I was reflecting on all of the changes taking place in the world – Brexit, the U.S. election, countries in the European Union becoming increasingly nationalistic – and trying to put it into context of my work as a CFO. Seeing the effort caused by sudden changes in the political and/or regulatory landscape recently, I was struck by a few things I thought I’d share with you.
Business always has its challenges – competition, regulations, economic ups and downs – this is standard. With the introduction of the type of software we specialize in, the speed of business has changed dramatically, and it’s something we’ve regularly helped customers with to gain insights and make decisions to adjust to market changes. We can run businesses live with today’s technology and software.
What hadn’t seemed to change as fast, however, was politics. Now that seems to be speeding up as well, with new legislation making an enormous impact on business taking place at an unprecedented pace. For the first time I’m seeing how increasingly difficult it’s becoming for us to conduct standard business when politics are shaking things up.
From Brexit to sanctions against Russia and vice versa, to an increase in terrorist attacks in Western Europe – conducting business is becoming increasingly difficult for all of us in the business community. Commitments are made, then a quick political decision is made and the commitments are overnight in jeopardy. Free trade and its evolution are coming into question at the same time. This is really a tricky time in business, an important time for CFOs to take a view on risk management and business continuity.
And as we try to enable the speed of modern business, regulations from governments can introduce further hurdles. For instance, a colleague told me that the transfer-pricing documents we’ve created for Russian authorities have 4,000 pages, and these documents are manually created. All the paperwork sent to customers in the market measures 19 meters high each year – the equivalent height of the Kremlin wall in Moscow. We’re back to macro/micro economics 101, and not all of our challenges arise from the digital economy itself.
With so much insecurity growing around the world, a CFO’s role becomes ever more complex and important. Our perspective, offering risk analysis scenarios and point of view, helping business leaders to see a bigger picture as a well-received discussion partner, is more important than ever. We need to rise to the challenge and in turn, take a broader and deeper view of the world and understand new and emerging trade agreements. We need to throw our integrity, authority, and independence into the discussion to make sense of and shape the world including, but not limited to, the regulatory environment. We need to stay engaged and throw our full professional weight against these challenges. This includes listening and talking to each other to share views, discuss matters at hand, and identify best practices.
To continue the discussion on the pivotal role CFOs can play in helping their organizations with instant financial insights for decisions in the moment and the foresight to predict what’s next, check out Live Business Technology and The Boardroom of the Future.