How can the financial controller transform to shape the future with confidence?

As stewards of the organization’s data, the controller already plays an instrumental role in building confidence in the enterprise. In the Age of And, they can further build on this standing by evolving in response to an increasingly complex business environment, rapid technological advances, and growing awareness of the risks and opportunities presented by sustainability. Accordingly, the research identified three important transformational opportunities for controllers to create value:

1. Transform data into action

Today, organizations have a wealth of data at their disposal. Yet it is not necessarily organized, managed or used in ways that will help the organization to identify the actions that will drive long-term success. By virtue of their influential strategic position, controllers are well-placed to unleash the potential of data. As well as analyzing it for insights, they can help capture the appropriate data elements for use with AI and other powerful digital tools.

Deirdre Ryan, EY Global Finance Transformation Leader, believes that by collecting data to fulfill the enterprise’s compliance requirements, the controller is developing a foundational data layer that could be immensely valuable to the broader enterprise. “The data that the controller is collecting to comply with statutory obligations is the same data that companies are using to drive value,” she says. “Controllers can mine that data and, in some cases, combine it with operational and external data, to drive insights and improve the ability of decision-makers to make better decisions for the entire enterprise

The research shows that controllers are aware of this opportunity, with 88% of respondents saying that using data insights to recommend strategic opportunities is already an important aspect of the controller’s role. Furthermore, more than two-thirds (67%) of controllers always or frequently promote data-driven decision-making and technology as part of their role.

2. Build AI confidence within the finance function and enterprise

AI can be a game-changer for both finance functions and their enterprises by enabling them to completely rethink what they do and how they do it. The research highlighted that controllers are already enthusiastic users of AI tools, with 89% of controllers surveyed having adopted AI and 65% using generative AI (GenAI) on a frequent basis. This could reflect the fact the controllers surveyed for this research work for large businesses that may have sufficient resources to invest in AI.

As more organizations adopt AI tools, controllers can draw on their own expertise to help drive AI-enabled transformation within their organization. As well as identifying potential use cases, they can build confidence in the technologies by assessing whether the outputs of AI — and GenAI, in particular — meet the necessary requirements for reliability, transparency and explainability. In the specific context of finance, AI can be used to automate a wide range of basic finance processes, while GenAI can be deployed for various strategic activities such as predicting market trends and monitoring the performance of competitors.

Jeanne Boillet, EY Global Accounts Committee Assurance Lead, believes that over the next five years, as many routine finance activities become automated, compliance will consume less of the controllers’ time, freeing them to play a more strategic role within their organizations. She says: “The financial controller will apply more time to judgmental areas, forecasting and being a copilot of the business, helping it to take the right decisions.”

3. Integrate sustainability with business performance

The shift toward a more sustainable economy could help controllers prove themselves as both innovators and value creators. To innovate, they can support the growing requirement for robust sustainability reporting, which could involve sourcing new kinds of data, implementing new systems, building new processes and establishing new checks and controls. To create value, they can take responsibility for how the organization’s financial and nonfinancial performance is communicated to stakeholders, including the board, analysts and investors.

However, despite the pronounced opportunity, most controllers are not highly engaged with sustainability. In fact, just 43% of controllers surveyed expect to be frequently involved in sustainability considerations in financial planning and reporting in five years’ time, a moderate increase from 36% of respondents who are frequently involved today.

That said, some forward-looking controllers are exploring how they can reinforce and communicate their organization’s total stakeholder value proposition. “I am seeing some evolution in terms of how financial reports support the equity story and shareholder value creation, both from a financial and a sustainability perspective,” says Juan Uro, EY Americas Leader, EY Center for Executive Leadership. “Financial controllers can drive a lot of value through supporting the total shareholder position by describing the company’s performance against its financial and sustainability goals.”

To take full advantage of the three transformational opportunities, controllers should build a far broader skill set than they may have today. In addition to financial technical expertise, they will likely require general business acumen; knowledge of AI, analytics and cybersecurity; strategic thinking skills; and the ability to oversee data governance.

Alongside these technological and data skills, controllers should develop strong interpersonal and communication skills. Empathy and relationship skills can be important for managing a broad set of internal and external stakeholders. It can also be helpful to know how to build a personal brand, including on social media channels such as LinkedIn, since personal brand building can be a powerful strategy for attracting new talent and engaging with peers across the organization.

Controllers recognize that investment in collaboration and coaching skills can be essential to promote effective teamwork. Almost half (46%) of respondents believe that in five years’ time, they will always or frequently need to engage in team building, mentoring and career development.

Agility and a willingness to embrace innovation can also be critical if controllers are to create greater value through data, AI and sustainability. Yet, it seems that a mindset shift may be required since just 43% of controllers surveyed think that being innovative is an important quality for their role — despite 51% of senior finance leaders surveyed believing this to be so.

Ultimately, controllers should become change agents who can lead the finance function into the future, argues Andrea Gronenthal, EY Americas Strategic Tax Transformation Leader. “Operationalization of the transformation strategy is going to fall squarely on the controller,” she says. “So, they should be people leaders who can carry the function through significant change. They should also balance being a steward of the organization and managing risk with creating value and meeting the strategic objectives of the CFO.”

Actions for CFOs

CFOs play an essential role in developing controllership talent. To equip their controllers with the right mindsets and skill sets for the future, CFOs should encourage them to take on responsibilities outside of controllership, whether that’s on a full-time, part-time or project basis. In particular, controllers should increase their exposure to financial planning and analysis (FP&A) and investor relations, as well as opportunities to think about value creation more broadly. They should also increase their engagement with the C-suite and other key internal and external stakeholders.

Skills shortages are an issue in many markets, including the US. Therefore, CFOs should be open-minded about their people strategy, aiming to tap a diverse talent pool when seeking out the next generation of controllers. To attract the best talent, they should paint a compelling picture of what the future of controllership looks like.

“When developing their people, CFOs should be conscious that they may struggle to attract and retain talent with the right mindsets and skill sets into controllership roles if they strictly categorize those roles as compliance positions,” says Myles Corson, EY Global and EY Americas Strategy and Markets Leader, Financial Accounting Advisory Services. “To compete in the talent market, CFOs should outline an inspiring vision of the future financial controller as a dynamic and strategic force within the organization — someone who balances their responsibilities as a steward of the organization’s financial data with creating value and meeting the strategic objectives of the CFO.”

Some controllers are starting to redefine the role by seizing transformational opportunities and developing future-focused mindsets and skill sets. This group, which we call “confident controllers,” are playing a formative role in driving finance transformation, accelerating enterprise growth and creating long-term value.

Defining a confident controller

To better understand how controllers are aligned with the future priorities of CFOs, the EY organization created an index based on controllers whose responses emphasized qualities aligned to technology, advanced data analytics, sustainability and innovation. These attributes reflect the most important priorities of CFOs as they transform their finance function over the next three years.

The index was created based on the importance respondents placed on each attribute for today’s financial controller. Using the total score of each component, normalized from zero to 100, we identified the top quartile of respondents as confident controllers.

What sets confident controllers apart?

Confident controllers spend more time on future-focused tasks compared with other controllers and they encourage their teams to develop skills in these areas. Almost three-quarters (72%) of confident controllers always or frequently invest time in data-driven decision-making and technology use. Furthermore, 66% of confident controllers always or frequently spend time on risk management, while 66% do the same for corporate responsibility.

Significantly, confident controllers appear to have been more successful than other controllers at capitalizing on their role as the organization’s data steward. While most controllers lead their finance function when it comes to data governance, strategy, analytics and reporting, confident controllers are more likely to have these responsibilities at an enterprise level.

In fact, 45% of confident controllers lead on enterprise-wide analytics and reporting (1.7 times higher than other controllers). Meanwhile, 26% of confident controllers lead on data governance and strategy (3.3 times higher than other controllers).

While these confident controllers appeared to be more aligned with their CFOs’ transformation agendas than other controllers, the data revealed a surprising twist. Despite having the skills and aptitude to succeed as a CFO, confident controllers were more likely to seek long-term impact by remaining a controller, with 32% seeing the controller role as their ultimate career ambition, compared with 21% of other controllers.

The path to CFO

The path from controllership to CFO is well-worn. In fact, based on this research, 18% of current CFOs were previously controllers, while 51% of all controllers surveyed have their sights set on ultimately progressing to the CFO role.

For today’s CFOs, robust technical skills are taken as a given. To succeed in their role, they also require a wide range of business and personal skills, including strategic thinking and the ability to communicate confidently and competently. Moreover, in their capacity as transformation leaders, they need the capability to engage, inspire and motivate their people.

Libby Hacker, EY Global People Advisory Services Finance Leader, believes that controllers with CFO ambitions need the ability to craft a narrative around their vision and engage people with it. They also need to be strong at developing their teams. “Younger generations want to align their purpose to the broader purpose of an organization, whether that’s finance or the organization more broadly,” she says. “So, controllers should help to shape and communicate a purpose and vision for finance that inspires finance employees and attracts the top talent. They should also be able to explain what the employee value proposition is, which career paths exist, and where there are opportunities to innovate and develop future-focused skills.”

However, controllers looking to become CFOs are prioritizing hard financial skills — presumably because they see these as paving the way to the top job. For instance, they are more likely to say that accounting and financial reporting is important to their role (86% vs. 68%). They are also less likely to cite the importance of softer skills such as communication, technology, innovation and sustainability knowledge. Therefore, to achieve their career ambitions, confident controllers should shift their mindset in favor of developing a broad skills base.

“The controller of the future will be a trusted partner to the CFO right across the transformation spectrum,” according to Mike Verbeck, EY Global Assurance Deputy Chair. “They will create value in their capacity as analysts, collaborators, innovators, storytellers and leaders of talented teams, as well as in their capacity as accounting and compliance experts.” So, how can controllers get from where they are today to where they should be tomorrow: value protectors, value optimizers and value creators?

Financial controllers can seize the opportunity to transform their role by:

1. Embracing uncertainty and disruption
   Seek new opportunities to create value for the organization, while overseeing compliance and pursuing efficiencies.
2. Exploiting the potential of data
   Use data to drive the organization’s short-term performance and long-term value creation strategy. Financial data can be combined with operational and external data to deliver powerful insights that support better executive decision-making.
3. Harnessing the power of AI
   Draw on the power of AI to develop smarter ways of working. Develop a roadmap that outlines the future vision for the AI-enabled controllership team, considering which data, processes and controls are required and — most importantly — what can be done completely differently from today?
4. Equipping their team with future-focused mindsets and skill sets
   Encourage their teams to embrace agility while developing a broad range of business, personal and technological skills. They should also challenge them to think of themselves as innovators and problem-solvers, as well as financial and compliance experts.

CFOs can empower their financial controllers to realize their potential as value creators for the whole enterprise by:

1. Incorporating innovation into their controller’s job description and performance criteria
   Provide controllers with the opportunity to lead a transformation program or another innovative project and provide them with appropriate budget, staff and mentoring.
2. Equipping their controller with future-focused skills
   Help controllers develop future-focused skills that can support them to create value in their current role and advance to more senior positions, including CFO, if that is their aspiration. Consider giving them additional responsibilities — for example, ownership of tax or treasury.
3. Building a pipeline of controller talent
   Develop future talent by taking an open-minded approach to recruitment and retention. Hire people based on their mindset and willingness to learn, rather than on their educational background. Articulate how the finance function contributes to the organization’s purpose to inspire people in their work.

The EY Global DNA of the Financial Controller Survey (pdf) provides actionable insights for financial controllers, CFOs and other finance leaders looking to elevate the status of controllership within their organizations. By creating new business value, while fulfilling their traditional responsibilities in value protection and optimization, controllers can support finance transformation and steer their organization toward long-term success.

Summary

The financial controller of the future should combine existing value protection and value optimization responsibilities with a new orientation toward value creation. In addition to being a compliance specialist and a data steward, the financial controller should be a technological innovator and future-focused enabler of change.