowledge the challenge, with 68% saying that identifying frameworks, material issues, and metrics to focus on are a priority. The shift comes as large institutional investors and the Securities and Exchange Commission have sought to improve disclosures from companies.
Looking at internal processes, CFOs also cite the following as priorities: communicating to the board and audit committees on progress (63%); implementing technology, processes, and controls around reporting (63%); and establishing ownership of ESG reporting (62%).
CFOs say producing investor-grade ESG information (60%) and demonstrating value to stakeholders through ESG reporting (60%) are among their top concerns, while identifying appropriate talent to build and maintain their company’s ESG reporting programs is cited by 58% of respondents.
Finance leaders are confident in the U.S. economic recovery and more so in their own organization’s prospects for the coming year, but they are also aware that the road map requires organizational adjustments in a variety of areas. Uniquely positioned to provide enterprise leadership, CFOs have recognized the growing importance of working across departments, utilizing technology to improve efficiency, establishing and developing nonfinancial metrics, and hiring and retaining talented employees.