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Increasingly Global Economy Makes Finance Diversity Critical

By Melissa J. Anderson

Recently the Association of Chartered Certified Accountants released a report on the importance of diversity on finance teams. Helen Brand, Chief Executive of the ACCA, explains that as companies become more complex and new global markets become increasingly important in the corporate space, diversity is critical for high performing teams. She writes:

“Increasingly ACCA sees an evolving and broader role for CFOs and the finance function, as they seek to transform the finance function to drive efficiencies in finance operations, ensure greater governance and control, and provide the organisation with financial insight to support superior business decision making.”

According to the organization, the role of the finance department is becoming much broader and more strategic. As such, the profession must work to recruit and retain individuals with more diverse experiences and voices.

Global Marketplace

Brand goes on to say that new perspectives are needed in the finance department. She writes:

“This concept of diversity goes far beyond ‘equal opportunities’, considering more broadly how leading businesses can develop a finance function that has a diversity of skills, experiences, cultural understanding and business perspectives needed in the global economy today, as well as outlining the business case for doing so.”

Today, multinational companies are viewing emerging markets as centers for growth and profit, expanding offices and developing strategies to grow business in areas that may be new for them. As such, the demographics of finance teams must reflect this new diverse strategy for success. The report says, “In the global finance function, CFOs and their finance function must embrace the diversity that comes from operating across geographies and cultures and leverage this for positive outcomes.”

It continues, “This exposure provides finance leaders with different insights into the challenges, issues and opportunities at national, regional and global levels as well as providing better understanding of the difference and nuances between emerging and mature markets.”

Similarly, the responsibilities of the finance team are becoming more diverse. “Today’s CFO needs to balance their traditional custodial and operational responsibilities with their need to support the business as a strategic voice and partner. Today’s CFO needs to bring a greater diversity of skills to the table to be effective.”

As leaders prepare the next generation of finance professionals, they need to be sure they are positioned to succeed in a much more multidimensional role than it has been in the past.

Multicultural Competency

Recent expert panels assembled by ACCA and the UK’s Economic and Social Research Council in three cities around the world (Delhi, Shanghai, and London) confirmed the importance of a multicultural competency. Writer Alison Maitland produced a report on the proceedings, and globalization was a significant factor for discussion.

She explained how differing views on the business case for diversity were presented in different cities. In Delhi, speakers began with the assumption that diversity was a critical factor – that without it, businesses would be harmed. Maitland wrote:

“Some of our panelists in Delhi viewed diversity as a sine qua non that would distinguish successful from unsuccessful businesses. ‘Diversity is not about innovation, diversity is about survival. It’s not a luxury. It’s essential staple thinking,’ said one panelist. Another added: ‘Growth will come only when you accept [diversity], and it has to be the starting point.’”

On the other hand, in Shanghai and London, panelists were more focused on how the “business case” should be positioned.

“In Shanghai, there was a push for putting a monetary value on the business impact of having more diverse teams. By contrast, a panelist in London warned of the risk that dwelling too heavily on the business case, when it may be hard to measure direct cause and effect, becomes an excuse for doing nothing about diversity.”

The varying view points reflect how complex the issue is, particularly for companies with a global footprint, where views on the value of diversity differ by region. Nevertheless, corporate leadership must become adept managing cultural viewpoints, Maitland writes.

“Managing cultural differences is a difficult but essential skill for leaders. To encourage diversity of thought and expression, CEOs have to empower their employees. This represents a big shift in national cultures where employees are used simply to obeying the boss.”

As new markets become even more integral to corporations’ strategic plans, multicultural competency will become even more critical. Creating inclusive teams is one way to instill the importance of diversity from the ground up.

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