CFO Imperative Series

Critical answers and actions to reframe your future

How can corporate reporting connect

your business to its true value?
Combining data and enhanced human insight through technology
to reveal the full potential of corporate reporting

Financial Accounting Advisory Services (FAAS) | 7th Global Corporate Reporting Survey | February 2021
About the research Contents

More than 1,000 chief financial officers (CFOs) and financial Foreword 3
controllers of large organizations were surveyed to understand
the challenges they face in corporate reporting. The research 1 A new reality for reporting 4
was conducted by Longitude on behalf of the EY Global Financial
Accounting Advisory Services (FAAS). 2 Reframing the role of reporting 8

Half the respondents (50%) were from the CFO community, with 3 Reinventing how finance
more than one-third (35%) representing financial controllers. The and reporting are delivered 12
remaining 15% were finance directors or leaders in the treasury
function. A majority (62%) of the respondents’ organizations have The way forward 16
revenues in excess of US$5b a year, and 10% in excess of US$20b
a year. Respondents were split across the Americas; Asia-Pacific;
Key findings by market 18
and Europe, the Middle East, India and Africa (EMEIA). Thirteen
main sectors were represented, with 56% of companies being
publicly held or listed and 44% privately owned.

The survey was supplemented by in-depth interviews with the

following CFOs and finance leaders:

Kazuko Kimiwada
Senior Vice President, Head of Accounting Unit, SoftBank
Group Corp.

Christine Rankin
Senior Vice President, Corporate Control, and Principal
Accounting Officer, Veoneer

Sundeep Reddy
Senior Vice President, Controller & Chief Accounting Officer,
McKesson

Marc Rivers
CFO, Fonterra

Niclas Rosenlew
CFO, SKF

The EY Global FAAS Team would like to thank everyone who

contributed their insights and knowledge to this report.

2 How can corporate reporting connect your business to its true value?
Foreword

The COVID-19 pandemic has had a significant humanitarian and economic impact, and countries around the
world continue to contend with the implications. During this disrupted, uncertain and anxious time, it has become
even more important that organizations use their corporate reporting to explain how they are navigating through
the turbulence. The senior finance leaders and organizations that EY teams work with have shown significant
resilience and fortitude, in terms of how they have shifted to a virtual operating model and are providing the
insight that stakeholders are looking for, to steer them through an uncharted future.

Leading organizations and finance executives have demonstrated their ability to maintain a critical balance:
responding to the short-term crisis with resilience, while retaining focus on long-term results and sustainable
growth. This means avoiding short-term thinking and generating long-term value for multiple stakeholders
— shareholders, employees, customers, communities and other parties — with a focus not only on financial
outcomes, but also environmental and social impacts. If finance fails to play a central role in meeting the changing
expectations of investors, regulators and other stakeholders, reporting could become increasingly irrelevant.
However, too many finance functions are on the back foot when it comes to meeting this shift in reporting and
transparency expectations, simply waiting for legislation to emerge that will make it a mandatory requirement.

There are two priorities for finance executives who want to be seen as leaders in this area. First, they should
rethink the role that reporting plays in enterprise value. As well as a focus on financial reporting excellence, this
means meeting demands for nonfinancial information, with business models increasingly exposed to social and
environmental issues. Second, finance leaders should take a fresh look at how finance and reporting are delivered.
This means challenging themselves to think about what finance and reporting could look like in the future and
being prepared to disrupt the status quo. Building trust into artificial intelligence (AI) and other technologies,
transforming the finance and reporting operating model, and rethinking leadership roles and the future finance
talent strategy are expected to be critical aspects.

Failing to drive change in how organizations report enterprise value could have significant implications. Unless
companies report on increasingly important intangible assets, such as intellectual property (IP) and human
capital, investors will develop their own approaches and data sources to assess that value, essentially removing
the reporting “narrative” from the companies’ control. Organizations could also struggle to outline how their
environmental and social activities impact society, and contribute to the overall growth and prosperity of
the world, which can be critical to rebuilding trust with a wider group of stakeholders, including customers
and communities. Finally, it could make it difficult for companies to really engage with investors — building
transparency about the organization’s long-term strategy and meeting investors’ expectations in terms of
reporting disclosures.

This significant shift in approach is the theme of this latest report, which builds on research that the EY Global
FAAS team has conducted annually since 2014, examining a range of areas from finance talent, to the need for
a reporting culture based on openness, authenticity and accountability.1 Today’s agenda is about how to map
out a rethink of how finance and reporting are to be delivered, not just in the near-term future, but in 2023 and
beyond. These insights form part of our CFO Imperative Series, which provides critical answers and insights to
help finance leaders reframe the future of their organization. For more insights for CFOs, visit ey.com/CFO.

All of us have been challenged by the COVID-19 pandemic. We have moved from a world where the role of offices
and physical work spaces have been upended, and where finance is more defined by the skills it possesses and the
agility of its technology. But this is also an exciting time to accelerate the transformation of corporate reporting
and how it is provided.

Tim Gordon
EY Global FAAS Leader

1
Connected reporting: responding to complexity and rising stakeholder demands, EY, 2014; Are you prepared for corporate
reporting’s perfect storm?, EY, 2015; How can reporting catch up with an accelerating world?, EY, 2016; Can innovative
corporate reporting build trust in a volatile world?, EY, 2017; How can the digital transformation of reporting build the bridge
between trust and long-term value?, EY, 2018; Does corporate reporting need a culture shock? Meeting the transparency
expectations of investors and other stakeholders, EY, 2019.

How can corporate reporting connect your business to its true value? 3
1

A new reality
for reporting

4 How can corporate reporting connect your business to its true value?
 1. A new reality for reporting

Corporate reporting is playing

an important role in providing
leadership teams with the insight
they are seeking to navigate
through the current turbulence

Finance and reporting are at the heart of how organizations are a successful transition to the new operating reality demanded by
responding to the COVID-19 pandemic. Corporate reporting is the COVID-19 pandemic and its ongoing implications. The 2020
playing an important role in providing leadership teams with EY corporate reporting survey shows that most finance leaders
the insight they are seeking to navigate through the current believe their teams have made a successful transition to a virtual
turbulence. It also provides the reassurance and insight that key working environment (see figure 1).
stakeholders — such as investors — are looking for in, what is, a
time of great volatility and uncertainty. However, reporting only
has the potential to play a critical role, if finance teams have made

Figure 1. Percentage of respondents who are satisfied with the transition to a new operating reality, in the following areas
Question: How satisfied are you with the following aspects of how your finance function is responding to the ongoing
COVID-19 crisis?

The shift to alternative working arrangements — such as

71%
remote working — for finance staff

Teamwork and collaboration across a dispersed

69%
finance team

The ability to access finance and reporting data to

support key crisis communications as well as the needs of 69%
management teams and boards

The continued effectiveness of finance and reporting

69%
controls in a virtual environment

The personal resilience o the finance team in the face of

67%
COVID-19 and lockdown restrictions

Note: respondents who answered “satisfied” or “very satisfied.”

How can corporate reporting connect your business to its true value? 5
1. A new reality for reporting

The challenges of systems deployment and onboarding in a virtual world

The head of accounting at a supermarket chain, which has operations across Europe and North America, pointed out that
virtual working can be challenging when it comes to areas like systems transformation and onboarding new talent. “We had
started a big, state-of-the-art ERP implementation and now this has to be done completely on a remote basis,” he explains.
“This has its challenges, because usually you get the different teams together so that everyone can get to know each other a
little bit better. And, if you have a face-to-face meeting, you get direct feedback. Likewise, if you are presenting, you can really
look people in the eye to keep them engaged.”

“I also gained five new team members during this pandemic and all onboarding within the accounting team has moved to online
from in-person. It is quite a big difference to meet people in-person versus via telephone or virtual. It can also be particularly
challenging when you are onboarding with other departments outside of accounting, where you are often looking for
information or support. Also, with home-working, there is not the opportunity to meet new colleagues in person at the coffee
machine or over lunch.”

Christine Rankin, Senior Vice President, Corporate Control,

and Principal Accounting Officer at Veoneer — an automotive
technology company with operations across the Americas,
Europe and Asia-Pacific — points out that, while finance
processes have transitioned smoothly to a new virtual reality, 51%
wider change management and transformation projects can
benefit from people being able to physically meet rather
than working remotely. “When you are in the middle of a big
change management initiative — such as an enterprise resource
Half of respondents said “finance team members have
planning (ERP) implementation — it does not always go at the
sometimes failed to adopt new processes, reverting to traditional
required speed when you’re working over digital,” she says.
ways of doing things.”
“I would say that it can be more effective to actually sit around
the table. While virtual can work well for informative meetings,
it does have some restrictions when it comes to the creative The dangers of reverting to old ways of working, and failing
and development discussions involved in large-scale change to pay enough attention to the future, can be significant. For
management.” example, finance teams could become less relevant and agile.
This could impact their ability to provide the wide-ranging and
While finance teams appear to have demonstrated significant
forward-looking insight stakeholders want. They could also
resilience in the current environment, finance leaders should
find their operating model too big and cumbersome to provide
think about what the long-term future could look like and how
what is expected by the business, with the speed and flexibility
they can overcome resistance to bring their people on the
necessary. Indeed, the demand for CFOs and other finance
transformation journey needed. In the research, more than half
leaders to adjust to changing demands sits at the heart of our
of the respondents (56%) said “there has been resistance to
CFO Imperative Series, which identifies critical answers and
some of the changes we have had to introduce”. And, 51% said
actions to help leaders reframe the future of their organizations.
“finance team members have sometimes failed to adopt new
processes, reverting to traditional ways of doing things”. There are two priorities to focus on to build a bold new future for
finance and reporting, which can be characterized as the “what”
and the “how”:

• The what: shifting what reporting encompasses and its role

— providing new insight “beyond the numbers” of financial
56% reporting and help reporting provides the long-term value
creation stakeholders are demanding.

• The how: changing how organizations provide reporting,

with a particular focus on accelerating the deployment of
trusted AI, transforming the finance and reporting operating
More than half of the respondents said “there has been model, and rethinking key leadership and team roles.
resistance to some of the changes we have had to introduce.”
We look at these areas in more detail in the two sections
that follow.

6 How can corporate reporting connect your business to its true value?
 Transform reporting
to provide new insight
“beyond the numbers”
and help to provide
the long-term value
stakeholders are
demanding

How can corporate reporting connect your business to its true value? 7
2

Reframing the
role of reporting

8 How can corporate reporting connect your business to its true value?
 2. Reframing the role of reporting

66% of respondents say demand for

“forward-looking financial analyses
and forecasts” has increased over
the last 12-months

Today, CFOs can have wide-ranging mandates and responsibilities. over the last 12-months. Stakeholders are also looking for new
While they should protect enterprise value, they can also play a insight “beyond the numbers” of financial reporting, such as
critical role in optimizing and growing value. However, corporate environmental, social and governance (ESG) data.
reporting — given its focus on backward-looking, financial
performance information — has historically been weighted toward
just one of those mandates — protecting value. Reporting should “Increasingly, companies are talking about their social
evolve to more fully embrace growing and optimizing value. There responsibility and where they stand on certain issues, whether
are two areas that could be important to delivering on this wider it’s the environment or social justice. So, where does finance
remit: play a part in that? I can certainly see us as facilitators and
messengers, ensuring messaging across the business is
1. Meeting the increasing and wide-ranging insight connected and coalesces. And, if controls are needed on
requirements of stakeholders areas like sustainability, human capital or social responsibility
reporting, that finance is tapped because of our best-in-class
In times of crisis, the demand for insight — to seize an element of
knowledge on internal controls, and that we’re asked to
control in a volatile and fast-changing environment — increases.
monitor those reporting exercises within the company.”
The research shows that finance is bearing the brunt of increased
demands for rich and varied information and insight. As figure Sundeep Reddy, Senior Vice President, Controller & Chief
2 shows, two-thirds of respondents (66%) say demand for Accounting Officer, McKesson
“forward-looking financial analyses and forecasts” has increased

Figure 2. Percentage of respondents who say demand for data — and different types of insight — has accelerated,
in the following areas

Question: Thinking about the demand on finance teams for data-driven analyses and information, to what extent has demand
increased or decreased in the following areas over the past 12-months?

Forward-looking financial analyses and forecasts 66%

Governance, risk and compliance insights 62%

Customer insights 61%

Near-real-time financial performance reporting 61%

Geopolitical data and insight 57%

Competitor information 57%

Nonfinancial or ESG performance information 55%

Note: respondents who answered “demand has increased” or “demand has increased significantly.”

How can corporate reporting connect your business to its true value? 9
2. Reframing the role of reporting

Across-the-board increased demand for insight is confirmed by SoftBank Group’s accounting unit focused on investors’
Niclas Rosenlew, CFO of SKF, a Swedish-based manufacturer needs and reporting transparency
founded in 1907. “With the extreme increase in levels of
uncertainty that we have seen this year, there’s suddenly been SoftBank Group, the Japanese multinational, has achieved
major demands on finding the information you need to really worldwide recognition as a result of its focus on investing in
understand what’s happening,” he says. “This is in terms of how digital innovation. For Kazuko Kimiwada, Senior Vice President,
our business is affected in terms of the numbers and how we can Head of Accounting Unit, SoftBank Group Corp., this emphasis
undertake multiple scenario analysis. Of course, it has to be done on investment and complex transactions means that her team
immediately and demand is also coming from multiple sources: is very much focused on financial reporting and the needs of
investors, management leaders across the business, and also investors as a critical stakeholder. “Three years ago, the main
regulators.” focus of SoftBank was telecommunications, with a more limited
focus on investment,” she explains. “Today, SoftBank Group is
While demand may have accelerated as a result of the COVID-19 an investment company. So, today, my team is very focused on
pandemic, it is unlikely to decline once the crisis is over. financial reporting, because these disclosures are so critical to
Senior leadership, such as CEOs, are likely to expect increased the outside investment.”
visibility and the development of advanced dashboards that
provide dynamic analyses of financial performance, operating As part of this focus on delivering the information that
performance and changing market conditions. investors want, Kazuko Kimiwada sees giving these
stakeholders the transparent and understandable disclosures
2. Making corporate reporting central to turning long-term they need as her “critical mission”. “We follow the IFRS
value ambitions into reality standards, which can be complex, and it can sometimes be
difficult for investors to understand a company’s disclosures,”
In the coming years, finance and reporting should look to play she says. “It’s therefore a critical mission for me to increase
the leading role in redefining what constitutes organizational transparency for our investors and to ensure our financial
performance and value. Stakeholders, such as investors, are statements are straightforward, understandable and relevant
looking to organizations to adopt a longer-term perspective for investors.”
and focus on long-term value creation. The research shows that
many CFOs and financial controllers are embracing this shift to a
long-term value strategy: 69% of respondents say that “CFOs and The shift to a long-term value orientation presents a significant
senior finance leaders are increasingly seen by key stakeholders challenge for finance leaders, who are expected to drive
as the stewards of long-term value.” excellence in financial reporting, while also responding to
increasing demands for credible and trusted nonfinancial
reporting. Over the recent years, CFOs have had to contend
with a wave of regulatory-driven changes to financial reporting
requirements, investing significant time and effort into meeting
new accounting standards. Now, demand for nonfinancial

10 How can corporate reporting connect your business to its true value?
 2. Reframing the role of reporting

information, including ESG and sustainability reporting, is “I think we’re starting to think much more holistically about
growing, as investors seek insight into the impact of social and how we measure things, which, I think, is positive. For example,
environmental issues on business models. thinking holistically about the inputs that go into producing a set
of outputs, which is ultimately what productivity is. What are the
For Leo van der Tas, EY Global IFRS Services Leader, companies sources of capital that are used to produce things? As well as
will increasingly see requirements for nonfinancial reporting financial capital, we are using environmental capital and we’re
growing as this domain becomes as demanding and as highly using people capital. So it makes sense to try to get your arms
scrutinized as financial reporting. “Nonfinancial reporting has around measuring that, so you have a complete picture of total
been around for many years, going right back to the Global inputs and a holistic view on the outputs. It’s not just sales and
Reporting Initiative,” he explains. “But over the last one or two profit, it’s also the benefit that are we providing to society. For
years, it has become exponentially more important, driven by example, what we pay farmers, as our suppliers, is a benefit that
investors as well as other stakeholders. That has led to a number goes straight into the rural economies and helps address a major
of initiatives recently that will change the rules significantly, problem for the world: the urban-rural divide.”
including for the finance function. In particular, those involved in
sustainability standard-setting have started to cooperate with the In the research, finance leaders identified a number of roadblocks
IFRS Foundation. This is supported by the securities regulators, that could stand in the way of measuring and communicating
as well as investors and groups of preparers, because it is seen to long-term value. One of the critical factors that emerged was
at least set a path to a global set of standards that are acceptable “the absence of formal reporting frameworks that show how the
not just for capital markets, but also more broadly.” connection between tangible and intangible assets contributes to
long-term value creation”, which was selected by close to one-in-
This increasing focus by investors on high-quality nonfinancial five respondents as the most critical challenge in their view (17%).
information is reinforced by the research, where 65% of One initiative that can help companies to address this issue — the
respondents said there “is significant value for our organization requirement for a reporting framework that embraces intangible
that is not measured or communicated using traditional financial assets — is the “Sustainable Value Creation” initiative led by
KPIs, such as brand value and human capital”. However, only the International Business Council (IBC) of the World Economic
48% of respondents said their organization has made “significant Forum (WEF). EY teams contributed to this initiative, which aims
progress” in measuring and communicating human capital. to develop a common, core set of metrics and recommended
disclosures that corporates can use to report the shared and
For Marc Rivers, CFO of Fonterra, a global dairy nutrition company
sustainable value they create. The WEF’s 2020 white paper
based in New Zealand, and the world’s largest dairy exporter,
outlined consistent metrics under four ESG pillars: principles
a key role for finance in nonfinancial reporting areas, such as
of governance, planet, people and prosperity.2
sustainability, is directly in line with the function’s purpose and
capabilities. “If you take a broader view of the role of finance, its
purpose is about bringing transparency in a rigorous and reliable
way — shining a light on the reality of things,” he says. “That’s so
important because that’s what builds trust with stakeholders.”
2
Measuring Stakeholder Capitalism: Towards Common Metrics and Consistent Reporting of
Sustainable Value Creation, WEF, 2020.

How can corporate reporting connect your business to its true value? 11
3

Reinventing how
finance and reporting
are delivered
12 How can corporate reporting connect your business to its true value?
 3. Reinventing how finance and reporting are delivered

Building trust in AI is difficult in

an environment where governance,
controls, ethical frameworks and
regulations still struggle to keep
up with the pace of change in
cognitive computing

To provide a new future for reporting, finance leaders should stop Without those frameworks, finance leaders are concerned
thinking in a linear way about how they go from where they are about the risk implications of AI: 63% of respondents said that
now to where they are trying to get to next. Instead, they should they “have concerns about the risks of using AI in finance and
take a future-back approach and look beyond the “now” and the reporting, from security threats to regulatory risk”. And, matters
“next”. This means mapping out what the finance organization have not improved when compared with the 64% of respondents
could look like in the future and what roles and skills might who said the same in the 2019 research.3 At the same time,
be required. Unless you do this, you are unlikely to challenge many respondents do not have complete trust in the output of
yourself to think exponentially or disruptively about what finance these systems: 47% said that “the quality of the finance data
and reporting could look like. As a result, the ties of legacy produced by AI cannot be trusted in the same way as data from
infrastructure and traditional ways of working could keep you our usual finance systems”. While this is an improvement from
anchored in the past. There are three areas to focus on: 2019, when more respondents (55%) felt they could not trust AI
outputs in the same way as existing finance system outputs, it is
1. Building trust into technology and accelerating the still close to half of respondents who are still unsure.
deployment of trusted AI
It is clear that a lack of trust in AI outputs is an issue for a number
Building trust in AI is difficult in an environment where of respondents. However, these reservations could be more of a
governance, controls, ethical frameworks and regulations reflection of the lack of understanding of how these systems work.
still struggle to keep up with the pace of change in cognitive An alternative view is that AI and machine learning can potentially
computing. More than two-thirds of respondents (68%) say that increase the credibility and accuracy of insights rather than
“governance, controls and ethical frameworks still need to be detract from them. This rigor is due to the fact that they arrive at
developed and refined for AI”. conclusions based on a larger number of data sets, rather than an

Figure 3. AI is outrunning the development of ethical, governance and regulatory frameworks

Question: Thinking about the challenges to trusting in the data outputs of AI systems, please state whether you agree or
disagree with the following statements

Developments in AI move so quickly that governance and

69%
controls will need to be much more agile

Governance, controls and ethical frameworks still needs to

68%
be developed and refined for AI

The global regulatory environment has not yet caught up 60%

with developments in AI

3
Does corporate reporting need a culture shock? Meeting the transparency expectations of
investors and other stakeholders, EY, 2019.

How can corporate reporting connect your business to its true value? 13
3. Reinventing how finance and reporting are delivered

individual probing a single set of data and potentially introducing the technologies are closely inter-related. The “cloud” represents
their own biases into the equation. It is therefore likely that smart more than just space for high volumes of data. AI involves huge
machines could actually undertake data-driven tasks with greater processing capabilities and the “cloud” is the infrastructure that
accuracy, consistency and time efficiency than humans. makes it possible. AI, in turn, then plays a critical role in advanced
analytics, allowing finance to derive insights by simulating aspects
2. Transforming the finance and reporting operating model of human intelligence and analyzing vast amounts of data.
The research shows that finance leaders anticipate their function 3. Rethinking leadership roles
to look very different in the future, with a major shift to a smarter,
more open finance operating model: 53% of respondents think it In the future, CFOs and financial controllers recognize their roles
is “likely” that more than half of the finance and reporting tasks are likely to evolve significantly:
currently performed by people will be performed by bots over the
next three years, with 24% thinking it is “very likely”. Similarly, • Two-thirds (67%) of respondents said that “CFOs will spend
54% think it is “likely” that blockchain-based systems will underpin less time on traditional finance responsibilities and more
finance (28% think it is “very likely”). As finance leaders look to time on driving enterprise-wide digital transformation and
reinvent the finance operating model for the future, there are a growth.”
number of priorities:
• Two-thirds (66%) of respondents said that “financial
Priority one: define a provider or managed services strategy controllers will increasingly take on more of the CFO’s finance
to achieve transformational goals. As the research has responsibilities, as CFOs focus on new mandates.”
demonstrated, finance teams face significant complexity and
The 2020 EY DNA of the CFO survey identified that this will
business-as-usual demands. This means they could struggle to
likely require significant changes to the responsibilities and skills
meet new demands and challenges because of the distraction
of the CFO role to succeed. Building strong relationships with
and weight of legacy responsibilities and complexities, the likely
fellow C-suite leaders will likely be an important success factor,
requirement to transform finance technology, and the challenges
but the DNA of the CFO study found significant concerns about
of finding the right talent to deliver against new mandates.
the current state of these relationships. For example, 52% of
Rather than outsourcing — which tends to be cost-focused —
respondents reported limited or no collaboration with the chief
managed services offers access to deep domain subject matter
human resources officer (CHRO).4
professionals in finance as well as state-of-the-art technology.
In the next-generation operating model, many process-driven,
regulatory and other reporting activities could potentially not be
handled in-house, but be taken on by subject matter professionals
and accredited providers. This is a strategy focused on quality
rather than cost. Finance teams gain access to IP and advanced
technologies, and the finance team can then focus their time on
67%
key value creation and business provider activities.

Priority two: tackling legacy IT and taking finance and

reporting into the “cloud”. For many finance functions, legacy Two-thirds of respondents said “CFOs will spend less time on
IT infrastructure can be a burden. It can often be too expensive to traditional finance responsibilities and more time on driving
overhaul, but also costly to maintain. Continued upgrades to enterprise-wide digital transformation and growth.”
the infrastructure could make it difficult to keep up with current
demands, making it time-consuming for the finance function to
do its job and add value. In particular, meeting increased demands
for data insight will likely require an accelerated transformation
of finance systems. The research asked finance leaders to
identify which technologies they were particularly focused on
for accelerated adoption over the next 12 months. They were
66%
also asked to identify which technologies would be the primary
focus of investment over the next three years. Regardless of the
near- or long-term horizon — in terms of accelerated adoption or
investment focus — “cloud” solutions were the primary focus, with Two-thirds of respondents said “financial controllers will
advanced analytics and AI also major priorities. The overall focus increasingly take on more of the CFO’s finance responsibilities,
on a triad of “cloud” solutions, analytics and AI makes sense, as as CFOs focus on new mandates.”

How can the CFO evolve today to reframe finance for tomorrow?, EY, 2020.
4

14 How can corporate reporting connect your business to its true value?
 Meeting increased
demands for data
insight is likely to
require an accelerated
transformation of finance
systems that integrates
trusted technologies
including “cloud” solutions,
analytics and AI

How can corporate reporting connect your business to its true value? 15
The way forward

16 How can corporate reporting connect your business to its true value?
 The way forward

Finance should look to play

a central role in instilling
discipline into nonfinancial
reporting processes and controls
to build confidence and trust

There are three action areas that will likely be important to with, and understanding, the needs of stakeholders — particularly
providing a new future and continued relevance for finance and investors — and translating that into relevant and material
corporate reporting: metrics and disclosures. Finance should look to play a central
role in instilling discipline into nonfinancial reporting processes
Accelerating the digitization of finance and building trust into and controls to build confidence and trust. Establishing effective
AI and other smart technologies governance practices — and seeking independent assurance over
nonfinancial processes, controls and data outputs — will likely
For many finance functions, the COVID-19 pandemic-induced
help to build trust and transparency with stakeholders. CFOs and
move to a virtual operating model has accelerated the digitization
financial controllers — whose teams have extensive experience
of the function and shown the way forward to a more agile,
in establishing processes, controls, and assurance of financial
machine-powered future where digitally-savvy people and
information — can bring their financial leading practices and
smart machines provide the reporting insight that stakeholders
experience to bear on sustainability and ESG reporting.
want. However, the research has also shown that building trust
into finance technologies, particularly AI, will likely be critical. Defining a talent strategy that focuses on reskilling employees
This is because the survey shows there is still some concern for a very different future
on the part of finance leaders about introducing new risks with
these systems, and there are some who are not yet prepared to Like many functions, finance faces a significant skills gap in terms
trust the outputs of machine intelligence. As a starting point, of the people and experience it is likely to require to provide the
finance leaders should build a clear picture of the new risks that new future for reporting. Finance leaders should therefore take
could emerge in an AI-powered finance function, from whether an assertive and innovative approach to reskilling their people, to
algorithms reflect any biases that could skew results, to legal risks equip them with the capabilities they are likely to require in the
and liabilities. To build trust in AI, finance leaders should define a future finance function. In a market where many finance functions
clear approach to governance and ethics. Ethical principles around could be chasing the same sorts of skills, and where demand
the transparency of AI should be codified, lines of accountability will likely outstrip supply, it is increasingly necessary — and even
should be formalized, and policies and procedures put in place cost-effective — to future-proof core elements of the current
for regular reviews and ongoing risk assessments. Ensuring finance workforce. Important actions could include undertaking
finance employees have the resources and training required to a gap assessment of existing staff skillsets and developing new
use these systems appropriately will likely be important, as well as incentives to encourage the finance workforce to learn new skills.
consulting with policymakers to understand how emerging ethical But as well as a leading learning experience, finance leaders
principles could influence AI regulatory developments. should look to develop a culture of continuous learning. This is
because in an environment where skills should keep pace with
Putting finance at the heart of sustainability and ESG developments in technology, finance people should look to
reporting have the desire and ability to grow and adapt their skills to that
environment.
As sustainability and ESG reporting become ever more
important to how organizations measure and communicate
value creation, the success of nonfinancial reporting is likely to
depend on how relevant it is to stakeholders, how trusted and
credible it is, and how clear the link is between financial and
nonfinancial information. This begins with finance engaging

How can corporate reporting connect your business to its true value? 17
Key findings by market

Combining data and enhanced human insight through technology to reveal the full potential of corporate reporting

Finance teams are CFOs and senior finance There is significant value Developments in
increasingly expected leaders are increasingly for the organization AI move so quickly
to measure and seen by key stakeholders that is not measured that governance and
communicate how the as the stewards of or communicated using controls will need to be
company creates long- long-term value traditional financial KPIs, much more agile
term value for investors such as brand value and
and other stakeholders human capital

Global 72% 69% 65% 69%

Australia 73% 70% 65% 65%

Belgium 58% 53% 45% 70%

Brazil 85% 83% 71% 56%

Canada 65% 60% 70% 68%

China Mainland 78% 71% 73% 61%

Denmark 63% 63% 45% 80%

France 70% 78% 60% 75%

Germany 63% 70% 58% 70%

Hong Kong SAR 70% 65% 63% 68%

India 85% 88% 78% 63%

Italy 80% 73% 63% 78%

Japan 70% 68% 53% 70%

Mexico 98% 88% 83% 58%

Netherlands 48% 58% 53% 68%

Norway 60% 43% 53% 63%

Poland 78% 78% 73% 68%

Russia 75% 70% 85% 73%

Saudi Arabia 75% 79% 54% 75%

Singapore 85% 68% 63% 70%

South Africa 88% 80% 63% 45%

South Korea 63% 65% 53% 70%

Spain 78% 75% 83% 50%

Sweden 48% 55% 65% 78%

UAE 75% 75% 75% 63%

UK 71% 61% 68% 66%

US 80% 78% 78% 53%

18 How can corporate reporting connect your business to its true value?
 Key findings by market

Governance, We have concerns Audit Committees CFOs will spend less Financial controllers
controls and ethical about the risks of will play an increasing time on traditional will increasingly take
frameworks still need using AI in finance role in understanding finance responsibilities on more of the CFO’s
to be developed and and reporting, from a business’s exposure and more time on driving finance responsibilities,
refined for AI security threats to to technology-driven enterprise-wide digital as CFOs focus on new
regulatory risk disruption and developing transformation and mandates
response strategies growth

68% 63% 68% 67% 66%

60% 75% 73% 68% 63%

73% 58% 55% 53% 60%

68% 63% 83% 66% 78%

80% 65% 75% 73% 60%

68% 81% 68% 81% 66%

78% 83% 63% 65% 48%

65% 75% 60% 63% 63%

58% 68% 73% 55% 70%

68% 70% 65% 65% 65%

63% 54% 78% 76% 81%

70% 83% 65% 68% 75%

75% 73% 63% 68% 58%

60% 55% 85% 70% 85%

75% 73% 58% 60% 48%

60% 68% 50% 53% 53%

60% 60% 65% 73% 80%

70% 65% 63% 88% 73%

67% 67% 75% 54% 71%

73% 75% 80% 73% 75%

55% 53% 85% 78% 60%

78% 90% 50% 70% 55%

65% 68% 88% 65% 78%

80% 60% 55% 53% 48%

56% 63% 69% 63% 81%

76% 76% 71% 66% 61%

68% 65% 65% 63% 65%

How can corporate reporting connect your business to its true value? 19
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