Driving innovation in management accounting | April 2020

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32 STEPS TO ETHICAL 8 20 LEADERSHIP Building an ethical organisation starts at the top. Experts offer advice on how to be an ethical leader.

34 NAVIGATING CHANGE One finance leader offers lessons for change management through his experience with IFRS adoption in Nigeria.

36 LEADERSHIP AT THE NEGOTIATING TABLE A former Deloitte CEO is leading change as the commissioner of the US 20 AVOID THESE Women’s National Basketball 5 LEADING THROUGH 14 ROOTING OUT FORCED DIVERSITY AND Association. DISRUPTION LABOUR FROM SUPPLY INCLUSION MISTAKES CIMA President Amal CHAINS Companies have spent billions 38 LEADING Ratnayake, FCMA, CGMA, says CFOs and finance departments on diversity and inclusion MEANINGFUL CHANGE leaders have to empower and have a significant role to play training, but studies suggest it’s Technology implementations, inspire teams to embrace in preventing and detecting not easy to get it right. Here are diversity and inclusion change. forced labour in their supply five tips to avoid common initiatives, and volunteer chains. mistakes. service can all succeed when 6 3 TRAITS OF passion is combined with SUCCESSFUL FINANCE 24 HELPING DIRECTORS sound business tactics. LEADERS 14 STAY AHEAD OF THE Andrew Harding, FCMA, GAME 40 BUILDING CGMA, chief executive– Corporate boards can follow LEADERSHIP SKILLS Management Accounting at the these five tactics to help THROUGH STRATEGIC Association of International businesses flourish in the face VOLUNTEERING Certified Professional of rapid technological By asking the right questions Accountants, sets out three advances, global competition, before taking a volunteer role, fundamental leadership and fluctuating markets. management accountants can qualities. maximise their contribution 27 DEVELOPING THE and the leadership skills they 8 RIDING THE SUPPLY FINANCE PROFESSION IN gain. AND DEMAND CURVES THAILAND The company behind a new Chakkrit Parapuntakul, the brand of inland surf parks has president of the Thailand global plans that match the Federation of Accounting sport’s rising popularity. Professions, discusses inspiring confidence as a 12 THE TROUBLE WITH leader. TYRES Scrap tyres contain valuable 28 A CHAMPIONSHIP materials that can be CFO’s DATA-DRIVEN extracted for new uses. But LEADERSHIP there’s also demand to turn Evaluating talent and meeting them into cheap fuel through customer preferences are a process that can have among the chief demands of the 40

harmful effects. Super Bowl champions’ CFO. TUNART/ISTOCK; BY PHOTO RIGHT: TOP FROM COUNTERCLOCKWISE PAGE: THIS ON AKINBOSTANCI/ISTOCK; BY IMAGE COVER: THE ON IMAGES WILCOX/AP DALE BY PHOTO JAMESBREY/ISTOCK; BY PHOTO IMAGES; HANSON/AP FIONA BY PHOTO

FM-MAGAZINE.COM April 2020 I FM MAGAZINE I 3 46 USING XBRL AND 52 CONVERTING DATES Print issue changes BIG DATA TO IMPROVE TO AND FROM US FM is now shipped DECISION-MAKING FORMAT IN EXCEL 44 whenever possible without A subsidiary of the China Date format differences plastic wrapping in an National Petroleum Corporation between countries can cause effort to reduce waste. put its data to work through a real problems in spreadsheets, The paper used in FM is familiar platform and made big especially with deadlines. Fix made from wood grown improvements to its budgeting the problem with this Excel in Forest Stewardship and risk management. demonstration. Council-certified forests, recycled material, or 56 INSTITUTE NEWS controlled wood, and the 46 ink is environmentally Get updates on issues affecting responsible. the profession and your membership.

44 YOU DIDN’T GET 58 TEEMING WITH THE PROMOTION. TOURISTS WHAT NOW? Too many tourists can Missing out on new roles and sometimes have a negative responsibilities can be painful, effect. but you can take several steps to improve your chances of getting the next promotion.

CIMA HONORARY OFFICERS United Kingdom The Helicon, One South Place. London EC2M 2RB Amal Ratnayake, FCMA, CGMA Nick Jackson, FCMA, CGMA Tel.: +44 (0)20 8849 2251 President, CIMA Deputy President, CIMA Chair, Association board United States Paul Ash, FCMA, CGMA 220 Leigh Farm Road, Durham, NC 27707-8110 Steven Swientozielskyj, FCMA, CGMA Vice-President, CIMA Tel.: +1 919-402-4500 Immediate Past President, CIMA www.aicpa-cima.com

www.fm-magazine.com Publisher: Kim Nilsen Associate Publisher: Karin DeMarco ([email protected]) CONTACT US Associate Director, Business Development: Shreyas Managing Editor: Rocky S. Rosen Mecheri Editorial inquiries: Assistant Managing Editor: Jeffrey Gilman Advertising Representative: Barbara Kates [email protected] Editorial Director: Ken Tysiac Lead Manager, Magazine Production: Eric Olson +1 919-402-4449 Creative Director: Michael Schad Johnstone Digital Advertising Production Manager: Jason Reese Advertising inquiries: Associate Director: Chris Baysden Digital Marketing Projects Specialist: Colby [email protected] Senior Editors: Drew Adamek, Neil Amato, Jeff Drew, VanVolkenburgh +1 919-490-4324 Megan Julich, Amelia Rasmus, Oliver Rowe, Manager, Ad Sales Marketing: Geoff Jones Delivery inquiries (CIMA members): Courtney Vien, Sabine Vollmer Integrated Content Planning: Dana Spector [email protected] Associate Editor: Alexis See Tho +44 (0)20 8849 2251 Copy Editors: Stacy Chandler, Todd Conard, Pamela Nelson, Melissa Turner Subscriptions: Annual subscription rates for nonmembers: ©2020 Association of International Certified Professional Accountants. All rights £45 (UK), £54 (Europe), £72 (rest of world). reserved. The contents of this publication are subject to worldwide copyright protection, To subscribe, contact: and reproduction in whole or in part, whether mechanical or electronic, is expressly forbidden without the prior written consent of the Association of International Certified [email protected] Professional Accountants. For permission to reprint FM magazine, email

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4 I FM MAGAZINE I April 2020 THE VIEW FROM THE PRESIDENT AMAL RATNAYAKE, FCMA, CGMA

e live in disruptive their goals, success, and prosperity Wtimes, and the constant — as much, if not more, than our state of change is own. It is our responsibility as impacting the finance function. leaders to give back and inspire As the pace of change accelerates, those who come after us. it’s transforming not only our CIMA, through the Association organisations, but also what we do of International Certified and how we do it. Professional Accountants, focuses At CIMA, we believe finance on enabling our global network of professionals must take charge members and students to achieve during this uncertainty. Rather new heights. We have resources, than enduring the turbulence, we learning, and research that finance must stay in the driver’s seat, professionals like you can use to guiding our organisations, become well-rounded leaders. businesses, and communities These include CPD courses on through change. After all, being at Leading through technologies like cryptocurrency the heart of business, we are best and data analytics, human positioned to do so. But to succeed intelligence skills, and other as leaders, we must reimagine the disruption career development essentials. If possibilities for ourselves, our you have the heart, the passion, organisations, and our teams. ‘Leading through disruption isn’t and the drive to lead, we can give Regardless of our level within you the tools to succeed. Because an organisation — whether we’re a easy because change itself at its heart, CIMA is made up of CFO or in an entry-level position is uncomfortable. However, people like you, driven by passion — as part of the finance function, and dedicated to your success. we are leaders and stewards. we have to empower and In my travels as CIMA president Through our skills and adherence inspire our teams to embrace — and even before, as I worked in to ethics, we power trust, countries around the world — I influence decision-making, and it courageously.’ have seen firsthand how CIMA enable organisations to seek and members like you are embracing grasp new opportunities. change and your leadership roles. You are visionaries, Leading through disruption isn’t easy because leading with a boundless passion that drives change itself is uncomfortable. However, we have to everything you do. And it drives my work, too. empower and inspire our teams to embrace it My position with CIMA is powered by passion — for courageously. Sitting back, resting on our laurels, and the work, the profession, and, most importantly, simply hoping we are doing enough will not drive members and students. Helping you succeed has been success in the long run. my focus throughout my presidential year, and it will Of course, this ambition comes with risks, but continue to be central to all I do going forward. gambles are necessary if we want to evolve. Without Soon, I will step down as CIMA president, but this taking calculated risks, we box ourselves into what is doesn’t mean I will back away from my commitment to known and familiar. By stepping out of that box — and the profession. I will continue on my mission to out of our comfort zones — we can achieve what we empower and inspire those around me to take bold never thought was possible. steps into our new and bright shared future. Being a leader is about more than fulfilling our own KEEP IN TOUCH Confronting disruption can feel intimidating, but ambitions, however. It’s much bigger than that. To be Follow me no one is more prepared to address these changes than effective, we have to go beyond ourselves. This means on Twitter: you. Determine how you can take the lead in your

PHOTO BY FIONA HANSON/AP IMAGES HANSON/AP FIONA BY PHOTO looking for ways to raise those around us, focusing on @CIMA_President organisation and move ahead.

FM-MAGAZINE.COM April 2020 I FM MAGAZINE I 5 3 traits of successful finance leaders

By Andrew Harding, FCMA, CGMA

n recent years, the view of what data and gather insights. We have a Third and finally, my view is that makes a good leader has broadened unique view of where the money goes leaders should be allowed to feel — the general leading an army is — or does not go. We know what happens emotions, too — controversial, I know. Inow one of a whole portfolio of when it is added or removed. It helps us For that, resilience is fundamental. It is a leadership styles. It means that top see where businesses can be improved, skill which, if you keep practising it, will jobs can accommodate a variety of which is what leaders are meant to do. serve you well when you reach the top. personalities and personal qualities. Career-wise, you are in a great position to The image of the leader impervious to And leadership is better for that diversity make the move to the C-suite. setbacks or criticism is unrealistic. It is a of approach. This skill means we are well placed to recipe for poor mental health and sets the What are the qualities you value in make a success of Integrated Reporting wrong example. Resilience means being leaders? Determination? Certainty of (IR). This is something we at the able to recover when things go wrong, purpose? Vision? Association have embraced fully because learn lessons, and move on positively. For me, three qualities stand out in a we strongly believe that being able to Then repeat. Anything else lacks good leader. First, an effective leader is show the value a business creates — and authenticity. someone who can “join the dots” between communicating that in as complete a way Nearly everyone can be a leader, but functions in their organisation. This is a as possible — is the future of corporate knowing your business, understanding quality that is not as common as it ought reporting. IR is a good way of blending the what to measure, and using emotional to be, since it requires a broad mix of skills of the finance function with the intelligence is a strong formula that will skills. You need to know your business company’s broader ambitions. make you stand out. inside out, including the people, their Second, leadership is knowing what to tasks, and their skills. To do this means measure to achieve success. Leaders need communicating clearly and driving to be keenly attuned to setting the right performance with the right key targets — set an ambitious target and Andrew Harding, FCMA, CGMA, performance indicators. pursue it relentlessly is my mantra — and is chief executive—Management This is good news for those of us in the give those targets to the right people. If Accounting, at the Association of finance function, as systems thinking is you can give people the opportunity to International Certified Professional what we are good at. We do not just properly use their strengths, and to excel, Accountants. produce the annual accounts, we collect you will soon see the benefits. PHOTO BY STEVE BY FORREST/STEVE PHOTO PHOTOGRAPHYFORREST

6 I FM MAGAZINE I April 2020 EXHIBITION EDUCATION NETWORKING

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The company behind a new hen a supply shortage in nature failed to satisfy a brand of inland surf parks has demand increase, Craig global plans that match the W Stoddart saw an opportunity to apply his sport’s rising popularity. management accounting skills to a sport he has since become passionate about: surfing. By Oliver Rowe Surfing is one of the UK’s fastest- growing sports. According to the British Marine Watersports Participation Survey, participation grew 40% between 2015 and 2017. Stoddart, ACMA, CGMA, an entrepreneur and surfing enthusiast, said that while demand for surfable waves is rapidly increasing, there is, clearly, no increase in supply. Stoddart plans to capitalise on this opportunity by building Craig Stoddart, ACMA, CGMA, standing above The Wave Bristol a large-scale inland surf park business. surf park in the UK, predicts the company will have ten surf The first location of The Wave, near parks operating worldwide within the next decade. Bristol in the west of the UK, opened at the end of October.

FM-MAGAZINE.COM April 2020 I FM MAGAZINE I 9 The Wave Bristol has the potential to Entrepreneurial finance: A guide attract 300,000 visitors a year to enjoy the sport, as well as nature walks, retail stores, Entrepreneurs who want to raise funding for their dream ventures need lots of and “glamping” (glamorous or high-end perseverance and some ingenuity to find the money they need, says Thomas camping) accommodations. Hellmann, professor of entrepreneurship and innovation at Oxford’s Saïd Business He explained that the surfing area of School in the UK. So, what practical steps can entrepreneurs take to fund their the 100-acre site is an “enormous lake ventures? Here are the main options: — we’re talking the size of five football y Family and friends: Borrowing small amounts from family members pitches”. may be an option for some — or asking for a little help from friends. The The process he used to build the park is first cheque in most ventures actually comes from those closest to the a useful case study for management entrepreneur. accountants working with startups, as it y Angel investors: These are wealthy private individuals who fund startups involved developing new technology, in return for equity. In some countries, like the UK, and also in some obtaining financing, and having a keen US states, there are generous tax credits that make angel investing awareness of market positioning. fiscally attractive. The best angel investors are often those who started companies themselves and understand what it really takes to build a Technology solution successful venture. Technology has been a critical part of the y Crowdfunding: Many companies raise money through crowdfunding project, Stoddart said — both in campaigns, seeking donations through platforms such as Kickstarter determining the shape of the lake’s bottom (kickstarter.com). There is also the possibility of raising equity and how the waves themselves are created. finance on crowdfunding platforms, such as Seedrs (seedrs.com) or The wave-making technology has been Crowdcube (crowdcube.com) in the UK, two pioneering platforms that supplied by a Spain-based company, connect startups with angel investors, providing a well-defined support Wavegarden. The company’s previous structure for raising equity financing. African entrepreneurs can turn “Lagoon” technology was deemed by to crowdsourcing platforms, Afrikstart (afrikstart.com) or Uprise.Africa Stoddart and his partners at The Wave as (uprise.africa), which pairs investors and entrepreneurs. In China, commercially unviable because of its low e-commerce site Jingdong (jd.com) launched the crowdfunding platform wave capacity and its many single points Coufenzi (coufenzi.com). of failure. For Stoddart, addressing those y Corporate venture capital: Many startups get funded by striking alliances issues with Wavegarden has been a with established companies. These investments often involve not just collaborative process. “We have been equity but may also be part of a broader strategic alliance, for example, a shaping their thinking about what makes research collaboration or distribution agreement. Institutional investors it commercially viable. I would say we’ve also may be a source of funding for startups. been pretty influential in determining that,” Stoddart said.

Financing “The supply of surfable waves is “I know of at least 30 or 40 The Wave was started with £500 by its obviously limited by nature,” Stoddart said. developments around the world that are founder Nick Hounsfield — a long-term “Down at the beach, even at really good happening now. In ten years’ time, there friend of Stoddart. Stoddart, who is now surf beaches, 70% of the time, there are no will be a hundred of these in the world,” he CEO, came on board as an early investor, waves to surf. They’re either too big, too predicted. In the US, the parent company became a nonexecutive director, and small, or … the tide doesn’t make them of global surfing events organiser World supported crowdfunding of £250,000. surfable.” Surf League together with world champion Angel investors helped steer the planning In an hour or two hours you might get surfer Kelly Slater has established The Surf and design process (see the sidebar, one or two good waves, he said, whereas at Ranch in Lemoore, California. Other global “Entrepreneurial Finance: A Guide”). The Wave most people get “up to about 15 surf park locations include Texas in the US, With planning permission and the land waves per hour”. Snowdonia in the UK, and China. ready, further funding was required for He said the other part of the supply Stoddart’s vision is for a “whole new construction. Stoddart and Hounsfield equation is that the vast majority of the generation of surfers who have struggled spent two years pitching to more than 250 population live a long way from the UK’s to do it [and] who have never experienced investors. Those investors weren’t surfing beaches, “so you have the anything like it. They will be competent convinced of Surf Loch, the American combination of lack of supply and high and capable surfers when they go to the technology that Stoddart and the team growth, and that makes it a real beach.” were considering at that time. However, a opportunity”. Stoddart projected that The Wave Bristol will be the first of ten surf parks over the next ten years for the company — initially in the UK, then elsewhere in Europe and then at global locations.

10 I FM MAGAZINE I April 2020 telephone call from Wavegarden about its The person who “holds us to account and pros, Stoddart is maximising the new technology led key investors to travel and makes sure we’re really considering market opportunity. Lessons are available, to Spain to try it. the environment and social impact very too, for the uninitiated, as are wetsuits — That was a turning point, Stoddart clearly” is Chris Hines, a former Eden for those not comfortable with the British explained. “One of the investors who had Project sustainability director and founder weather. ■ never surfed before in his life, had never of Surfers Against Sewage — a UK-based put a wetsuit on … by the end of the hour, advocacy group. he was riding the big two-metre-high The Wave plans to attract 150,000 Oliver Rowe is an FM magazine wave, screaming, ‘Where do I sign?’” surfers and the same number of senior editor. To comment on this nonsurfers a year to the Bristol site, which article or to suggest an idea for Expansion is a short distance from one of the UK’s another article, contact him at “Part of this is a little bit like a gold rush,” main motorways, the M5. In providing a [email protected]. Stoddart said. The plan to build five parks mix of waves for beginners, intermediates, in five years and ten in ten years working with Wavegarden as the technical supplier would position The Wave as “one of the key players” in this market, he added. The company’s plans include opening a surf park in 2023 in the Lee Valley Regional Park in the north east of London, which includes much of the land used for the 2012 London Olympic and Paralympic Games. As part of the Games’ legacy, a new body, London Sport, was set up with the aim to get 1 million Londoners more active. The Wave’s site fit neatly with that objective. The site was originally a golf course that was losing money in an area oversupplied with courses. A total of 30 bidders took part in a six-month tender process, which was won by Stoddart and The Wave’s team. Preserving intellectual property (IP) rights has been crucial, he explained. The company’s team structure, systems, and supply chain have been designed to achieve that. “So, all of our design team, our engineers, our architects, our project managers are all exclusively working with us in the surf park markets,” Stoddart said. “Effectively, they’ve given us a platform to do more of these without losing a lot of the IP.” The Wave’s back-end systems work on a Go beyond multi-site, multi-currency, multi-language basis, and that has been built in right from the start. DISRUPTION The team includes the experienced developer of London’s ExCeL events centre, Blockchain. Data analytics. RPA. Cybersecurity. Our new learning Iain Shearer, and Gaynor Coley, who led opportunities equip you with everything you need to future-proof the Eden Project visitor attraction in your career. And disrupt the disruption. Cornwall in the west of England that

contains an indoor rainforest. Learn more at cpd.cimaglobal.com/Disruption. Stoddart explained that building sustainably — predominantly using glass, timber, and recycled and reused materials, and planting 17,000 trees and shrubs to © 2020 Association of International Certified Professional Accountants. offset the carbon impact — has been All rights reserved. 2001-23377 important for the Bristol site.

FM-MAGAZINE.COM April 2020 I FM MAGAZINE I 11 The trouble with tyres

global trade in scrap tyres from rich countries to the By Christian Inton/Reuters developed world has been surging in recent years, driven in Additional work by Manas Sharma part by demand from backyard furnaces that turn the waste A into cheap fuel. The practice, known as pyrolysis, often takes place without controls on emissions or waste, with potentially devastating effects on local environments and the health of workers and residents.

Recycling and reuse of tyres Waste tyres contain valuable materials that can be extracted for use in various industries.industries.

WholeWhole tyres CanCan be used as tree guards, asas fences, or as garden decoration.decoration. Can act as fenders in docks and as crash barriers. WhenWhen dumped in landfills, theythey can take hundreds of years to decompose. RubberRubber chips

ShreddingShredding Used in road building and ScrapScrap tyres can be construction. processedprocessed into rubber chipschips or granules. CrumbCrumb rubber UsedUsed in artificial turf, flooring, paving, roofing, footwear, andand as crash and noise barriers.

RubberRubber Cryogenics powder TyreTyre chips are cooled to UsedUsed in automotive parts, below –80 C (–112 F) until cable,cable, bedding compounds, theythey become brittle and fillersfillers for tyres, footwear, cancan be crushed. sportssports equipment,equipment, or as fuel.fuel.

Tyre-derived PyrolysisPyrolysis fuelfuel PyrolysisPyrolysis is the thermal BurnedBurned for fuel. Tyre rubber decompositiondecomposition of an organic has more energy (Btu) than materialmaterial without the coal,coal, but, like any solid fuel, presencepresence of oxygen. More tyrestyres burn dirty, requiring rudimentaryrudimentary operations can energy to clean the causecause environmental and particulates. healthhealth problems.

Source: European Tyre Recycling Association.

12 I FM MAGAZINE I April 2020 What’s in a tyre? TyresTyres contain naturalnatural and synthetic rubber, fabric, and wire, along with carbon black and other chemical compounds.compounds.

Carbon black Natural rubber An anti-abrasive that is Obtained from the milky, commonly used in tyre whiwhitete fluid called latex, production ffoundound in many plants

14%

EdgeEdge cover 28% Cap plies TypicalTypical SteelSteel belts SideSide wall composition CasingCasing of a passenger 27% Synthetic tyre by rubber IInnernner liner weight Produced from 16% unsaturated BeadBead filler hydrocarbon BeadBead bundle Fabric, fillers, 14% accelerators, and anti-ozonants High-carbon steel wire Source: Rubber Manufacturers Association. Used to reinforce rims of tyres

Top tyre waste importing countries IIndiandia is by far the biggest buyer, accounting for 32% of global imports in 2018, up from 7% five years ago. TThehe chart below shows net weight in millions of kilograms. 631.9

INDIAINDIA

247.6 SouthSouth Korea

Turkey 153.7

GermanyGermany 106.9

Japan 98.8

US 97.2

MalaysiaMalaysia 96

PortugalPortugal 90.1 46.946.9 UK 45.145.1 NetherlandsNetherlands 20092009 20102010 20112011 20122012 20132013 20142014 20152015 20162016 20172017 20182018

Source: UN Comtrade.

FM-MAGAZINE.COM April 2020 I FM MAGAZINE I 13 Rooting out forced labour from supply chains CLOCKWISE FROM TOP LEFT: PHOTO BY JAMESBREY/ISTOCK; JAMESBREY/ISTOCK; BY PHOTO LEFT: TOP FROM CLOCKWISE BIM/ISTOCK; BY PHOTO FRANCKREPORTER/ISTOCK; BY PHOTO KOKOUU/ISTOCK BY PHOTO CFOs and finance departments have a significant role to play in preventing and detecting slavery in the supply chain.

By Malia Politzer o one wants to imagine that possible, according to Justine Nolan, a products from where the retailer is selling the food ingredients their professor in the Faculty of Law at the something, to the origin of all the company has built an empire University of New South Wales in Sydney. components that went into those goods.” N on may have been processed “To map the supply chain completely, While this sounds deceptively simple, or picked by those getting no you need to understand it from origin to mapping supply chains completely can be pay and having little choice in what they distribution,” she said. “So a transparent difficult for large companies. Until the past do. Nor does a retail chain executive want supply chain would be able to start to trace decade, few large corporations mapped or to find out shirts destined for stores for the engaged with their supply chain beyond autumn collection were sewn by children the first tier of suppliers, without which too young to legally work. detecting and auditing for forced labour is However, the reality is that many almost impossible, according to Jessica multinationals probably are taking part in McGoverne, director of corporate affairs at forced, or slave, labour — especially those Sedex, a membership organisation that with long, complex supply chains, according offers ethical trade tools and services that to Katherine Christ, Ph.D., a lecturer in support businesses to map their supply accounting at the School of Commerce at the chain and understand risks. That means University of South Australia in Adelaide looking not just at the conduct of a who is an expert on the issue. company’s immediate suppliers, but also “Modern slavery is everywhere,” said any factories (in the case of garments), Christ. “It’s in every continent and every farms (in the case of food), or labour industry. If every multinational looks deep recruiters that contracted suppliers enough, they will find it, and we want subcontract. A thorough supply chain map them to find it and to deal with it and to for something like a cotton shirt should tell us what they have done.” ideally trace the supply chain for each Forced labour is a big problem for component of the item from the farm companies all over the world. According to where the cotton was grown, to the factory recent estimates by the International where the fabric is sewn, all the way to Labour Organization, there are more than market, according to McGoverne. 152 million children performing child “During supply chain mapping, it’s labour, and 25 million people trapped in really important to create visibility past the forced labour — some of them in supply first tier because that’s where the inherent chains feeding into big companies. risks are more likely,” she said. “This can But with more jurisdictions getting be much more difficult to do than it serious about rooting out the practices, sounds, because some organisations may companies are growing increasingly have thousands of suppliers within their serious about addressing forced labour in supply chains and may lack the resources, their supply chains. time, understanding, or right tools to map Accountants and CFOs, with their access properly.” to detailed financial information and the A number of tools are available to help: influence to make it a top corporate Some global membership organisations, concern, have major roles to play, according like Sedex, provide external supply chain to Duncan Jepson, head of Liberty Shared. mapping consultancy services. Other “Failing to address slavery is an activity companies — such as Sourcemap, that most people increasingly agree should Tradeshift, and FRDM — offer supply chain be criminal, not just unethical, and in the mapping platforms. case of banks it’s actually a predicate Once the supply chain has been mapped offence to money laundering,” he said. in detail, it becomes possible to focus on “So there’s no choice but to care about this conducting increased due diligence. This issue. And CFOs and management can include more-frequent audits or tighter accountants need to be a part of that internal controls, on suppliers in the conversation.” higher-risk areas — for example, places where it’s known that slave labour is more The first step likely for specific industries, such as South Uncovering forced labour in a complex Asia for clothing production or West Africa supply chain can be tricky — and for cocoa farmers. (See the sidebar, “What Is preventing it, even more so. The first step Modern Slavery?”) that a CFO serious about addressing the issue of forced labour in supply chains Involve compliance should take is to have the company map That’s when it’s important to bring in out its supply chain in as much detail as input from compliance departments,

16 I FM MAGAZINE I April 2020 according to Markus Funk, J.D., Ph.D., a requires a level of transparency and Denver-based lawyer at Perkins Coie, who openness that can take time to cultivate. in 2010 established the first supply chain For example, Christ remembers compliance practice among the 100 speaking to a supply chain manager for a largest US law firms and co-authored a major camera manufacturer at a breakfast book on the subject with Chicago-based event aimed at providing corporates with US District Judge Virginia M. Kendall. tools to combat modern-day slavery. The To start, CFOs and other company supply chain manager had already executives should work closely with the ensured that all the organisation’s compliance and procurement suppliers had signed a code of conduct, departments to ensure that all of the and regularly checked in with them to company’s suppliers sign a clearly ensure they understood the expectations. worded code of conduct that outlines Years later, after numerous conversations, anti-trafficking expectations and gives the she finally learned that some of the company the right to audit, according to suppliers were struggling to comply with Funk. expectations. “It’s important to use this new contract “It took two years of saying, ‘If you can’t language both with new suppliers and also comply, how can we help you?’ for the for renewals,” he said. supplier to feel comfortable telling her Compliance should also take the lead what was really going on,” said Christ. “A on any mandatory forced labour reporting lot of suppliers are afraid of being cut, so requirements and disclosure statements, they may take a ‘tick the box’ approach to according to Funk. compliance rather than taking it “One of the problems we’ve seen over seriously.” the past ten years is that this issue has Accountants working in management been handled by human resources, or accounting should also look critically at corporate social responsibility — which the numbers and ask questions if they meant that lawyers had either no or very seem too low, according to Linde. limited involvement in draft disclosures, “You need to ask, ‘Why are we getting and that’s a huge problem,” he said. “You such a good deal from this supplier, when want compliance to handle this issue all the competitors are giving you prices because the last thing a company wants is above that range?’” he said. “Or if you have a letter from an anti-trafficking advocacy workers actually in your operation abroad, group saying, ‘We’ve reviewed your you could do a headcount and ask why the disclosure and see they are noncompliant, operating numbers are so low. It’s about and we are going to start a campaign asking the right questions.” against you.’” Build in some flexibility Educate Finally, the finance department needs to One way that management accountants be careful about the demands they put on can get involved in the fight against suppliers and ensure that they aren’t slavery is by raising awareness in their unintentionally creating pressures that company about the issue, according to may lead to the abuse of workers. For Elrich Linde, ACMA, CGMA, support example, pushing for extremely short lead manager at AMOSCA, a management times and below-market prices can put consultancy firm based in London. suppliers in the position where they are “Look at your company, and ask forced to cut costs, which they pass on to yourself, ‘Is there an awareness of factories that they are subcontracting, modern-day slavery?’” he said. “If not, you which, in turn, also need to find ways to can be the driving force in educating cut costs, Christ said. people and influencing the company’s “They put people in the supply chain in culture.” the position where they don’t have much Additionally, everyone in the company of a choice — everyone has to cut costs,” should receive training about the risks and make a dent in this issue, according to she said. “And then the person at the end red flags of forced labour in supply chains, Christ. In addition to educating suppliers of those demands may resort to slave according to Funk — and they should take about anti-forced-labour expectations, it’s labour.” steps to ensure their suppliers are vital to build trust with them so they feel educated about the issue, too. However, comfortable working with the customer to Leveraging audits merely getting suppliers to sign a smartly address any issues that may be leading to Many companies opt to outsource the worded code of conduct isn’t likely to conditions that create forced labour. This auditing of high-risk factories to third

FM-MAGAZINE.COM April 2020 I FM MAGAZINE I 17 parties that specialise in “ethical audits”. map out your supply chain, you need to heightened risk for human trafficking Outsourcing audits can give companies focus on the high-risk areas — and make (which may differ, depending on the the extra assurance that the auditors are this a part of your audit plan.” geography or sector). specialists in spotting the red flags for As a part of that plan, auditors should Consider this example: A factory that modern slavery, in addition to auditing for be educated about common trafficking employs workers from another country health and safety, among other things. scenarios specific to their industry and who don’t speak the language where the When audits are conducted in-house, how to look for red flags that indicate a factory is located requires additional due it’s vital that everyone involved with the diligence on the part of the auditor to auditing process receive specialised ensure that trafficking isn’t taking place. training on how to detect slave labour. Paying workers in cash — particularly in This may require creating specialised an industry where cash payments are checklists or bringing in experts like unusual — can also be a red flag for forced management accountants with supply labour, and this would warrant additional chain expertise, nongovernmental scrutiny. organisations, or lawyers to conduct “When we train up the auditors, we training, according to Funk. give them written materials and “One of the problems is a lot of checklists,” Funk said. “You want part of companies have a beautifully worded code their audit to include a module on of conduct which they don’t even try to trafficking so they know what to look for enforce,” he said. “Companies need to look and they do it every time.” at the reality. Once you understand and Auditors should also spot-check employment contracts to ensure they are written in the workers’ native language and that the workers can read them, and ensure that workers have control of their What is modern travel documents at all times. If an auditor sees beds or other accommodations slavery? on-site, it’s a red flag that warrants further Finding forced labour in the supply investigation. In addition to making chain requires that management observations, auditors should routinely accountants know what modern talk to workers to verify that what slavery looks like. The International managers tell them is actually true — with Labour Organization (ILO), a United a translator, if necessary, according to Nations agency that helps define and Funk. As with all red flags, one indicator set international labour policies, doesn’t necessarily mean that forced defines forced labour as “all work or labour is definitely taking place: Factories service which is exacted from any might have perfectly good reasons for person under the threat of a penalty certain practices (like on-site and for which the person has not accommodations). offered himself or herself voluntarily”. “Everyone in the organisation needs to The ILO says this can include be sensitised,” Funk said. “This is a serious situations in which people are forced matter, with legal and reputational to work under the threat of violence or components that need to be treated just as physical intimidation, or through you would an allegation of fraud and schemes like debt manipulation, bribery.” holding on to someone’s identity papers, or threatening to report Building anti-trafficking controls victims to immigration authorities. into management accounts Many actors, including While anti-forced-labour audits are an governments, private industries, and important tool, Jepson would also like to individuals can impose forced labour see companies start to think about how upon victims; it is not limited by they might develop and incorporate geography, status, or work category, anti-trafficking internal controls into and it appears in all countries across management accounts. the globe, according to the ILO. “Audits are about spotting something For more information on the and rectifying it,” he said. “But building circumstances and definition of ongoing controls into your business forced labour, visit the ILO at model allows your business to avoid the tinyurl.com/y4ba2f56. problem in the first place.” While internal controls around issues

18 I FM MAGAZINE I April 2020 such as money laundering have become “of product supply chains to evaluate and standard operating procedure for many address risks of human trafficking and businesses, the idea of anti-trafficking slavery”, audits, certification from controls is something totally new for suppliers that goods meet anti-slavery many companies, according to Jepson. But laws, internal accountability, and training. that shouldn’t discourage companies from Five years later, the UK passed the considering them. Modern Slavery Act 2015. Currently “Robust compliance and robust considered the most influential monitoring will come from requesting anti-slave-labour legislation, the act that a company has the same kinds of requires companies with an annual internal controls that they have in place turnover above £36 million to produce an for anti-corruption and anti-money annual slavery statement — signed by the laundering,” he said. “It’s about chairman of the company — detailing the establishing a chain of good practice.” organisations’ operations and what To start, Jepson suggests that they’ve done to identify and manage the companies request information related to risk of slavery in their supply chains. payments to recruitment agents, Since then, other countries — notably confirmation that agents are paying Australia, France, and the Netherlands workers, and verification by on-site — have adopted various bills requiring factory managers (and, if at all possible, companies to engage in additional due the workers themselves) that workers are diligence and reporting regarding how being paid. they manage the issue of forced labour in While this level of verification isn’t their supply chains. currently required by any of the current Much of the existing legislation iterations of international anti-trafficking currently lacks large financial penalties legislation, it’s a step that companies for noncompliance, according to Christ. serious about getting ahead of the issue However, there’s reason to believe that should consider, according to Jepson. may soon change. “An audit only happens once a year “Governments are regularly reviewing — but for slave labour to disappear, you these acts,” said Christ, adding that the UK have to embed this information into the Act has recently undergone such a review. regular accounting process,” he said. “You “And these reviews are starting to suggest want it in management accounts.” that as businesses become more familiar with the issue, there will be financial An evolving legislative climate penalties in the near future.” Slavery is a global problem so abhorrent As the great 18th- and 19th-century that any ethical company should be anti-slavery campaigner William willing to invest whatever is necessary to Wilberforce said: “You may choose to look ensure that the people involved with a the other way, but you can never say again company’s core business are not working that you did not know.” And for companies under duress. It’s also an issue that that fail to take effective action against consumers are becoming aware of around modern slavery, such a policy invites not the world — which has led to a tightening just moral hazard but increasingly severe of global legislation. While thus far the legal and reputational consequences. legislative environment has focused more “The tide is changing, and people are on reporting and lacked significant becoming much more aware about issues financial penalties, it’s likely this will related to forced labour,” said Linde. “If you change in the near future, according to are too late, or wait too long, you might Jepson. end up on the wrong side of that.” ■ “The forward-thinking move is to treat this not as an ethical or sustainability issue, but as a real legal risk,” he said. “And that means building internal controls into your business.” Supply Chains Act. The act, which went Malia Politzer is a freelance writer In fact, over the past decade, the into effect on 1 January 2012, requires based in Spain. To comment on this legislative environment has been evolving companies that have a presence in article or to suggest an idea for rapidly on this issue around the world. California and work in retail or another article, contact Drew Adamek, The US state of California got the ball manufacturing with annual gross receipts an FM magazine senior editor, at rolling on the issue of forced labour in above $100 million to disclose the extent [email protected]. 2010, when it passed the Transparency in of their efforts in five areas: verification

FM-MAGAZINE.COM April 2020 I FM MAGAZINE I 19 Avoid these diversity and inclusion mistakes

Companies have spent billions on D&I training, but studies suggest it’s not easy to get it right. Here are five tips to avoid common mistakes.

By Andrea Chipman

ompanies have spent billions root cause of a D&I problem without and have support from all levels of on diversity and inclusion research, going for easy fixes, promising management. training to create work the impossible, and focusing on diversity “For any programme to be successful, it C environments in which representation rather than the talent has to be championed and led from the employees recognise and pipeline, a report by management top, not just by HR,” said Hephzi embrace differences amongst co-workers. consultant Korn Ferry suggests (visit Pemberton, chief executive of the Equality In 2016, an analysis of 260 studies tinyurl.com/w7488e5 to view the full Group, a UK consultancy and executive suggested D&I programmes can work, but report). recruiter that helps finance and getting them right isn’t easy. Diversity experts emphasise that technology companies develop D&I

PHOTO BY TUNART/ISTOCK BY PHOTO Common mistakes include assuming a programmes need to be carefully planned strategies. “Then it must be linked to

20 I FM MAGAZINE I April 2020 having very clear and measurable goals Collect the data and identify gaps gender pay gap and gender equality by and targets around what you want to Employers should take a measure at each the UK Government Equalities Office achieve.” stage of the pipeline, from recruitment to determined that restructuring systems Tony Vickers-Byrne, chief adviser for hire, pay, and promotion. Quantitative and using evidence-based design of HR Practice at the Chartered Institute of recruitment data, for example, can be hiring practices, promotion procedures, Personnel and Development (CIPD), a tracked based on the number of and compensation schemes are the best professional body for 150,000 HR and applicants, number of telephone ways to improve D&I initiatives. learning and development professionals interviews, final interviews, and hiring Looking at diversity within a broader in the UK, Ireland, the Middle East, and rates and should include the precise context, meanwhile, means identifying Asia, observed that organisations can number of candidates in desirable often overlooked areas such as make basic mistakes in job categories who are being shortlisted. neurodiversity (neurocognitive advertisements. Employee satisfaction surveys provide differences include autism, attention In the UK, where anti-discrimination qualitative data that can help detect deficit hyperactivity disorder, dyslexia, laws include bias based on age, prospective opportunities for improvement. Tourette’s syndrome, anxiety, obsessive- employers looking to hire within a broad Only sufficient collection and analysis compulsive disorder, and depression), age group have been known to post of data will help ensure that employers sexual orientation, and religion. advertisements with photos showing only avoid unconscious bias. “The conversation often gets stuck in people in their 20s. “Just as you wouldn’t have a financial gender, which is the natural place to start, business plan without significant data but not the entirety,” Hephzi Pemberton How to avoid common mistakes analysis, you shouldn’t have a significant said. Employers who want to improve D&I programme without the same performance on D&I metrics, which tend scrutiny of data,” Vickers-Byrne said. Don’t opt for easy solutions to be specific to a business and the local Data can indicate the extent to which a The Korn Ferry report mentions some context and may include recruitment and company differs from other benchmarks “quick fixes” that organisations often retention goals, might keep the following and is relevant to a number of diversity look to implement, including employee five lessons from diversity experts in targets, including age, disability, resource groups and diversity or mind: ethnicity, and gender. A report on the unconscious bias training.

FM-MAGAZINE.COM April 2020 I FM MAGAZINE I 21 While all can be powerful, they are awareness of how broad a context of allow organisations to attract a wider frequently implemented ineffectively, demography you should be changing.” range of people at different life stages, without a D&I strategy or mechanisms to Hephzi Pemberton said, including re-enforce lessons. Also, bias training Make someone accountable younger people who are looking to isn’t always effective or sufficient to Another reason D&I programmes fail, the pursue other interests in addition to their ensure bias-free hiring. To help recruiters Korn Ferry report suggests, is that careers. put aside their biases, details that may organisations focus on goals for Flexible working arrangements also identify a candidate’s ethnic background representation at the top without offer a crucial way of getting men, as well (LinkedIn profile photo), gender, age, etc., building up diversity in the internal as women, onboard with diversity can be removed from job applications. talent pipeline, a process that is likely to programmes, those interviewed told FM. “We have to avoid that tick-the-box require robust preparation of the talent mentality,” Vickers-Byrne said. “Just acquisition function and hiring Don’t overpromise running mandatory D&I training doesn’t managers. Setting diversity targets can be mean you are going to have any lasting At Public Health England, the challenging and can even potentially behavioural change. It’s about opening up government executive agency where undermine overall D&I aims if people’s minds and stressing the benefits Vickers-Byrne was previously HR director companies make bold promises without to the business of improved diversity, as and its chief adviser for diversity and having thought about how to achieve well as explaining to line managers the inclusion and staff wellbeing, the chairs them. problems that they might experience if of the employee diversity networks could “It takes longer than you think, and it they don’t manage their employees in a meet regularly with the chief executive involves behaviour change,” Hephzi fair and structured way.” without HR being involved. That enabled Pemberton said. “You need training and Middle managers are often key to them to be “frank about what are coaching, and often there is a lack of integrating D&I policies within a reasonable diversity goals and any budget.” corporate culture, said Cat Ommanney, problems faced by employees with Vickers-Byrne said, “Particularly when director of MHP Communications, a different protected characteristics”, he you are developing internal targets, they London-based communications said. Indeed, diversity networks can need to be developed with line managers, consultancy. They have to be aware that bolster the chief executive’s leadership by executives, and employee networks so progress is not just a question of gender helping them reflect the employees’ they can be owned rather than imposed parity, but also of ethnicity, education, voice. from above. If the majority of BAME and disability, and even neurodiversity, Typically, making progress requires female appointees are nonexecutives Ommanney said. Even a workforce that having an accountable committee or task rather than executives, then you need to has similar numbers of women and men group that is diverse, including not just flag that up.” is likely to be more homogeneous in minorities but also people who aren’t as Demonstrating the business case for other ways, she added. connected to the topic around the table, diversity is key, he said. “Employers who “Only 7% of executives at top firms in Hephzi Pemberton said. have relied on traditional pipelines to fill the UK are from a black, Asian, or Having a representative for protected posts are missing the opportunity to minority ethnic (BAME) background, groups, or executive champions in the bring in new diverse talent. They need to despite making up 13% of the general area of diversity, can also be useful, take positive action to get new skills, population,” she said. “One-fifth of asset Vickers-Byrne said. These individuals sit experience, and thinking into the managers went to either Oxbridge outside of the HR function and can help pipeline.” [Oxford and Cambridge] or [another support line managers and advise them According to the World Economic leading university]. It’s complete tunnel on what options that have worked in Forum, bringing people from diverse vision, and you are going to come up with other parts of the organisation’s backgrounds together is a key driver of the same ideas and make the same operations are available to them. innovation. Studies suggest that diverse mistakes over and over again if you are so management teams generate more narrowly focused.” Keep flexibility as an option revenue, and a diverse workforce Understanding personal experience is The importance of flexible working to improves company culture. ■ a key part of understanding diversity, said diversity and inclusion cannot be Steve Pemberton, chief human resources overstated, Vickers-Byrne said. officer at Workhuman, a maker of Evaluating the work/life balance of cloud-based human capital management employees — especially those with caring software solutions headquartered in responsibilities — can help promote a Framingham, Massachusetts in the US, return to the workplace for experienced and Dublin, Ireland. individuals who might otherwise be lost Andrea Chipman is a freelance writer Men may perceive that they have from the workplace. based in the UK. To comment on this nothing to contribute to the “Evidence shows that once people are article or to suggest an idea for another conversation, Steve Pemberton said, able to live reasonably on their salary, article, contact Sabine Vollmer, an adding that this can cause many of them then more would prefer flexible working FM magazine senior editor, at to shut down. “A lot of the collisions that to higher salaries,” he said. [email protected]. do unfold are really due to a lack of Flexible working environments also

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© 2020 Association of International Certified Professional Accountants. All rights reserved. 2001-25634 PHOTO BY PAUL JEFFERS/AP IMAGES game of the stay ahead directors Helping than adozen years. served on company boards for more in corporate governance andhas consulting business thatspecialises Imran Furkan, FCMA, CGMA, leads a Global leadership series In this issue of FM, finance leaders from across the world provide advice on topics such as governance, change management, and data-driven strategy. Pages 24-42.

Corporate boards can follow these five tactics to help businesses flourish in the face of rapid technological advances, global competition, and fluctuating markets.

By Sabine Vollmer

he financial services industry the management was excited, Furkan was consolidating after the said. They felt held back by the board and worst global financial crisis in wanted to become part of a company that Tmore than 75 years when was growing faster. Furkan argued in Imran Furkan, FCMA, CGMA, favour of selling, and his fellow directors joined the board of a Sri Lankan financial agreed. The deal was completed in 2014, services company in 2011 as an turning the company into a subsidiary of independent, nonexecutive director and its more aggressive competitor. the board’s youngest member. In the “I’ve always been somebody who’s years since, he has tried hard to provide advocated being disruptive before you the kind of leadership he believes is are disrupted,” he said. “I’ve always been necessary for board members to help for trying out new business models or businesses flourish in the face of even acquisitions or a little more globalisation, automation, and rapid aggressive approaches, provided it can be change. backed up by the appropriate systems The company, founded in 1978, had and processes.” grown slowly and steadily by the time Now, Furkan is CEO of Tresync, a Furkan joined the board, mostly by consulting business that specialises in taking deposits and issuing loans. Its corporate governance, particularly directors were risk-averse and reluctant strategic and business model changes. to invest heavily in digital technology. Tresync is based in Singapore and When a competitor looking for employs about 20 people full time across investments in an industry set for rapid Asia Pacific. growth offered to acquire the company, Furkan has served on corporate

April 2020 I FM MAGAZINE I 25 boards of private and public companies for more than a dozen years. He also sits A rigorous annual performance on corporate advisory boards, which are common in Australia and Europe and evaluation by an external third party provide insights to corporate directors and top management. provides a reality check of a board’s Tactics that keep board members on their toes effectiveness. High-performing boards are rarely the result of chance. That’s of particular relevance to CFOs, who are increasingly taking on strategic responsibilities and becoming more valuable as candidates Refreshment in small organisations, may require to serve on boards. To assemble and Furkan is unapologetic about the need second and third opinions, and may not maintain a highly effective board, for boards to regularly refresh. It takes automatically lead to large follow-on Furkan suggested five basic tactics that about three years for directors to investments, Furkan said. To improve are also championed by executive understand a company, its corporate cybersecurity, for example, an recruiters, researchers, and culture, and the industry’s business organisation may be required to perform consultants. cycle, he said. After five years on the a risk assessment of processes and board, members should be replaced by procedures rather than just installing Accountability new directors with fresh perspectives, he new software. “One of the biggest causes A rigorous annual performance suggested. “Board rotation is critical. I’d of breaches are humans,” he added. evaluation by an external third party say nobody should be on a board above Changing employees’ habits to improve provides a reality check of a board’s seven years except maybe the chief password protection may end up being effectiveness. The evaluation should executive. That’s a point at which it more important in reducing the risk of a answer questions such as: Has the board should all change.” cyber breach than merely installing a as a group met its targets? How do its Board members’ average tenures vary new software package. practices compare to corporate greatly across the world, partly because governance standards and board of regulatory requirements in some Continuous education practices of comparable organisations? Is countries, linking board tenure to Directors must understand the role the board responsive to shifting independence. In 2018, boards in Brazil, corporate governance plays and what competitive landscapes and stakeholder Norway, Japan, South Korea, Sweden, the regulations they need to follow. They views? How do the board’s collective Netherlands, and Italy had the highest need to work together as a group and strengths and skills measure up to the turnover, with 50% or more of directors provide leadership for the company to organisation’s long-term goals? serving three years or less, according to survive crises and succeed in the long Boards should initiate the Institutional Shareholder Services. term. Continuous education and training performance evaluations. Shareholder Boards in Singapore, Mexico, the US, are available to board members to help resolutions can address persistent failure Switzerland, Thailand, India, and South them fulfil these responsibilities. But it’s to do so. Africa had the lowest turnover, with 60% also important for directors to be curious Board performance evaluations or more of directors serving longer than and willing to keep learning on their should include self-assessments by three years. own, Furkan said. individual directors. If done right, the Getting the mix of directors with Board members whose professional evaluations can help the board identify longer and shorter tenures right can be expertise is in other industries and competency gaps and blind spots and tricky and varies by company. Research directors who are industry insiders need to mitigate them before problems arise. suggests the right balance can help lower stay up to date with the latest trends to a company’s exposure to risk and which the business is exposed, he said. Diversity increase performance. “What’s happening in the industry or with A diverse board is made up of directors the technology? Are you preparing yourself who are of different genders, ethnicities, Outside advice for issues about to face the industry? That’s and ages, and have different experiences. Corporate boards have long relied on critical to do for your own self.” ■ Research suggests that social and external resources such as expert professional diversity generates diversity advisers from academia, consultancies, of viewpoints, perspectives, and or law firms to help with critical Sabine Vollmer is an FM magazine opinions, which in turn encourages open decisions. Some companies have senior editor. To comment on this dialogue and discussion. But recruiting advisory boards whose members assist article or to suggest an idea for new board members without emphasis the board of directors but have no another article, contact her at on skills and expertise raises concerns of fiduciary responsibility. [email protected]. tokenism. Subject-matter expertise may reside

26 I FM MAGAZINE I April 2020 Developing the finance profession in Thailand

hakkrit Parapuntakul, deputy permanent secretary at Thailand’s Ministry of Finance and the president of the Thailand C Federation of Accounting Professions, has seen it as his role to provide clarity around work systems and policies for the accountancy federation’s employees and to remove barriers to the team’s success. He also stressed that leaders, including himself, must operate under the principle of fairness, and that knowledge is key. “Being a good leader is to … gain deeper knowledge and know it thoroughly and correctly, in Chakkrit Parapuntakul, deputy permanent order to use the knowledge to make necessary secretary at Thailand’s Ministry of decisions,” he said. “Doing so will inspire the team’s Finance and the president of the Thailand

PHOTO BY JACK TAYLOR/AP IMAGES TAYLOR/AP JACK BY PHOTO confidence in the leader’s decisions.” Federation of Accounting Professions

FM-MAGAZINE.COM April 2020 I FM MAGAZINE I 27 A chachampionshipmpionship CFO’s data-driven leleadershipadership

The Super Bowl victors’ finance chief helps the team use data to seek the best talent, meet customer preferences, and more.

By Neil Amato

an Crumb, CPA, CGMA, is equal parts voice Association. Crumb grew up a sports fan, but he never of reason, risk manager, innovator, and figured that he would be able to apply his expertise in strategic partner as CFO of the Super finance to a job so close to the action. D Bowl-winning Kansas City Chiefs. Since Crumb was hired in 2010, the team has had He is a leader in the organisation, but seven ten-win seasons in ten years, with seven playoff he will confess to being a fan as well. That passion for appearances. In the previous ten seasons, Kansas City the game helps him connect with the team’s posted ten wins just twice, with two playoff numerous repeat customers, including many of the appearances. A CFO obviously can’t affect a team’s 70,000 fans who turn out on Sunday afternoons at win-loss record as much as a Hall of Fame coach or a Kansas City’s Arrowhead Stadium. star quarterback, and the finance job remains mostly “One of the unique things about working in a the same regardless of the team’s performance on the professional sports organisation is the connection to field. But a data-driven approach can help any the team you are working for,” Crumb said. “Seeing the organisation, and the tools available to leverage data passion and excitement of the fans, it drives me to do in 2020 make the CFO job quite different from what it the best job I can. I can’t think of much that equals the was a decade ago, providing new opportunities to feeling of seeing our fans pack Arrowhead Stadium make an impact on an organisation. and make it the loudest outdoor stadium in the The theme that emerges throughout Crumb’s many world.” responsibilities — he has oversight of finance, IT, He’s not exaggerating; Guinness World Records has strategy and analysis, and more — is his commitment certified the home crowd’s decibel level. That game to seeking data-driven answers to challenges the day atmosphere — notable just as much for noise in franchise faces. These are issues that are not much the stadium as for the aroma of Kansas City-style pork different from the obstacles nonsports businesses face or other meat on portable grills in the parking lots — is every day, such as finding and keeping the right talent, something that makes a game there special, and now increasing sales, and protecting valuable data. the team has the on-field acclaim to match it. Fifty “We are able to collect, store, retrieve, and analyse years after the franchise’s first National Football so much more about our customers, suppliers, League championship, Kansas City defeated the San business relationships, and practices,” Crumb said. Francisco 49ers 31–20 on 2 February to win the Super “Technology has enabled us to accomplish more Bowl. through automation and efficiency and at the same Crumb has been on the job in Kansas City for a time increasing accuracy through pulling data directly decade, and before that he was the CFO for another from the source.” major US professional sports team, the New Orleans Any organisation is only as good as its talent, and

PHOTO BY STEVE SANDERS/KANSAS CITY CHIEFS SANDERS/KANSASCITY STEVE BY PHOTO Hornets (now Pelicans) of the National Basketball the IT team Crumb oversees embarked on a data effort

28 I FM MAGAZINE I April 2020 Dan Crumb, CPA, CGMA, has been CFO of the Kansas City Chiefs of the US National Football League for ten years.

28 I FM MAGAZINE I April 2020

Leadership - A championship CFO’s data-driven leadership.indd 29 3/4/20 9:27 AM players, the departments Crumb manages and technology to achieve compliance in Advice for young have data on the Chiefs’ customers, from our organisation.” those wanting a Super Bowl T-shirt or One recent example was the creation of finance professionals player jersey through an online store to an automated system for the signing of those longtime, regular fans who show up waivers by outside groups holding events Dan Crumb has been a CFO since each game day, people the team calls its at the stadium. Another, Crumb said, was 1994. He offered the following advice season ticket “members”. Data on the digitisation and visualisation of the for finance professionals who aspire customer preferences helps the team organisation’s enterprise risk assessment, to be a CFO one day: create a more satisfying experience on which can be customised with a new y Be adaptable to change and game days and throughout the year, sorting capability. “We were able to present embrace technology. reinforcing the franchise’s reputation with the compiled data in a very flexible, y Be committed to lifelong its loyal fans. dynamic format which is always accessible learning and innovation. “Don’t Crumb said a framework of people, to our executive team,” he said. let that term innovation become systems, and processes protects the more than what it is,” Crumb customer data. Collaboration with other The rewards and challenges of said. “It’s nothing more than departments is one of several steps the leadership finding a better way to do things. finance function takes to ensure the One obvious reward of leadership for Always try to find a better way.” organisation has strong cybersecurity Crumb was attending the Chiefs’ Super y Don’t underestimate the controls in place. Providing those Bowl victory at Hard Rock Stadium in importance of building the departments with sound principles, along Miami Gardens, Florida. It was not his first right culture. “Trust is the core with the right resources, training, and Super Bowl, however. He worked as event foundation upon which you processes, goes a long way toward security as a university student at the build everything,” Crumb said. mitigating or eliminating cyber risks. Louisiana Superdome for the 1986 game, Right now, for him, emphasising “It’s one of the most important risks Super Bowl XX. The sports enthusiast never culture includes reminding the that we protect against, as a cybersecurity thought he’d get back to that big stage. Chiefs’ staff to appreciate the incident can be damaging to our entire Crumb said the main challenges of good times: “You hear the phrase organisation in many ways, including leadership today are managing change and ‘live in the moment’. If there was reputational damage,” Crumb said. trying to find balance. “Times are changing ever a time to live in the moment, so fast, and there’s so much disruption,” he this is it.” The role has changed, yet it remains said. “How to navigate that change goes y Keep in touch with your the same back to developing trust and having the professional network. A single The Chiefs finished the 2019 regular people you lead trust that you’re going to conversation with a former season with 12 wins and four losses, and lead them down the right path.” manager helped him get an then they had two additional home games The roles we aspire to can at times be interview with the New Orleans in the January playoffs. Even if the record all-encompassing, so it’s important to Hornets (who were renamed had been 4–12 with no playoff appearance, remember that life is more than work, he the Pelicans in 2013), a role that Crumb said, the role of finance would have said. “We’re so connected today, so it’s helped him be considered for the been the same. “As we do have a important to maintain balance.” CFO job with the Chiefs. connection to the team and our fans, we The most rewarding part of leadership do feel the emotions of those ups and for Crumb is simple: “Seeing your team downs,” he said. “We still have the same achieve success.” designed to improve the ability to identify work to do, and a big part of that job is to Crumb saw the organisation reach the the strengths and weaknesses of current be prepared for success. So, regardless of pinnacle of its sport, and he and his team and future players. About six years ago, the record, we are always preparing for had a role in making it happen. ■ staff that Crumb supervises built a custom success and doing the fundamental work database for the football operations staff, that has to be done.” which includes head coach Andy Reid, Hear more general manager Brett Veach, more than a Seeking efficiencies For more from FM’s interview with dozen assistant coaches, as well as scouts Compliance and innovation might not Dan Crumb, listen to the podcast and analysts. The database has always go hand in hand, but Crumb said “Success Secrets From the Super information on prospective players not yet the two can be intertwined. For example, Bowl Champs’ CFO”, available at eligible for the NFL and on every player for he welcomes feedback from his finance tinyurl.com/sgttp2d. the other 31 teams. team on ways to make compliance efforts “It gives the football staff the resources more efficient. “Compliance is a core piece necessary to properly scout and have all that you can’t compromise on,” he said. Neil Amato is an FM magazine senior the information on players they need in “You can be innovative in how you achieve editor. To comment on this article or one place, easy to access and with a compliance, and we always ask our people to suggest an idea for another article, platform that’s easy to use and easy to store to find the most effective and efficient way contact him at Neil.Amato@ and retrieve data from,” Crumb said. in doing this. We exhibit leadership by aicpa-cima.com. In addition to oversight of data on NFL providing guidance and the systems, tools,

30 I FM MAGAZINE I April 2020 Opportunity, meet preparation. The Finance Transformation Certificate Program is for leaders in the future of finance.

What your finance team looks like now is not what it will For more information on need to look like in the near future. learning for your finance The Finance Transformation Certificate Program helps you and accounting staff, visit lay the groundwork with insights into why the changes are cimaglobal.com/learning. necessary and how your team will need to respond.

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© 2020 Association of International Certified Professional Accountants. All rights reserved. AICPA and CIMA are trademarks of the American Institute of CPAs and The Chartered Institute of Management Accountants, respectively, and are registered in the US, the EU, the UK and other countries. The Globe Design is a trademark of the Association of International Certified Professional Accountants. 2001-23377

2001-23377_1908-08442 Finance Trans FM Ad.indd 1 2/4/20 3:49 PM Steps to ethical leadership

An organisation’s ethical culture starts at the top.

By Bryony Clear Hill

reating an ethical culture should offering tax, legal, consultancy, and they find inspiring. If you say all the right be a goal of every leader. It is not financial services. things but your words are found to be simply the morally right thing to Ethical leaders put ethics at the heart of empty, you will quickly find people stop Cdo. Research repeatedly everything they do and are guided by moral listening. By setting a clear example and demonstrates the business case principles such as integrity, honesty, and acting as a role model for ethical decision- for taking ethics and culture seriously, with fairness. They empower those around making, you inspire people to follow you higher staff satisfaction and retention, them to also act in an ethical manner, and begin to raise their standards, reduced costs, increased productivity, thereby building a culture of doing the expectations, and performance. Where reduced risk, and better customer right thing throughout an organisation. leaders behave unethically, this can lead to outcomes being just some of the benefits. Ethical leaders do the right thing even people throughout the organisation seeing “Organisations which are truly on a when this requires making decisions that this as acceptable and following suit. mission, led by passionate leaders who may be unpopular. Whilst leading from the front is bring their employees, suppliers, and Here are five top things you can do to important, it is also vital to empower the customers on the journey, are the most provide ethical leadership: people around you to act in an ethical way. successful,” said Mark Allen, FCMA, Nigel Iyer, a CIMA fellow who is also a CGMA, the CEO of the TAG Accountants Lead by example chartered accountant, has over 25 years of Community, an organisation bringing People quickly lose trust in leaders they experience investigating fraud worldwide.

IMAGE BY BENJAMIN HARTE/IKON IMAGES HARTE/IKON BENJAMIN BY IMAGE together UK accountancy practices don’t believe in, while they follow leaders He argues that “one of the finest ways

32 I FM MAGAZINE I April 2020 management can demonstrate they care Allen said fairness is a key trait for an example, through conversations in the about ethics is to motivate everyone who ethical leader. “Clearly, we all get on with office about ethics stories in the news. works for them to play their part in some people better than others. But that Iyer suggests using real-life examples protecting the company against unethical does not mean that those people are right all from within and outside your company. If behaviour”. When it comes to fraud, it is the time. We must take a step back and look there is an example of someone going people working with the details — for at the facts, rather than allowing emotion to above and beyond, talk about it. If example, those close to the money flows affect our integrity.” It is important you something goes wrong, ask what lessons such as orders, payments, and account make sure you never show favouritism, as your team can learn. Exposing your teams postings — who have the best opportunity this can lead to resentment and distrust. to realistic scenarios such as typical frauds to identify red flags, not necessarily the Instead, act consistently and fairly. is an interactive way of developing a managers who are less involved in the curious mindset and actively considering nitty-gritty. By ensuring you lead from the Embed ethics in goals and how to react in given situations. FM’s front whilst instilling ethical thinking performance targets “Ethics in Action” series (visit tinyurl.com/ across your whole team, ethical thinking Unfortunately, the way we make decisions t88hx2e) offers a number of ethical becomes business as usual. can be affected by pressures such as dilemmas, which can be another useful deadlines or tight budgets. Doing the right way of stimulating discussion about ethics. Promote transparency thing sometimes is passed over in favour of Ultimately, the mantra “treat others as Would people in your team be happy to doing what is quicker or less costly. One you would like to be treated” is a good guide come and talk to you if something were way to combat this is to send a clear signal to follow. Think about the leaders who have concerning them? An ethical leader makes that you value how your team get things inspired you, and learn from them. ■ sure their staff know that they are always done in addition to what they deliver. available for a chat. They promote a culture According to Iyer, “The true defenders of where employees are able to ask questions, the organisation are the people that work Bryony Clear Hill is the associate challenge decisions, and speak up without for it, and they should be motivated to do manager–Ethics Awareness for CIMA fear of retaliation. so and justly rewarded.” When it comes to members and is based in the UK. To “An ethical organisation is one in which detecting fraud, for example, managers comment on this article or to suggest there is a culture of listening,” Allen said. need to “empower people in the an idea for another article, contact Drew “You are working towards common goals, organisation to show interest and a healthy Adamek, an FM magazine senior editor, and listening and understanding is more curiosity, and reward them for showing at [email protected]. valuable than dictating.” initiative”. When decisions are made that affect There are many ways to recognise ethical your people, be open about the reasons and thinking and behaviour. Sometimes simply Resources implications. Making excuses or calling out people doing the right thing with Articles downplaying the impacts will likely lead to a thank you is enough. Another option resentment and a negative culture going could be to hand out awards related to “Being Ethical in the Face of forward. If there is an ethical lapse in a company values, singling out individuals Wrongdoing”, FM magazine, 30 team or a company, trying to cover this up who go above and beyond. Many companies January 2020, tinyurl.com/ws9q6ds can be harmful. Instead, talking about what have now formalised ethics in performance “New Code of Ethics Is True to CIMA’s lessons can be learned is the quickest and reviews, requiring employees to Core Principles”, FM magazine, most effective way to rebuild trust. demonstrate how they have applied ethical October 2019, tinyurl.com/yy7z679l values such as integrity throughout the year. Prioritise fairness and avoid bias Managers then assign a performance rating, “Managers’ Quandary: Ethics or People often feel comfortable surrounded which could impact financial rewards such Targets?” FM magazine, 6 February by people like them, but this leads to as pay rises or bonuses, based on these 2019, tinyurl.com/rdy6ofo close-minded thinking. Push yourself to values in addition to how successfully they Guidelines seek out different opinions. Make sure met targets. Another option is to use one of everyone on your team is included in the the many platforms that allow employees to CIMA Code of Ethics, conversation and is comfortable with recognise the good work of others with tinyurl.com/y36gnvca participating fully and sharing their points that can be converted into gift cards. opinion. If you notice that a member of Why not tie these recognitions to ethical AICPA Code of Professional Conduct, your team rarely speaks up in team values such as honesty, courage, or tinyurl.com/y9vvhkfc meetings, have a quick chat with them to collaboration, allowing employees to call Podcasts understand whether something is holding out great behaviours demonstrated by their them back — perhaps they worry that their colleagues? “How to Encourage Ethical Corporate opinion would not be valued, or they are Behaviour”, FM magazine, 12 February keeping quiet because they do not feel their Create ethics moments 2020, tinyurl.com/wuxr65a views fit with the majority. Demonstrating Talk about ethics with your team regularly. “Driving Ethical Behaviour in a Global that you are there for every member of your This could be in a structured way, such as Organisation”, FM magazine, 21 August team and value all viewpoints can go a long through discussing an ethical dilemma in 2019, tinyurl.com/wwlo26p way to creating stronger teams. each team meeting, or more informally, for

FM-MAGAZINE.COM April 2020 I FM MAGAZINE I 33 Oluseyi Olanrewaju, FCMA, CGMA, Ph.D., helped lead the training when Nigeria adopted international accounting standards.

Navigating change

One management accountant offers lessons in encouraging shifts in behaviour from his experience with IFRS adoption in Nigeria.

By Drew Adamek

igeria faced significant training were completed, the entire Nigerian developing a standard global accounting and implementation hurdles accounting profession was being asked to language, increasing transparency, as it began adopting the IASB’s quickly adopt entirely new methods and reducing fraud and corruption, and cutting NInternational Financial mindsets. the cost of doing business. However, in Reporting Standards (IFRS). The international shift from local many countries, including Nigeria, the From 2011, when the Nigerian National reporting standards towards adoption of practical reality on the ground was quite Assembly passed a law mandating IFRS, to IFRS was driven by lofty ambitions such as challenging.

PHOTO BY ANDREW ESIEBO/AP IMAGES ESIEBO/AP ANDREW BY PHOTO 2014, when the final stages of adoption increasing foreign direct investment, The move was a sea change for most

34 I FM MAGAZINE I April 2020 Nigerian accountants, who had been and organisations navigate the challenges Making your message as easy to trained in and working with accounting of a major change. understand as possible, without standards that had been set by the complicating or confusing language, goes a now-defunct Nigerian Accounting Encourage participation long way in easing people’s fears and Standards Board, and they had very little Despite being legally mandated, under the boosting their confidence to learn. exposure to international accounting threat of financial penalty, Nigeria’s IFRS “I wrote my book in basic language so standards, according to Lagos-based adoption plan had to first overcome that the typical Nigerian accountant could Oluseyi Olanrewaju, FCMA, CGMA, Ph.D., significant local resistance to change, and relate to it,” Olanrewaju said. Avoiding executive director, finance and executive fears of undue outside influence, according jargon or unfamiliar language also creates a head of department, finance, at Vodacom to Olanrewaju. Like many professional and more personal connection between change Business Nigeria. business leaps into the unknown, there agent and student, allowing for a more Many management accountants are was a tendency to accentuate the negative receptive audience. facing the same type of professional and overlook the benefits, he said. To get disruption that the Nigerian accounting past that reluctance and encourage buy-in, Be patient community confronted when adopting he encouraged participation in the process. Seismic change is difficult, whether it is IFRS. Whether it is technological “Initially the reaction was very adopting IFRS standards or learning a new upheaval, major standards changes, reluctant,” he said. “People were like, ‘Why AI application or an agile way of working, regulatory or political shifts, or business do we have to use IFRS? What’s our and it requires time. Nigeria’s adoption of innovation, management accountants the contribution? I hope they’re not going to IFRS took several years and required world over face increasing pressure to just dump something on Nigeria.’” meticulous attention to ongoing rapidly learn new skills, technologies, and Olanrewaju encouraged Nigerian developments and patience to adjust to standards. accountants to participate in the public those changes, said Olanrewaju. And just like with many of the comment portion of the adoption process Any process to bridge a knowledge gap transformations that management to make sure they felt included. For finance will evolve as it is happening, and leaders, accountants face, change exposed professionals trying to bridge a knowledge as well as learners, will need to adjust on vulnerability. IFRS adoption highlighted a gap, empowering participation gives the fly. Undue pressure will breed significant knowledge gap at the time people a sense of ownership in the process resentment, while patience provides a within the Nigerian accounting and helps ease fears. necessary space and comfort level that community, according to Olanrewaju, people need to learn. who is also the chairman of the CIMA Emphasise the benefits Nigeria Branch Committee. To further boost buy-in to the changes, Lead by example “Apart from the Big Four, that could Olanrewaju showcased the positive Olanrewaju’s efforts to introduce IFRS to draw from their international impacts of IFRS through regular meetings, Nigerian accountants is part and parcel of counterparts to close this gap, practically, education, and examples. By highlighting his broader leadership emphasis on you didn’t see any Nigerian accountants the benefits, both to the organisation and transparency and collaboration. However, that understood what it was when you the individual, you can engender that clarity and leadership need to start at talked about international accounting,” he motivation and stimulate the feeling of the top of the organisation. Leaders must said. “I saw the gap there, and I thought, ‘I reward. embrace the change they are championing, need to close this gap very quickly.’” “People generally are reluctant or averse and be seen doing so, to help others catch At the time, Olanrewaju was well to change whether positive or negative,” he up or keep pace, according to Olanrewaju. positioned to tackle the task. said. “Therefore, the change agent must be Orders without action from leaders just feel He had been working with focused and intentional in actualising the like demands, but when others see you international reporting standards as a CFO objectives, especially where the benefits of engaging with the same knowledge gaps and finance director for several years at the change are enormous.” and challenges, they are more apt to follow, various international technology and So whether it is the extra time for he said. telecommunications organisations within strategic initiatives that artificial “As CFO you must be transparent,” Nigeria while also teaching for decades at intelligence (AI) and robotic process Olanrewaju said. “You must embrace the Nigerian universities. automation may provide to finance tenets of integrity at the highest levels. You To help Nigerian accountants get up to departments, or valuable career experience must lead the way within your organisation speed, he wrote a book in 2012, IFRS PAL gained from working on an agile team, let by example.” ■ — Handy Approach, thought to be the first participants know that the change isn’t just indigenous African textbook on IFRS. He a burden or a risk but a material benefit to was also one of five local instructors them. teaching IFRS seminars to Nigerian accountants, and consulted with Communicate simply and clearly Drew Adamek is an FM magazine individual companies on IFRS integration. Whenever there is a significant change senior editor. To comment on this Olanrewaju offers the following tips, afoot, especially when it impacts people’s article or to suggest an idea for based on his experience with IFRS careers and livelihoods, Olanrewaju another article, contact him at adoption in Nigeria, for finance leaders recommends teaching and communicating [email protected]. and change agents who want to help peers around those changes simply and clearly.

FM-MAGAZINE.COM April 2020 I FM MAGAZINE I 35 Leadership at the negotiating table

The former Deloitte CEO is managing change, and leading a new era, in the US Women’s National Basketball Association.

By Neil Amato

s former Deloitte CEO Cathy said. “We’re betting on the future through watching the leadership you provided to Engelbert, CPA, took on a role this long-term agreement,” she said in the your team, immediately elevates our leading the US Women’s mid-January conference call with the profile across the professional sports A National Basketball players union announcing the deal, landscape,” said player Nneka Ogwumike, Association, her first major, acknowledging the scope of the president of the Women’s National public test was negotiating a labour investment. “Our teams, owners are very Basketball Players Association. agreement with the league’s players. She supportive. But they’re betting as well.” In the months leading up to reaching cleared that hurdle after six months on the The same day the labour agreement was the agreement, Engelbert said she was job when a historic deal was announced in announced, the WNBA made public a relying strongly on relationship-building January. collaboration with three companies, a skills in her new role. In an October The eight-year agreement includes partnership that is one of the ways the article for FM magazine, Engelbert said: higher pay and improved travel league will augment player pay. “One thing that’s very clear to me is accommodation and benefits for players, “Not only are partners providing sports is business and business is about especially those with children. For financial investment, but they are further relationships. So I think the best thing instance, the new deal guarantees players lifting the league and players through that prepared me at Deloitte, especially with children a two-bedroom apartment. marketing amplification and close as I stepped into a number of leadership The league will also have a child-care strategic collaboration,” a news release roles, was how to build relationships, stipend and pay during maternity leave. said. how to nurture the relationships, and Several of the league’s top players can Two of the corporate partners have how to deepen these relationships.” (See make more money in other countries and, been mainstays with the league — AT&T “The Former Deloitte CEO on Career as a result, would play two seasons — one and Nike. The new one, named the league’s Agility,” FM magazine, 24 October 2019, overseas and one with their WNBA team. official professional services provider, is tinyurl.com/ueyc7zs.) ■ Engelbert said on a media conference call Deloitte. that the enhanced benefits are one way the Clearly, Engelbert’s leadership and league hopes to encourage more players to finance background are having an effect prioritise the WNBA amid other on the league, which announced a new, Neil Amato is an FM magazine senior opportunities. The top players are eligible expanded schedule for the 2020 season. editor. To comment on this article or in the coming season to earn more than Even players on the other side of the to suggest an idea for another article, $500,000 in total compensation, and negotiation have praised her value. contact him at Neil.Amato@ average compensation for all players will “To our WNBA commissioner, Cathy aicpa-cima.com.

PHOTO BY BRAD MILLS/REUTERS MILLS/REUTERS BRAD BY PHOTO be $131,000 for the 2021 season, Engelbert Engelbert, recognising you in this role,

36 I FM MAGAZINE I April 2020 Cathy Engelbert, CPA, the commissioner of the US Women’s National Basketball Association, recently concluded a new agreement with the players union that improves pay and benefits, and also signed new sponsorship deals. Leading meaningful change

Technology implementations, diversity and inclusion initiatives, and volunteer service can all succeed when passion is matched with sound business tactics.

By Oliver Rowe

he ability to lead meaningful achieve their short-term and long-term Leaders, she said, also need to look change helps Toronto-based plans and how their strategy might need to outside the business — to measure their finance leader Helen Berhane, be adjusted. company’s performance against that of T FCMA, CGMA, make a difference “I have definitely been enabling competitors or their industry more widely. in her working environment business leaders by making sure they have “You have to know what the market and the community beyond. the right information to make strategic looks like or … have a benchmark that you Berhane is the senior accountant decisions,” she said. can compare yourself to.” running the accounting team at Bridgemarq She uses this approach when producing Real Estate Services Manager Limited, a Leading on technology month-end reports. She said: “I put together wholly owned subsidiary of Brookfield She recently led an enterprise resource the highlights for the overall real estate Business Partners LP, which provides planning system upgrade at Bridgemarq market [for] the biggest markets that we services to a network of more than 19,000 and believes that business leaders “cannot have in Toronto [and] in Vancouver. I give a real estate professionals across Canada. take the chance not to invest in technology”. high-level summary of what the market is She has been a leader across a range of “New companies are starting up all the saying.” businesses — and on two continents. Her time and disrupting the status quo. They career started in the UK with can just take over what your business was Fostering inclusivity pharmaceutical giant Glaxo Wellcome doing … by having better technology and Berhane has a passion for diversity and before its merger with SmithKline Beecham better systems,” Berhane said. inclusion that has been elevated by having a in 2000. In London, she then moved to Automation, she said, enables staff to child who is on the autism spectrum. “It has Deloitte before transferring within the firm perform much broader business analysis opened up my understanding of what to Canada. — to have a better understanding of diversity could look like. … We have to be As a finance manager at Deloitte performance and cost drivers, and improve more accepting and more welcoming [of Canada, she specialised in financial processes. the] different types of needs people have.” analysis and business support, working Finance transformation requires finance Berhane believes business leaders need closely with the national managing and IT to work closely together — to make to understand fully their team’s makeup, partners for consulting and tax divisions sure that customised reports, for example, assess how inclusive their company is, and over her career with the firm. fit the company’s needs, she said. ensure its people take steps to have an She has led businesses and firms But for Berhane, it’s not only about inclusive culture. To drive successful through significant technology changes having the most up-to-date technology. businesses, leaders require diverse teams, and important diversity and inclusion Businesses also need to understand what she said. “By having a diverse team or group initiatives and has served the accounting they want to achieve and which systems of people working in your company, you profession through numerous volunteer would work best for their type of bring in diverse ideas, creativity, and positions, including as the chair of CIMA organisation, she explained. knowledge that can definitely improve your Canada’s board and as a member of the In addition, training staff on new company’s outcome in a positive way.” A AICPA National Commission on Diversity systems is critical to embedding them diverse team can help build business with & Inclusion. successfully in the business, she said. “You diverse clients or customers as well, she At Bridgemarq, she provides financial have to make sure that your employees have added. analysis and business support to company the capacity or training to use the system Research has established that diversity

PHOTO BY DALE WILCOX/AP IMAGES WILCOX/AP DALE BY PHOTO leadership to help them determine how to correctly and efficiently.” correlates with improved business results.

38 I FM MAGAZINE I April 2020 Helen Berhane, FCMA, CGMA, leads the accounting team at Bridgemarq Real Estate Services Manager Limited in Canada.

A 2017 McKinsey study of 1,000 companies Retaining a diverse workforce is also and the Office of the Mayor of Toronto. in 12 countries found that companies in the important, Berhane said. People who feel What started off as a casual friendly top quartile for gender diversity on their valued or included in the company’s game for cricket lovers has become an executive teams were 21% more likely to structure and in an environment that activity that’s integrated into the schools in have above-average profitability than encourages growth are likely to stay longer Toronto and surrounding cities, with a companies in the bottom quartile for and succeed, resulting in better retention popular annual tournament. It’s possible diversity. Companies in the top quartile for rates for companies. because of the support of numerous ethnic diversity on their executive teams sponsors, coupled with the organisation were 33% more likely to outperform their Giving back and coordination you would expect from an bottom-quartile peers on earnings before Beyond her management accounting role, event backed by an accounting interest and taxes. Berhane believes passionately in giving organisation. An inclusive culture is perhaps the more back to the profession. She became CIMA “The volunteerism is really a wonderful important aspect of corporate diversity and Canada board chair after serving as a board way to give back,” she said, “especially in a inclusion, Berhane suggested. “It doesn’t member and branch volunteer. For her profession that has given us the foundation matter what level you’re at or what your role almost two years in that public-facing role for our careers.” ■ is in the company. … It’s definitely very she was the first woman chair and the first crucial to make people [feel] like they are from an African background. included, their opinions [count], or their As chair, she worked closely with the feedback or ideas are recognised.” Institute’s corporate partners and sponsors, Oliver Rowe is an FM magazine senior She said that companies that have who support CIMA Canada’s business editor. To comment on this article or “favourite go-to” recruiters or universities conferences and CIMA’s youth cricket to suggest an idea for another article, from which they usually recruit can programme among Toronto’s diverse contact him at Oliver.Rowe@ consider reaching out to broader audiences communities, in partnership with the City aicpa-cima.com. to hire a more diverse team. of Toronto Parks, Forestry, and Recreation,

FM-MAGAZINE.COM April 2020 I FM MAGAZINE I 39 Building leadership skills through strategic volunteering

Asking the right questions before taking on a volunteer role will maximise your contribution and the leadership skills you can gain.

By Oliver Rowe

olunteering can provide a from university, volunteering can place inclusion and diversity ambassador. She number of benefits beyond accountants in positions to explore co-chaired and spoke at the 2019 AICPA the obvious help it provides to leadership development in a way that may and CIMA Women’s Global Leadership V the community or profession. not be possible in the workplace. Summit in London. Ratnayake has held a Every hour spent in a Jenny Okonkwo, FCMA, CGMA, founder number of volunteer roles including on volunteer role is an opportunity to build of the Black Female Accountants Network the CIMA Canada board before becoming relationships, gain different perspectives, in Canada, and Amal Ratnayake, FCMA, CIMA president in June 2019. and master new skills. CGMA, CIMA president and chair of the This conversation has been edited for One skill that many accountants seek to Association of International Certified clarity and brevity. strengthen through their volunteer roles is Professional Accountants, share in this leadership. Whether they are veteran Q&A how to take a strategic approach to What are your general thoughts on the C-suite executives or first-year volunteer roles. Okonkwo is an importance of volunteer roles?

PHOTO BY DALE WILCOX/AP IMAGES WILCOX/AP DALE BY PHOTO professionals who have recently graduated international keynote speaker and an Jenny Okonkwo: Volunteering is very much

40 I FM MAGAZINE I April 2020 Jenny Okonkwo, FCMA, CGMA, says it is important to volunteer in roles that provide opportunities to learn and grow.

part of the cultural fabric over here in helped me to build leadership skills. It’s a Amal, you’re CIMA president, but you’ve Canada. I myself started the volunteering very different competency set to still had several volunteer roles previously? part of my career when I moved here. It was produce results in an unpaid setting and Amal Ratnayake: I can echo Jenny’s words a great way of expanding, and creating and get that level of cooperation that you on the importance of volunteering. I developing a professional network and also would get in the workplace. It calls for a started volunteering with the CIMA to understand and get an appreciation of different level of skills and a different Student Society in Sri Lanka in the late the finance and accounting landscape. approach. 1980s. When I graduated from CIMA, I People do give a substantial amount of I also more recently have done a started volunteering on the Education and their time in this area. If I talk about my number of speaking engagements and Training Committee of CIMA Sri Lanka. own volunteer work in particular, it has mentoring. I have also been invited by Then more recently, I volunteered with really been focused around professional CIMA Canada to represent it on the AICPA the CIMA Canada board and for some of its volunteering. National Commission on Diversity and committees in Canada. All of that has A strategic volunteering approach has Inclusion. brought me to where I am today as

FM-MAGAZINE.COM April 2020 I FM MAGAZINE I 41 professional skillsets and leadership skills that include communication, Amal Ratnayake, FCMA, accountability, and commitment are CGMA, CIMA president and improved by volunteer work. chair of the Association I can attest to that. My skills of of International Certified motivating and inspiring teams to go the Professional Accountants, extra mile have grown significantly due to says volunteering helps my volunteer work. If you think about it, develop professional and volunteers do what they do because leadership skills. they’re inspired to do so and not because it is their job to do so. As leaders of volunteer teams, you double up those skills of motivating and inspiring others, and that helps you become a much better leader.

Okonkwo: It’s your own growth, and also bringing others with you and seeing them grow and watching them go to their next level. That’s when it’s very rewarding.

What questions does a volunteer need to ask? president of CIMA and the chair of the finance and accounting women’s network Okonkwo: The first one is, what is the Association between CIMA and AICPA. with membership that goes from the organisation looking to achieve? What can If you think about it, the business case C-suite all the way to youth — I bring to the table to help it achieve those for volunteering is very clear. For example, undergraduates on finance and goals, and what am I looking to learn? I volunteer work can help individuals get accounting programmes. Those think it’s important to have that balance. If hired for roles. undergraduates and the members who are you come into a volunteer role where you According to a piece of Deloitte research at the start of their careers now have access know absolutely everything, it may not be that I read recently [see “The Two-Way to senior managers and leaders. And that as fulfilling an experience as it could be. Benefits of Volunteer Roles”, FM magazine, can absolutely help them in terms of It’s always good to try and leave some 29 January 2018, tinyurl.com/ud27cyd], mentoring, career advice, and career room for learning. 30% of the CVs that come across the desks pathway clarification. Coming in with some skills and of those influencing hiring positions Having access to those leaders also competencies that the organisation needs mention volunteer work — candidates’ provides opportunities for support from is always a great way to start because it volunteer work. A total of 82% of those sponsors. For instance, if you were looking brings confidence. It means you’re able to surveyed said that they would be more for a promotion or to be considered for a make an immediate contribution and at likely to choose candidates with volunteer project at work and you hadn’t yet had the the same time find out if there are experience. chance to demonstrate some of the role opportunities where you can learn and It goes even further than that because prerequisites within your workplace, grow further and also where you can 85% of those surveyed said they would be volunteering gives a senior leader an influence others. prepared to overlook some CV weaknesses opportunity to vouch for your work should As volunteering is the investment of for those that have volunteer experience. you be looking for another role either one’s personal time on an unpaid basis, It’s therefore very clear that inside or outside of your company. you want to feel that you’re able to volunteering can also help you on your Then the other side of it, of course, is if completely contribute to the mission, career journey. you have demonstrated or had the vision, and core values of that opportunity to develop a particular skillset organisation that you’re volunteering for. How can volunteer roles help your or competency within your volunteering At the same time, you would want career while at the same time allowing space, you can transfer it right back into complete alignment with the vision, you to make a contribution beyond your the workplace and add value to your mission, and core values from your own day job? company’s goals and objectives. This is personal perspective for it to work. ■ Okonkwo: The expansion of one’s why it’s seen as absolutely critical by many professional network has never been more employers, too. important. What professional volunteering

does is give you access to those influencers Ratnayake: I think volunteering also really Oliver Rowe is an FM magazine senior and decision-makers that you wouldn’t helps you expand your network. It helps editor. To comment on this article or necessarily have access to. you develop new skills sometimes or to suggest an idea for another article, For instance, the organisation I expand skills that you already have. In fact, contact him at Oliver.Rowe@ founded in 2016, Black Female research shows us that nine out of ten aicpa-cima.com.

PHOTO BY FIONA HANSON/AP IMAGES HANSON/AP FIONA BY PHOTO Accountants Network, is a professional influencers of hiring decisions believe that

42 I FM MAGAZINE I April 2020 Islamic Finance: A different perspective on global business

Uncover a world of possibilities in a trillion-dollar industry. Learn more about the award-winning CIMA ® Islamic Finance qualifications. cimaglobal.com/islamic-finance

© 2020 Association of International Certified Professional Accountants. All rights reserved. CGMA and Chartered Global Management Accountant are trademarks of the Association of International Certified Professional Accountants and are registered in the United States and other countries. The Globe Design is a trademark owned by the Association of International Certified Professional Accountants. 2001-23377

2001-23377_1911-86011 CGMAStore Islamic Fin FM ad.indd 1 2/5/20 3:51 PM You didn’t get the promotion. What now?

The sometimes-public failure of missing out on a new job is by no means career-ending. Here’s how to learn from the situation and bounce back.

IMAGE BY ANDREW BAKER/IKON IMAGES BAKER/IKON ANDREW BY IMAGE By Rhymer Rigby

44 I FM MAGAZINE I April 2020 ew things are more frustrating Ask for training and even a coach. If your detailed, professional profile that conveys than interviewing for a new job employer doesn’t routinely provide formal the message you want people to hear — and and not getting it. But when you coaching, consider hiring a personal coach. is updated regularly. Fgo for an internal promotion and Take a strategic look at your career, address don’t get it, the situation can be any weak spots, and start actively planning Consider leaving your organisation worse and far more complicated. How do for the next opportunity when it comes up. Sometimes the reason you didn’t get you bounce back from what can be a public promoted is simple, if unpalatable. You may failure — and get your career back on track? Clear the air not be a good fit for the organisation. You It is likely that you’re going to feel angry If you have to work with the person who did may also decide that, having been passed and disappointed. In the short term, you get the promotion, make it known to that over for this position, there is now nowhere must not overreact. Do so, and you show person that, although you wanted the job, for you to go — and this is a particular the decision was the right choice. Instead, you recognise the need to have a good, problem in small companies. In both cases, thank whoever tells you the news and go for productive working relationship. This can the solution is to start looking for a walk or a coffee if you feel that it’s likely be difficult if the person in question is a opportunities elsewhere. In a large you’re going to say something rash. Once former colleague, and doubly so if you company you may be able to apply for you’ve gotten over your initial frustration, believe you were a stronger candidate. internal positions in different business recognise that you will feel disappointed However, being constructive and units or in different locations. and perhaps even bitter and resentful. If supportive will look far better than being you do need to vent or rant, do so to a churlish and sulky and trying to undermine Consider staying trusted friend or spouse, not a colleague. the person. Sometimes your company chooses the Get it out of your system. wrong candidate. They might have done so Take a fresh look at your network for political reasons, because favouritism Your next moves, step by step Both inside and outside your organisation, has come into play, or simply because they Try to make sure it doesn’t you want to be in contact with people who made a bad decision. In this case, you might happen again will bring interesting opportunities your consider hanging around for a few months Once you’ve had a day or two to process way. In a large organisation, this might to see if the decision turns out to be a what has happened, speak to those who mean putting yourself in places that bring disaster. Don’t hang around too long, made the decision. Explain that you’d like you into contact with other departments or though. When you’re waiting for people to some feedback. Do not go in saying that it’s involve travel to other locations. In a come to their senses, it is easy to let weeks unfair. Instead, you might say, “I really smaller organisation, it could involve become months and months become years. wanted that promotion, and I’m keen not to attending conferences, joining industry Give yourself a hard deadline, after which miss out next time. Could you tell me how associations, and generally being more you accept things aren’t going to go your me how far off I was — and what was outward facing. way and leave. missing from my CV? What did the successful candidate have that I didn’t?” Raise your profile online Taking a chance Encourage the other person to be as honest Use social networks like LinkedIn and Going for internal promotions is a risk. Fail as possible. You may have assumed that you Twitter. Show people what your skills are to get a job elsewhere and it’s likely nobody were a shoo-in for the job when, in fact, you and make contacts, both in your industry will know. Fail to get a job at your business were miles off. In a related vein, people and in related industries. Start and everyone will know. But sometimes sometimes don’t prepare properly for conversations. When you post articles, you this can be good thing, because it tells internal interviews because they assume want to alert people to interesting everyone that you’re ambitious. ■ the interviewer knows everything about information that will be useful for them. them. If either of these scenarios applies to When you get more comfortable, offer your you, you’ll want to know. opinions — try to come up with fresh takes and unexpected angles, and talk a bit about Rhymer Rigby is an FM magazine Continue working on looking yourself, too. People who use social media contributor and author of The promotable well often position themselves as Careerist: Over 100 Ways to Get Tempting as it is to be sullen and do the influential experts in their fields. The very Ahead at Work. To comment on this bare minimum, you need to bounce back best will become known beyond their article or to suggest an idea for and reboot yourself. So, approach your job industry and may even gain mainstream another article, contact Neil Amato, afresh and ask yourself what you can do media exposure. At the very least, you an FM magazine senior editor, at better. Seek out experiences that will boost should ensure that anyone who does a [email protected]. your CV, and volunteer for new projects. Google search for your name will find a

FM-MAGAZINE.COM April 2020 I FM MAGAZINE I 45 Using XBRL and big data to impr IMAGES BY GRUNDINI/IKON IMAGES GRUNDINI/IKON BY IMAGES

46 I FM MAGAZINE I April 2020 o improve decision-making

A subsidiary of the China National Petroleum Corporation has tagged its way to better forecasting and business results.

By Yanchao Rao, Bing Leng, Xiuping Mu, Chao Li, Xiaofeng Hu, and John Turner

n recent years, the Chinese domestic petroleum market has been dealing with oversupply, resulting in I decreasing industry profits. Oil companies have been facing fierce competition and unprecedented operational pressures. Increasingly, oil companies have turned to management accounting to increase operating profits and add enterprise value. The China National Petroleum Corporation (CNPC) is one of the companies affected. Its subsidiary, the CNPC Hubei Sales Company (the HSC), which has increased its operating profits and enterprise value by harnessing extensible business reporting language (XBRL) and big data, offers a case study into how management accountants can utilise valuable data assets.

FM-MAGAZINE.COM April 2020 I FM MAGAZINE I 47 The HSC took advantage of XBRL in Factors leading to successful cross-platform and heterogeneous systems to share and integrate data at implementation the enterprise level and to support decision-making in areas including daily Implementing a big-data-led transformation operations, market prediction, asset using extensible business reporting language evaluation, cost control, investment, and (XBRL) was achieved with executive leadership risk identification. and a cross-functional approach at the China The CNPC HSC, a state-owned National Petroleum Corporation’s Hubei Sales enterprise, is responsible mainly for Company (the HSC). The following factors led to building a sales network to sell CNPC the project’s success. refined oil products in Hubei province. The HSC also organises oil procurement, Government support and guidance transportation, storage, and wholesale and Since 2010, the accounting department of the retail transactions. Ministry of Finance has actively supported XBRL The HSC has 824 petrol stations and 13 implementation in China. It has introduced the oil depots in operation, and annual sales XBRL specification and has developed, have increased from 6,300 tonnes to 3.51 published, and maintained a taxonomy for China million tonnes over 18 years, achieving the Accounting Standards, as well as extension objective of occupying one-third market taxonomies for specific industries and specific share by sales volume with around 20% of regulatory requirements. the petrol stations in the area. To increase sales, the HSC has Top management emphasis previously put a lot of resources into The HSC’s top manager emphasised the promotional marketing activities, the importance of the project, helping to smooth effects of which have been difficult to implementation and making it easier to get the human, material, financial, and evaluate. For a long time, management other needed resources. accounting has been limited to traditional quantity analysis, forecasting, Project team cooperation performance, and incentives. The HSC also The HSC’s XBRL project team was led by the company’s CEO and CFO. The has 21 additional and heterogeneous financial department and information department were jointly responsible for the information systems with decentralised project. The project team cooperated very closely across the core project team and data storage and nonstandardised and across internal departmental “silos”. inconsistent data, which had hindered further data integration. Manager-driven implementation plan To meet new decision-making The project plan was clarified and appropriate and was supported by information requirements, the HSC built a different-level managers. The HSC began with the most difficult challenge faced new management accounting system that by middle-level or tactical-level managers (the core business line leaders). After could process big data (see the sidebar, achieving significant, recognised results, the middle-level managers helped to “Factors Leading to Successful push the potential for related achievements to top managers (strategy-level Implementation”). manager, chief-level manager). After receiving recognition from top managers, The HSC established a financial control the project had a powerful driving force and enough resources to improve and system that has integrated financial maximise the project’s potential benefits. accounting, fund settlement (the transfer of funds from buyer to seller and the Meeting internally driven needs transfer of an asset’s title from seller to The XBRL project was involved in almost all elements of the business. This helped buyer), and operational budgeting and the business department grasp the operational and management trends control. The financial shared services accurately, locate the risk points quickly, embed risk prevention and control center (FSSC) is responsible for the procedures in all business processes, and support compliant and efficient system’s data classification, processing, operation. All these were internally driven needs of the enterprise and were highly calculation, and quality control. recognised by all business units. XBRL and big data solution Controlled costs XBRL is business reporting markup The cost of the project was less than 10 million RMB ($1.5 million) and was language. The standards are developed and controlled to be lower than for an ordinary information system project, which managed by XBRL International and are usually costs almost 30 million RMB ($4.5 million) or even more. This currently used primarily for the definition increased the total profits of the HSC, which further increased support and exchange of business and financial amongst the top managers. information. It has been widely used for financial reporting of detailed (“tagged”)

48 I FM MAGAZINE I April 2020 aggregate disclosures from regulated platform based on Hadoop/XBRL. The companies to regulators. This traditional XBRL database is built using a relational use of XBRL is well established in China as and in-memory database. It is based well as the rest of the world. Nearly 150 on XBRL multidimensional data securities, tax, banking, insurance, characteristics, with object-oriented data statistics, and business regulators mandate storage to complete the calculation and its use in about 70 countries. Whilst more processing, and uses open source Hadoop than 20 million companies use XBRL for architecture for distributed computing to this kind of financial, performance, risk, solve the XBRL and big data storage and compliance reporting to external challenges and operational efficiency authorities, the number of companies issues. taking advantage of this sort of The new shared data platform standardisation of data inside the integrates the enterprise internal systems enterprise has been extremely limited. with external correlated data, cleaning The idea behind the HSC’s project is to and transforming so far 1.8 billion trading implement use of XBRL for internal data points. Internal systems included management reporting to structure and the financial system, main business standardise heterogeneous data within system, investment assets system, and enterprises — utilising big data to ensure materials purchasing system. The businesses are equipped for the digital age. externally correlated data was extracted The HSC launched the XBRL and big from communications data, tax data, data project to explore the transition path weather data, and other sources. Data for management accounting in an internet extracted from internal and external and cloud computing environment. systems is tagged using business model, used to illustrate the concept of overall By using XBRL’s technical standards, the index model, element model, or quantitative characteristics. Dimensions HSC aimed to establish a unified data analytical model concepts within a model are used to specify the analysis attributes platform and a unified standard index layer, and then waits to be called by the or characteristics for combining or system, and to build a digital enterprise service layer. Associating highly granular subdividing indicators’ values. At that with data-driven scientific management (including transaction-level) data point the XBRL index system could finally and intelligent decision-making with the observations with these detailed — and be determined. involvement of innovators from across the connected — definitions, in an enterprise More than 2,000 metrics and 23 business, connecting past, present, and standardised and systems agnostic dimension items were defined from more future. format, is key to the design of the system. than 15,000 report items in 341 internal By using XBRL to tag data, the project The platform implements data reports, making the underlying data breaks each type of business data free from connectivity in a two-way flow to achieve fine-grained, consistent, and flexible. specific software vendors and product the data analysis of user-driven cloud restrictions, establishing a standardised, services. At present, it can provide a Easy to use self-describing, private data cloud with a calculation engine, standard services, an The XBRL taxonomy for this system uses connected semantic information database. index service, reporting services, analysis a language that can be understood by By using XBRL and big-data-based services, budget control, parallel business users easily. By using the management accounting information, the computing, and cache services, which can same business language as typical project also aimed to expand the be accessed by a statement reporting human-computer interactions, it shields information available to cover internal program, statistical query program, mobile the financial and business staff from the management, customer behaviour application, or data mining tools. technical complexity of both XBRL and management, and responsibility centres the underlying IT systems. The interface management, digging deeper into the Unified data standard system of the XBRL index system is concise, and value of data. To achieve automatic data interaction in through the Excel plug-in and function, The financial control system and the the new unified data shared platform, it nontechnical users can quickly select a other 21 disparate information systems in was essential to standardise the data. target, define custom analytics, and use at the HSC could provide a large The HSC standardised its internal data update the data without having to amount of management accounting and its external correlated data in understand technical details such as information, but the data is scattered accordance with the XBRL standards XBRL syntax or underlying SQL repository through all the systems in different technology and created its own practice structures. formats with significant noise and error, methodology to standardise data using At the same time, the system uses meaning it needs cleaning to be converted XBRL. methods of web-based graphical analysis into valuable data. In this standardised process, data was so the company’s upper-management Therefore, it was necessary to set up an collected and sorted, real elements were users can utilise big data analysis and automatic interactive mechanism within identified and tagged, dimensions and forecast results intuitively, making it easy the existing system. indicators were identified, and the to understand comprehensive figures that The HSC set up a new shared data directory was structured. Indicators are assist with management decision-making.

FM-MAGAZINE.COM April 2020 I FM MAGAZINE I 49 Project effectiveness from the risk of oil losses, including volume and price changes to determine Value in data analysis from abnormal pump behaviours. All the price sensitivity of different types of The HSC has built a multidimensional these risks can be differentiated for every sites. Finally, the time series method is data cube that is tagged using XBRL. The single station, single fuel nozzle, single used to predict sales volume on a daily, data cube is a model that can be used to fuel tank, and each deal, and could monthly, and annual basis. Based on all evaluate the aggregated data from a support responsible units to deal with these analyses, potential critical factors variety of viewpoints and analyse the data the related risk rapidly. For example, on for increasing sales are identified. separately to discover the underlying 6 April 2016, the system notified a petrol cause of business-transactions-related station branch that No. 4 tank 93# had a Value in customer management operations and their results. petrol loss of 107 litres, a suspected spill. Through the project, the HSC studied After tagging the transaction-level The branch immediately took measures customer transaction data, dividing data with XBRL concepts, the HSC could to deal with disposal and repair, customers into high-value, low-value, quickly find certain petrol stations’ effectively reducing the risk of loss. stable, important potential, retained, discount exceptions, abnormal price etc., and analysing them from multiple periods, the cost of each discount Value in budget management dimensions such as their trading promotion activity, and so on. It could By combining XBRL with big data, the frequency, trading, purchase amount, penetrate data freely through various HSC is making full use of internal and purchase price difference, and stability. organisation layers, trading hours, sales, external data sources. It uses dynamic They then regularly updated their product categories, promotional types, management models to balance quantity marketing and sales departments with and any other dimensions that have and efficiency within a single station’s dynamic customer information so staff been defined, to access the value of customised forecast model. could adjust product structure and transaction-level data from the system. For example, in the single-station fuel marketing strategies and deliver In addition to providing enhanced data nozzle prediction process, a range of promotions effectively. mining that yields significantly more business data was used to determine timely and effective analysis for clusters of similar types of petrol A worthwhile endeavour decision-making, the integration of data stations. Data gathered included the It’s clear that the XBRL-powered big standards across professional lines location of the station, station traffic data analysis system has provided ensures more accurate and more flow, station incoming rate, ratio of numerous benefits to the HSC. compliant data. petrol-to-diesel sales, customer group Improvements have been made in characteristics, and other elements, all of operations as well as management of Value in risk management which were then analysed using cluster risks, budgets, and customer focus. In The HSC designed an early-warning risk analysis and machine learning methods. this highly competitive industry — and mechanism by using XBRL technology Then a multiple linear regression in any industry — data-driven and a machine learning model that could method was used to study the management can increase revenue and help identify hidden risks, pre-detect relationship between volume and price profits while providing indisputable potential risks in station-level sales, and changes to determine the price evidence that it’s delivering the value help control risk effectively. The model sensitivity of different types and clusters management seeks. ■ works by combining massive amounts of of stations. Finally, the time series transaction data from the station-level method was used to predict the daily system and fuel system, with business sales volume, monthly sales volume, and experience and knowledge of past annual sales volume. problems. Since the new budget model has been It provides real-time tracking to send in operation, the difference between Yanchao Rao, Ph.D., is an associate risk warnings, including of the risk of fuel predicted and actual volume has been professor at Shanghai University of card fraud and risk of transport-related 3.12%, 1.67 percentage points lower than Finance and Economics; Bing Leng is oil loss, as well as the risks to inventory the difference between predicted volume director of a division in the Accounting using traditional methods and actual Regulatory Department of the Ministry volume in 2016. By using this model, 37 of Finance of the People’s Republic of petrol stations with stagnant sales China; Xiuping Mu, MBA, is CFO of Resources exceeded their target of more than 1,874 China Petroleum Engineering Co. LTD; tonnes in the first half of the year, an Chao Li is a partner at PwC Consulting CIMA members increase of about 65 tonnes per station in Beijing; Xiaofeng Hu is the director Data Analysis Fundamentals over the same period in the previous of the XBRL Business Division at Certificate, tinyurl.com/rutzk4e year. This was accomplished by Pansoft; and John Turner is the CEO of clustering stations by location, station XBRL International. To comment on traffic flow, station incoming rate, ratio AICPA members this article or to suggest an idea for of petrol to diesel in sales, customer another article, contact Ken Tysiac, Analytics and Big Data for group characteristics, and other FM magazine’s editorial director, at Accountants, tinyurl.com/yamk7ssg elements. A multiple linear regression is [email protected]. used to study the relationship between

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© 2020 Association of International Certified Professional Accountants. All rights reserved. CGMA and Chartered Global Management Accountant are trademarks of the Association of International Certified Professional Accountants and are registered in the United States and other countries. The Globe Design is a trademark owned by the Association of International Certified Professional Accountants. 2001-23377

2001-23377_1911-86062 CGMAStore IFRS Cert FM ad.indd 1 2/5/20 4:28 PM

Converting dates to and from US format in Excel

Working with a spreadsheet from a country where the date format differs from yours can cause real problems. Here’s how to fix them.

By Liam Bastick, FCMA, CGMA

ates can be awkward in Excel. such as those shown in the screenshot List of dates The most prevalent format “List of Dates”. worldwide is Day-Month-Year I have left the data in “General” style D(DMY), but not all countries deliberately so you can see only one entry, follow it. One such country you cell A4, is recognised as a number (date). might have heard of that differs from this The problem is, even that’s wrong as that “standard” is the US, where it is represents 5 December 2022, not 12 May commonplace to use Month-Day-Year 2022. (MDY). How do I convert it? We could use Why should accountants care about Power Query/Get & Transform — but the way dates are formatted in different that’s not really what this article is about. countries? Speaking from personal There is an easy way in Excel — but first, experience, I remember one project let’s start with a hard way. manager was nearly fired after he In the screenshot “List of Converted thought the deadline was 1 March 2015 Dates”, I have managed to fix the issue: when it was in fact 3 January 2015. This See? Easy. Oh, sorry, I didn’t display the is the danger of 1/3/15, for example. formula I used to do this in the image. To show you how to overcome this Here it is for cell C2: problem, I will illustrate with converting US dates to what is often known as the =VALUE(MID(IFERROR(TEXT(A2,”d/m/ “European” date format. Now, I know yy”),A2),FIND(“@”,SUBSTITUTE many readers would prefer this to be the (IFERROR(TEXT(A2,”d/m/yy”),A2), other way around. I apologise, but I am an ”/”,”@”,1))+1,FIND(“/”,SUBSTITUTE Australian Brit with the appropriate (IFERROR(TEXT(A2,”d/m/y”),A2),”/”,” regional settings on my machine, and it’s @”,1))-FIND(“@”,SUBSTITUTE(IFERROR a little awkward to perform screenshots (TEXT(A2,”d/m/yy”),A2),”/”,”@”,1))-1)& that way. Don’t worry though — just ”/”&LEFT(IFERROR(TEXT(A2,”d/m/ follow me in reverse. yy”),A2),FIND(“@”,SUBSTITUTE The problem becomes significant (IFERROR(TEXT(A2,”d/m/yy”),A2), when you receive date data in a ”/”,”@”,1))-1)&”/”&RIGHT(IFERROR spreadsheet that is not recognised by your (TEXT(A2,”d/m/yy”),A2),LEN(IFERROR regional settings — or worse, actually is, (TEXT(A2,”d/m/yy”),A2))-FIND like my unfortunate project manager, (“/”,SUBSTITUTE(IFERROR(TEXT mentioned above. For me, my computer (A2,”d/m/yy”),A2),”/”,”@”,1)))) cannot make sense of US date formats Any questions? IMAGE BY ALICE MOLLON/IKON IMAGES MOLLON/IKON ALICE BY IMAGE

FM-MAGAZINE.COM April 2020 I FM MAGAZINE I 53 I have provided the formula List of converted dates List of copied dates because I am frustrated by the number of times I have read on the internet that this is not possible formulaically. Rubbish. You would just be a little insane to do it that way. I won’t explain this formula. Suffice to say it only works for converting US dates to European dates; the text strings are delimited with “/” and do not contain “@” in the text string. If you want the conversion to go the other way, simply replace d/m/yy in all instances above with m/d/yy. Having said that, I think we are all agreed we need another — simpler — way. Let’s start again. Back to the original data, I make a copy in cells Text to Columns C2:C11, as shown in the screenshot “List of Copied Dates”. Please note that while the column on the right has the header “Converted”, the dates on the right are not yet converted. I do this so I may retain the original data (it’s always best to keep a copy in case you make a mistake). Next, I highlight cells C1:C11 (including the header) and click Text to Columns in the Data Tools group of the Data tab of the ribbon (or type Selecting the Delimited option Alt+A+E), as shown in the screenshot “Text to Columns”. This generates the Convert Text to Columns Wizard dialog box. In Step 1, choose the Delimited option and click Next, as indicated in the screenshot “Selecting the Delimited Option”. This means the data will be split into columns based upon a specified delimiter. Except we are going to cheat and not do that. In Step 2, uncheck all delimiters and then click Next, as shown in the screenshot “Unchecking All Delimiters”. Now we come to the step that we actually want. We don’t use the Text to Columns feature to split data into separate columns. No, I want Excel to recognise my data as dates. In this final step, select the Date: option in the Column data format and choose the date format that matches the data as it currently is — not what you want it to be, as shown in the screenshot “Picking How Excel Should Read Dates”. You are asking Excel to recognise it. In my case, the data is in Month-Day-Year format (MDY), so this is what I selected. Once you have

54 I FM MAGAZINE I April 2020 Unchecking all delimiters Final list of converted dates

chosen, click Finish and you will see the original MDY dates listed in the DMY style, as shown in the screenshot “Final List of Converted Dates”. I think you will agree this is far simpler than the formulaic approach and, more importantly, works for all date scenarios — as long as the original dates are formatted consistently. As you keep working with dates, you Picking how Excel should read dates will appreciate more and more the need for consistent dates — and the fact that they really aren’t that difficult to manipulate once you know the tricks. ■

Liam Bastick, FCMA, CGMA, FCA, is director of SumProduct, a global consultancy specialising in Excel training. He is also an Excel MVP (as appointed by Microsoft) and author of Introduction to Financial Modelling. Send ideas for future Excel-related articles to him at [email protected]. To comment on this article or to suggest an idea for another article, contact Jeff Drew, an FM magazine senior editor, at [email protected].

FM-MAGAZINE.COM April 2020 I FM MAGAZINE I 55 INSTITUTE NEWS

CIMA president speaks at Warsaw welcome for Sri Lanka and India events members and students

uring his visit to Sri Lanka in January, CIMA President and nstitute Deputy President Nick Jackson, FCMA, CGMA, DChair of the Association of International Certied Iwelcomed new CIMA members and recognised high- Professional Accountants Amal Ratnayake, FCMA, CGMA, achieving students at the annual ‘’“— CIMA Awards Night and spoke at a dinner for Institute members and at a large-scale Christmas Party in Warsaw in December. graduation event at Colombo’s Bandaranaike Memorial Jackson told members and students: “We’re more than International Conference Hall. Later in January he met accountants. We need to be much more in the era of digital. … It’s members and spoke at a CIMA graduation event in Bangalore, really important that we recognise the evolution of our institution in southern India. so that we thrive into the next “’’ years — not just thinking what At an Oracle CFO roundtable in Sri Lanka, Ratnayake described it was but what it will be.” how the role of nance is being reimagined, using examples from He was joined by other guests of honour: the UK’s ambassador his role as CFO at The O†cial Community Corporation, a to Poland Jonathan Knott, FCMA, CGMA (see “Relationship- Canada-based online event-driven brand management company Building Advice From a Career Diplomat”, FM magazine, Dec. for established recording artists. ‘’“—, tinyurl.com/wŸvl¡¢a); and Marek Szydlowski, vice-chair of He said that disruption need not be intimidating: “In fact, with the American Chamber of Commerce in Poland. CIMA and the Association at the helm, CFOs … are better positioned to embrace change and lead our businesses, organisations, communities — and Sri Lanka — to prosperity.” Finance Transformation: Ratnayake met with the governor of Sri Lanka’s central bank, The Human Perspective professor W.D. Lakshman, D.Phil. Their discussion included how nancial literacy could be enhanced in Sri Lanka, and CIMA sing a global survey and case studies of good practice from initiatives to ensure its members stay relevant in the era of rapid Uleading global organisations, joint research by the technological change. Association of International Certied Professional He also spoke to more than ‘’’ students at Sri Lanka’s largest Accountants and KPMG International looks at whether, in an CIMA tuition provider, Wisdom Business Academy in Colombo, increasingly digital world, the people perspective is being and met leading employers. neglected as businesses transform their nance functions. On “” January, Ratnayake rang the Colombo Stock Exchange The research — Finance Transformation: The Human Perspective bell to open the day’s trading and as a mark of CIMA’s centenary. — involved ”¥¡ senior nance and HR professionals from ¦¦ countries. It can be read at tinyurl.com/rdexsnŸ. The CGMA Competency Framework

he Association of International Certied Professional TAccountants has recently published a guide to using the updated ‘’“— CGMA Competency Framework and spreadsheet tool, together with explanatory videos to implement competency improvement. The updated CGMA Competency Framework expanded the previous four skill areas to ve: technical, business, people, leadership, and digital. It is designed to help employers and nance CIMA President Amal Ratnayake rings the opening bell at professionals understand the knowledge and skills needed for the Colombo Stock Exchange in Sri Lanka on 16 January to management accounting roles. mark CIMA’s centenary. The guide, tool, and videos can be found at tinyurl.com/rzksse¥. PHOTO BY BENIL MARCUS BENIL BY PHOTO

64 I FM MAGAZINE I April 2020 FMMAGAZINE.COM April 2020 I FM MAGAZINE I 65

Institue News - CIMA - ROW.indd 64 3/4/20 9:22 AM CIMA members receive awards

arpreet Virdee, ACMA, CGMA, managing Hdirector of Capita’s Polish operations, has been awarded an OBE in the Queen’s 2020 New Year’s Honours List, predominantly for his charitable work as trustee for the City Sikhs Foundation. Founded in 2010, City Sikhs is a network for British Sikh professionals with more than 7,000 members. Martin Roberts, FCMA, CGMA, Ph.D., has received a Sheffield Hallam University Vice Chancellor’s Award Important changes to for Inspirational Teaching for his work as senior Members in Practice Rules lecturer in accounting and finance at the university. The vice-chancellor’s award is made to individuals IMA’s Members in Practice Rules have changed. The updated rules came who have been awarded three times Inspirational Cinto effect on 1 March 2020. Please see the Members’ Handbook Teacher of the Year — a student-nominated and (available at tinyurl.com/sfr8u7r) for a copy of the rules and further independently judged award that Roberts won in information. 2013, 2015, and 2019.

Why have the rules been updated? Anti-money-laundering supervisory bodies, such as CIMA, have been informed by the Office of Professional Body Anti-Money Laundering Supervision that they must improve the effectiveness of their supervisory processes. Updating the Member in Practice Rules is part of that work. The changes will impact all members working in practice, as well as any members providing accounting services, even though not registered as a member in practice. Updated CPD regulations In the past, CIMA has sometimes found it difficult to take swift or effective steps to deal with the small number of noncompliant members. The changes have now come into force to the rules are designed to streamline and strengthen CIMA’s regulatory powers, enabling it to give better support to the great majority of members n the February issue of FM, members were who work within the rules. Inotified of the upcoming changes to the Members who do not comply pose a risk to the public and harm the regulations governing CPD. These changes came reputation of all CIMA members. For members to retain the confidence of the into force on 1 March 2020. public, it is vital that CIMA has regulatory processes that are fit for purpose. All members are required to undertake CPD, which is an important part of the guarantee of What are the key changes? professionalism that CIMA membership imparts. To Rules 6 and 8 set out the key regulatory requirements for members in practice. ensure that our CPD monitoring remains robust, fair, Should a member not meet those requirements, we will notify them that they and targeted, Regulations Part 1 13 – 18 (which have a further 28 days in which to comply. Under the new rules, failure to govern CIMA’s CPD monitoring requirements) have comply within that timeframe could result in one or more adverse been updated. consequences: So that you are aware of the changes and how they y Cancellation of a member in practice application or renewal application; impact you, please read the updated Regulations and y A fixed financial penalty; further guidance in the Members’ Handbook y Suspension of the member’s practising certificate; and (available at tinyurl.com/sfr8u7r). y Referral into CIMA’s disciplinary procedures. Undertaking CPD and being monitored for Any member whose practising certificate is suspended or withdrawn must compliance is what sets professional accountants immediately stop holding himself or herself out as a member in practice and apart from the unqualified or unregulated. Please using the Institute’s logo. ensure that all your contact details are up to date with Under Rule 2, as a result of changes to the AML legislation, offering Trust or CIMA so that we can contact you should you be Company Services has been added to the list of activities included in the selected for CPD monitoring. If you are selected, you definition of accounting services. Any members offering such services will be must submit your record to CIMA using the required to register as members in practice. Competency and Learning website (available at CIMA’s Members in Practice Panel was consulted on the changes, which tinyurl.com/rl4ecam) or confirm you work for an were then approved by CIMA’s Professional Standards Committee. accredited employer (visit tinyurl.com/svhpgwy). ■

FM-MAGAZINE.COM April 2020 I FM MAGAZINE I 65 Teeming with tourists

vertourism, in which excessive numbers of visitors to a city or attraction lead to crowding, environmental degradation, and fading cultural heritage, is a complex issue that involves everyone in the O tourism and hospitality supply chain. From Peru’s Machu Picchu to Bali and Barcelona, local governments, businesses, and residents have realised that better management of resources is crucial. It is a prevailing theme that will continue as low-cost flights, an expanding global middle class, and social media that highlights “untouched” sites converge to intensify a yearning for travel.

Venice has been identified by the European Parliament to be in a state of overtourism, which puts pressure on the city’s infrastructure even as it scrambles to respond to more frequent flooding. PHOTO BY REUTERS BY PHOTO Integrated Planning delivers fast, agile Budgeting and Forecasting that pivots in Real Time

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