Finance teams in business need to embrace diversity if they are to tackle modern business problems, according to a new ACCA (the Association of Chartered Certified Accountants) report.
The report, ‘Building a better business through finance diversity’ identifies five key steps for businesses to take to harness diversity within their finance teams to give them a cutting edge in a competitive business world.
‘Diversity is a word often thrown around in business without much thought,’ says Jamie Lyon, ACCA’s head of corporate sector. ‘It’s too often seen as a presentational device: what does our company look like, is the question that’s asked. Diversity isn’t about that at all.
'Our research shows that the top companies take a broader perspective. Diversity’s about how their companies think, how their processes work, and how they manage their human capital. It’s about getting the most out of your business, taking advantage of creative tension, making sure that the way you do business doesn’t miss out on the talent you have.
‘The modern finance team sits at the heart of businesses around the world, and is under pressure more than ever before to get results. Manage the diversity of your finance team successfully, and you’ve given your business an excellent tool for competing in a globalised, dynamic business world.’
The report looks at the experiences of some of the world’s leading companies, including IBM and GE Healthcare China, and makes the following recommendations for creating a successful, diverse finance function:
- Understand cultural differences. These really matter. You may have a team that looks different, which looks good in your CSR reports, but your team is consequently going to think and work differently too. For companies expanding overseas, new markets bring their own customs, culture, regulatory environments, and governance standards. Get to grips with each market, and consider how to integrate working practices into your existing corporate model.
- Diversity starts with recruitment. By bringing in individuals from different backgrounds, sectors, experiences, and careers, finance leaders can bring a mix of different skills to their team. Working effectively with HR is crucial and recruitment policies must be effective and engaging.
- Nurture diversity where it doesn’t already exist. A wide range of experiences and perspectives are needed to develop the finance leaders of the future: it’s no longer the corporate career ladder, but the corporate career lattice. Managers from developed markets should be given the opportunity to spend time in emerging markets and vice versa. Experience outside the finance function is crucial and a commercial role can be valuable in developing business experience and awareness. Job rotations might meet resistance from managers who don’t want to lose good staff; support from the top is vital to ensure job rotation becomes part of a business’ DNA.
- Embrace open ways of working. Finance leaders that promote a diversity of thinking, and encourage their teams to express different views, will be better able to identify risks and opportunities. Allowing time for a constructive debate means it might take longer to reach decisions, but decisions are likely to be better for it
- Manage the tension between standardisation and diversity. Many companies have established regional shared-service centres – at the expense of in-country operations – to standardise procedures and capture economies of scale. This drive for standardisation needs to be balanced with the diversity of local experience and knowledge from different backgrounds. Finance leaders need to think carefully about the right global/local balance for an optimal finance function.
- Read the report by clicking on the link in the 'Related Links' section to the left of this article