CFO Leadership

EH Trade Talk: The Evolving Roles of Controllers and CFOs  

April 2021

Recorded: April 2021

In this episode of our EH Trade Talk, host Andrew Gertz talks with guest Neil Brown, Executive Director of Controllers Council, about The Contemporary Controller—Changing Roles and Responsibilities.

Check out the recording and transcript below. 

Andrew Gertz: Hey, everyone. This is Andrew Gertz, Digital Marketing Manager for Euler Hermes. And I'm excited to be your host for this edition of EH Trade Talk. Even before COVID-19, LinkedIn had ranked adaptability among the top five soft skills for businesses. Obviously, the need for that skill has only grown since the pandemic and all the economic repercussions that's brought. Today we're going to be talking about how well controllers and CFOs adapted, and how has the role evolved. And to help us with that, I'm very glad to get to talk with our guest today. That's Neil Brown, Executive Director of Controllers Council. Neil, how are you doing today?

Neil Brown: Hi. Very well. Thank you for including myself and the Controllers Council today. We appreciate the opportunity and also the opportunity to share this important study with you.

Andrew Gertz: Yeah, absolutely. Thank you. And Euler Hermes is a proud partner of Controllers Council. So we love the work that you do. Just to start out, for those that might not know Controllers Council yet, or the study that you did recently – the Contemporary Controller – can you tell us about how the study came together and a little bit about your organization?

Neil Brown: Yeah, you bet. Well, first, a little bit about Controllers Council. We're a professional member association and a community. We're laser-focused on supporting corporate controllers, the CFOs and related executives with career training, peer interaction, and leadership opportunities. So back in 2020, that arguably the most bizarre and difficult year of most of our careers and maybe all time in history, we knew that 2020 was going to be a year of seismic change for sure for every type and size organization. So we set out to study how controllers and corporate accounting and finance executives, how their roles have changed. So last fall, we surveyed some 300 plus executives and their results are published in a study that's available at Controllers Council’s Resources tab. And if you're going there, that is available.

Andrew Gertz: Fantastic. yeah. And so, as I mentioned, I'm really excited to get a chance to talk with you about that study and the work that you're doing there. So let's dive right in. So obviously, elephant in the room is always COVID-19, let's talk about the ripple effects of COVID-19 a little bit and what your study revealed. When you did this study, how did the responsibilities of controllers and CFOs change last year and what would you say were the primary drivers of that change?

Neil Brown: Yeah. Great question. Let me answer the second part first about the drivers. These were macroeconomic forces. Not only the global pandemic, but a recession for many industries – not all but many. And last but not least, in the US, a very divisive election as well. So there's really three major macro forces happening. So that's led to responsibilities changing. And so that's what we set out to capture. The biggest takeaway we had was a majority (73%) of both controllers and CFOs took on an increased responsibility. So that's nearly three out of four.

Andrew Gertz: Yeah, I mean, everybody's plates seem to be filled more these days. So what were some of those responsibilities that the controllers and CFOs found added to their role?

Neil Brown: Sure. Well, not surprisingly, managing a remote workforce was number one and that was 71% of the blended responses. And that was followed by another – well, that might not be that surprising, cost reduction. So seeing an impending recession, finance professionals set out to reduce costs where they could. And then the third major change was or addition was crisis management. None of these are a surprise, really, but the results are reinforcing.

Andrew Gertz: Yeah. I think that’s interesting even if it doesn't surprise people. But you mentioned some challenges like remote work and trying to control costs – trying to deal with that during a pandemic, it can't be an easy task. So anecdotally or qualitatively there, what impresses you most about how controllers and CFOs responded and adapted to all the changes that they've been contending with?

Neil Brown: Well, yeah, so the first thing I wanted to point out with that was that before the pandemic, corporate accounting, corporate finance was already evolving and has been evolving for three years. But clearly, what I call the big three macro forces – COVID, recession, election – those forces hasten the pace of change. And I believe that's where the biggest thing that came out of this is that this change elevated the title and the role of corporate accounting and finance.

Andrew Gertz: That's an interesting take on it for sure. And I definitely have to agree with you. So on that topic, like we've been talking about here a little bit, the study included controllers, CFOs and other accounting and finance professionals. Where did you see overlap in what controllers and CFOs experienced as a result of COVID-19? What were the similarities there?

Neil Brown: Yeah. Well, I'll go back to that earlier question where they overlapped that increased responsibility at 71%, that was certainly an overlap. But then if we drill down further, we find that overlaps are in a FP&A (financial planning and analysis) and then financial management. So those were roles that were shared by both those titles, both those two groups. And we even had comments from CFOs and controllers where they might've done financial planning once a month, they were now doing it once a week or even daily. So you can see how this has really changed that.

The other key overlap, is in what controllers and CFOs supervise. And in both cases, both titles supervise accounts receivable and accounts payables. So it was not their primary responsibility, but it was staff that they supervise.

Andrew Gertz: Yeah. Interesting overlaps there. On the other side of that coin, where did you see the perspectives of these two groups differ? Where did they branch off from each other?

Neil Brown: Yeah. Well, controllers it turns out the survey indicated that they were primarily responsible for bookkeeping and financial reporting. So still responsible for that. And the CFO's primary responsibility was corporate strategy. So those were some differences.

Andrew Gertz: So taking on that strategic role and then trying to put out fires there. Yeah. Okay. It makes sense. So let's shift gears a little bit there. So we've been talking about what they experienced and how they have been informed by those experiences during the pandemic. Let's talk about what's on the horizon. How do controllers and CFOs envision their roles evolving in the future?

Neil Brown: Again, that word FP&A, that acronym for financial planning and analysis, a number one for both controllers and CFOs. So they are not planning monthly, they are planning weekly, they're planning daily. They are apparently obsessing over financial planning and analysis. So that was number one.

Corporate strategy, we mentioned with CFO, but it also percolated up for future roles for the controller as controllers and CFO look at corporate strategy. And you're going to like this, the number three on the list, risk management, which is Euler Hermes. So risk management ended up being one of those big three. And then that is rounded out by technology leadership, technology management.

So we know that controllers and CFOs have always had a role in technology spend and budgeting, right? They have a growing role now in direct management and supervision. And I think a part of that is because one of those other factors – remote workforce – is requiring the back office to be more automated because there is no staff at all working at the HQ for checks manually and things like that. They're automating those types of processes.

Andrew Gertz: You talked about weekly, if not daily financial analysis being crucial right now. Trying to balance all of these things, of understanding the data and what's going on and where the business is positioned, and at the same time, empowering the business, that's a very interesting line to have to walk. So it's interesting that the same people have to be in the weeds and then also be strategic thinkers all at the same time.

So there's a lot of topics covered in The Contemporary Controller study. And obviously, we encourage people to go to controllerscouncil.org to go check out the report in the Resources section. As we kind of wrap up our talk about the report here, what's a change or a trend that stands out to you most when you're looking across all the findings of the research? Is there anything that really speaks to you?

Neil Brown: Yeah. And I think it's more reinforcing some things we talked about earlier that both roles are evolving. They’re evolving from financial reporting and financial management to the more strategic roles. I think the roles are becoming more important. They're elevating in the organization. And then I believe that in the future, we are going to see more CEOs that came from corporate finance and corporate accounting, the controller track and CFO. And that will happen at a much greater percentage than it is now. Arguably now, it's probably significant, but it's been a growing signal.

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