Can innovative corporate reporting build trust in a volatile world?

Finance 4.0 and the transformation of reporting and governance in a high-risk world

Corporate reporting builds trust and confidence in businesses. It gives stakeholders, such as investors, confidence and clarity on an organization’s strategy, risks and opportunities and sends a strong message about the quality of the management team and the standards expected of its people.

But the trust and confidence enjoyed by businesses is being disrupted. In our hyper-connected world, the reputational impact of scandals such as data breaches and unethical conduct can be catastrophic. Trust can be destroyed forever if organizations do not keep up with the public’s shifting expectations of acceptable corporate behavior, or they fail to safeguard personal data.

As nance leaders seek to thrive in this increasingly volatile and compliance- oriented world, the CFO’s agenda is evolving. EY has conducted this research annually since 2014, and in our earlier studies nance leaders were focused on connected reporting, nance talent and the transformation of the nance operating model.

Today, their focus has shifted to the external risks for reporting. These range from the dif culties of managing risk when disconnected systems cannot provide data synchronized with the cultural risks of individuals failing to comply with acceptable ethical behavior. Finance leaders have increasing responsibility for making sure that failures of control do not lead to costly media exposure or regulatory attention.

To manage these risks, and build trust in their businesses, nance leaders and corporate reporting should explore two critical areas. First, advanced data analytics and integrated technologies — what we call “Finance 4.0” — can position them as the “trust-giver” to a wider group of internal and external stakeholders — such as boards and regulatory authorities — around both nancial and non nancial information. Second, a rethink of traditional approaches to corporate governance can give audit committees and boards the competencies and sophisticated insights they require to provide effective oversight and support effective compliance and control.

By focusing on the power of Finance 4.0, and putting in place a robust governance model, CFOs and board leaders can allow corporate reporting to play a leading role as a con dence-builder in today’s heavily scrutinized world

Peter Wollmert

EY Global and EMEIA FAAS Leader

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