Controllers prep for 'dramatic' role changes, focus on value creation: EY

By Grace Noto for CFODive.com

Over the past decade, CFOs have seen their roles evolve from a purely numbers-focused position to one where they are expected to be a strategic driver for their organizations — and financial controllers are right behind them. Eighty-six percent of controllers believe their role will change “dramatically” by 2030, according to a report by Big Four firm Ernst & Young released Wednesday.

While controllers recognize that change is coming, and coming quickly, they “don’t necessarily have a view on what that will look like,” Myles Corson, EY global and EY Americas strategy and markets leader, financial advisory services said.

Indeed, 26% of controllers expect their roles will require completely different, or “unknown” skills by the end of the decade, EY’s Inaugural DNA of the Financial Controller report found — meaning both finance chiefs and controllers must prep for a coming future where their roles look very different than they do in present-day.

“CFOs need to also recognize, as they’re stepping up, they need to be developing their teams, and so perhaps some of the legacy views on the controller role will need to expand,” Corson said in an interview. “Certainly, I think controllers have an opportunity to rebrand and reposition themselves and their function.”

In an age where CFOs are expected to drive strategy, the controller has swiftly become their right hand — acting as a critical advisor to the finance chief, while also continuing to be responsible for day-to-day accounting and financial reporting tasks, CFO Dive previously reported.

As companies lean more heavily on their finance functions for insights and strategic planning, more controllers are recognizing the need to be a “value bridge” for their organizations, Corson said. Thirty-nine percent of controllers anticipate a “heightened focus” on value creation over the next several years, EY’s survey of over 1,000 controllers across 28 countries and territories found.

A number of controllers are also turning to new technologies as a way to do so: so-called “confident controllers,” representing 25% of the survey respondents, are already using technology to drive value, EY said. Additionally, most controllers have embraced AI, with 67% using the technology for day-to-day tasks. Their adoption of AI is “a positive indication that controllers are being open minded and recognizing the opportunities that the new technology presents,” Corson said.

Technology is only one piece of the puzzle, however — controllers looking to act as that “value bridge” also need to be sure they are fostering strong relationships with the CFO and other key business executives.

“Technology and having the right data helps with value creation, but ultimately, unless you’re engaged with cross-functional stakeholders, unless you’re involved earlier in commercial decision-making, it’s very difficult to drive the value creation agenda,” Corson said.

The changing nature of the controllers’ role could also impact how businesses think about financial talent —including where to source future CFOs. More and more CFOs are coming from backgrounds outside of traditional accounting or finance, which could mean that in the future, fewer controllers will ascend to the CFO seat as “oftentimes boards and executives are looking for more of that commercial background, given the focus on value creation that we’ve talked about for the CFO role,” Corson  said.

Indeed, EY’s survey shows a growing split between controllers which are aiming for the CFO chair, and those that are keeping their focus on the transformation happening inside of their current roles. Just 32% of “confident controllers” highlighted a desire to become CFOs, for example, the survey found.

That group sees the controller position as a destination, “and are very empowered to drive change, and want to drive change, because they’re invested in success, because they see [the controllership] as the long-term career path for them,” Corson said.

This split means the CFO and other key executive leaders need to think carefully about their succession plan strategies — finance chiefs need to have a clear understanding of the “talent agenda” of the business to ensure they are effectively preparing for how financial roles and responsibilities are changing, Corson said. Regardless of how the organization thinks about succession planning, however, “the relationship between the CFO and the controller is really important,” he said.

As businesses see more finance chiefs without those traditional financial reporting or accounting backgrounds, that “will give opportunities for controllers to step up and actually take on a more meaningful role, because that skill set is really appreciated, and not one that the CFO necessarily has themselves,” he said.