CHIEF VALUE OFFICER – THE IMPORTANT EVOLUTION OF THE CFO | KEY ACTIONS
Key actions The following table suggests some actions that leaders of organisations may take to embed value-based concepts in their management and to develop their finance teams appropriately.
ACTION
REPORT SECTION
What is value – a sustainable future ‘I think value for me is in two parts…and I think the traditional one, obviously, is growth. I do have investors that have the perspective that they have put money in this business and they are expecting a return and that’s primarily, as a CFO, probably also [the] call. ‘It’s demanded of the CFO that they understand how the organisation is creating and growing that return. But beyond that, and one of the themes that is emerging for us specifically, is … “what are the other components of value within the communities in which we operate and the responsibility that we have as a business to ensure sustainability so that you can continue to derive value and growth from this community?” ‘In my mind, it is becoming very clear that, as a CFO, it is quite important to have an eye on all of those aspects. We are moving towards [involving] employees now [in] identifying what [our] purpose should be… in relation to …our core business. Then it becomes easier to do good while making money because that is more sustainable. We are finding those things that we are good at as a business, which is creating connectivity…in creating this sort of platform. But in doing that we can link it very clearly to economic uplift for the community [and] for the country, and that means then that we have a secure future – one where you can continue to operate in this environment and continue to generate profits.’ A CFO based in Africa
Consider the organisation’s definition of value and how this may be applied across the range of recipients of value identified. Consider the value-based outcomes of the organisation’s sustainability transition plan. Assess how each of the six capitals works to create value for the recipients of value. Consider how real-time reporting across the capitals can be incorporated into performance-management processes. Appreciate that performance management needs to reflect value across the six capitals and therefore increasingly relies on a combination of financial and operational data. Establish a democratisation of data across the organisation, enabling a collective view of performance and value to be established.
1.2
1.2
1.3 and 1.5
1.4
1.4
1.4
Formalise the link between ‘value’ and ‘values’, through strategy.
1.7
Establish a ‘responsibility – accountability – consulted – informed’ (RACI) model across the C-suite covering the different aspects of value.
2.5
Establish a leadership structure that focuses upon value.
2.5
Embed the concepts of value into the risk-management and governance processes in the organisation, including within the remit of the non-executive directors. Consider the development path for those currently in the finance team to ensure that they have embraced the concepts necessary to perform their expected role.
2.5
3.1 and 3.2
8
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