Mark Freebairn 2 Jun 2017 10:30am

Career clinic: how finance professionals step up to the plate on accountability

Mark Freebairn celebrates the fact that finance professionals are judged on very high standards

How is it right that the finance community is held to a greater level of accountability and integrity than the president of the United States? Or the prime minister? Just to be clear, I am not making the point that CFOs shouldn’t be held to that level of accountability. More that the same isn’t expected of the people who are bidding to be in control of our lives and national destinies.

The only thing someone starting in their career in the finance function has to offer the market is their guarantee of honesty and integrity. As you develop so do your skills – but while they can wax and wane the above guarantee must not.

Compare the reactions to driving around the country with a lie on a bus, or announcing that there would be an emergency Budget post-Brexit, with the reaction to a CFO who stood up and announced they would quadruple earnings and within months said “what – you believed me?”. They would be out of the business faster than someone could call me to find a replacement.

That CFOs are held to greater levels of accountability than politicians is sadly true. And it is vital that the finance community recognise and embrace this. Because whatever the leaders of the free world can get away with, you can’t. Our pensions are invested in many of your businesses and people sell and buy your shares on the basis of the information the finance function produces.

So of course it’s right that the world should expect accurate and truthful financial information.

If you really could promise to deliver quadrupled earnings next year and then laugh when you don’t, the world would be in a serious mess. I’ll leave you to fill in the punchline.But that also means that if you promise one thing and don’t deliver it you have a substantial issue. Because for the same reason that if you saw another bus with a slogan on it you might not believe it so readily, if you are a CFO who isn’t trusted you simply can’t do your job any longer.

And that leads in a roundabout way to my central point. Your ability to predict future performance against a backdrop in which decisions have a global impact is as challenging now as I have seen at any time. If not more challenging. Yet the market expects you to be as precise as you would be in calm, benign times. And whacks you harder if you miss the numbers you tried to predict six to 12 months earlier.

Those two facts pose a conundrum, and it’s one the finance community is working ever harder to answer. And the answer may well be that if you can’t predict the number, don’t promise it.