Feature Article

FEI@80: The Next 80 Years

We asked leading financial executives and business leaders how the next 80 years of global finance will evolve. Some offered cautious prognoses, others predicted fundamental, sweeping change and one scenario was simply out of this world.

Compiled by Ellen M. Heffes

Any conversation about the future financial executive and the profession must consider the changing regulatory landscape and the up-and-coming talent pool. Like a major league ball club, organizations of all types require a pool of qualified individuals from which to draft and develop their future stars.

Gone are the days that a company’s outside auditors would serve as the primary training ground for such talent, as more than half of all current accounting grads do not initially work for a CPA firm, according to the AICPA. As to the future financial and regulatory environment, GAAP as we know it is coming under increasing pressure both from abroad (IFRS vs. GAAP) and domestically (private vs. public GAAP).

Toss into this mix the seemingly endless quest for tax reform at the federal level and it is easy to see how volatile the atmosphere is becoming for the future. Facing this, will the future financial executive become more of a technocrat over time, enforcing rules and statutes primarily, or will the environment become more business development-oriented, reversing the trend of the last few decades of ever more complex rules setting and regulation, with the result that once again the CFO becomes an equal member of the management team? One can only hope.

Given all the changes in the accounting profession and the business world over the past 80 years, it would be presumptuous for me to predict the next 80. But I’m virtually certain that having enough cash will continue to be the lifeblood of any successful corporation and that the debits and credits will still have to balance each other.

The primary responsibility for today’s financial executive is to drive intrinsic value. Finance executives partner with the CEO and COO as their companies’ senior strategists to achieve success. I don’t see this role changing much, but the competencies required to perform effectively in this role will evolve.

In the future, the CFO will need to focus externally more so than internally and create and leverage connections and drive change outside their organizations as well as inside to create value. As a result, strategic thinking, creative vision and the ability to “connect the dots” will be much more important to the financial executive of the future.


Financial executives are ultimately stewards of growth for their organizations. Smart, quality growth is ever more reliant on sound financial management, which underpins the strategy of any organization. At Grant Thornton, we look forward to close, rewarding relationships with these business leaders for decades to come.

In the short term (five years), getting comfortable with data and core processes operating in a cloud environment. Days of having all data stored/managed/locked down internally will be gone and procedures for security will need to adapt. Given the increasing role of government, I’d expect financial executives will need to be more directly involved in shaping public policy, without the often high-cost middleman of lobbyists or other interpreters guiding their view.

Countries with aging demographics will need to find ways for financial executives to contribute in some fashion beyond the traditional boundaries of retirement and pay-by-the-drink consulting. Possibly some form of knowledge bank creation and toolset. Finance recruitment and training will need to focus more heavily on emerging economies, particularly in the southern hemisphere.


The financial executive will need to continue to evolve into a business leader with global experience and a global perspective. More than any other executive in a corporation, the financial executive will need to be multifaceted to help deliver returns to the shareholders.


Financial executives will remain ever critical to business success and work in an ever-increasing global economy with ever-increasing government and professional regulation.


Over the next 80 years, information technology may exert an increasingly powerful influence on financial executives. Computers and the Internet have already changed many aspects of financial management, but the relentless creativity of IT developers means the process may accelerate and be less expensive than today. Sooner than we think, software could permit “continuous monitoring” that allows management to track and improve performance in real time, and “continuous auditing” could enhance auditors’ reviews and analyses, down to the transaction level on a real-time basis.

Management’s intensified performance monitoring and improvement activities may promote more consistent and positive earnings, internal auditors’ more regular, thorough and complete reviews may enhance controls and compliance and independent auditors’ issuance of more efficient and frequent audit reports may provide assurance at speeds consistent with the rapid pace of the high-tech 21st century marketplace.


I have two questions: Will CFOs, members of senior management and their boards increase their use of cash flow-based information (receipts and disbursements, etc.) to monitor their business operations in the face of the ongoing complexity of accounting statements, which can result in changes in financial outcomes independent of any changes in operations?
And, will management and boards begin to "price" their senior management positions — that is, figure out what a position in the company is worth at that point in time, and then find the best available person who will accept that price, as opposed to finding the best available person in the marketplace and paying that individual whatever the market requires?


Financial executives will continue to evolve into a more strategic and operational role, as internal business advisers and risk mitigation experts. From supporting critical analysis in the development of corporate strategies, to making better decisions in the execution of actions consistent with goals and objectives, supplementing intuition with facts. I foresee corporate financial executives devoting an ever-decreasing proportion of their time reporting the results and monitoring dashboard performance indicators and more time devoted to making a real difference in the results they report and monitor.

Included is proactive risk analysis and assessment, best practice implementation, optimized resource allocation, prioritization of initiatives and alternatives, compliance efforts, cost reduction and data mining.
The future will reward well-rounded training and preparation for financial executives, so that they are able to add real value to the business operations, operating environment and related analytics, while keeping up with the changing financial reporting standards.


An important trend I see is that financial reporting, tax policy and compliance will become more and more inextricably connected with corporate responsibility and there will be even more demand for increased transparency with closer engagement with government and regulatory bodies to drive a closer connection with shareholders and the capital markets.

The “green” movement and the growing importance of emerging territories as new markets for multinational corporations will only increase this trend.

In other words, corporations will need to be more fully engaged in territories in which they do business in ways they never have before — it will no longer merely be about complying with accounting standards and tax laws and paying taxes and completing financial reports.


There will be some things that are very much the same and some that we can't even envision now. We could ask some key questions: Will reporting be globally consistent and comparable? My guess is that it will. Will the content change? I'd say “yes,” in certain degrees I think it will have changed. Also, the use of technology is going to allow for more and more easily obtainable content. Reporting more nonfinancial information and relating that to the financial information, more information on sustainability and environmental impacts, all seem to be trends that continue to grow in demand and importance.

Will there still be the basic financial statements or will it be replaced by just electronic data that you can plug into your model and create your own build-to-suit financial statements? I believe there still will be a core set of financial statements and there will be the ability to plug in data to your models. Some of these mentioned here will occur well before 80 years.


Since long before FEI was founded, financial information has been expensive, hard to get and difficult to interpret. This created a need for accountants and financial executives and professional organizations to support them. Music, movies, newspapers and books used to be expensive and hard to get, too. Digital technology reduced the cost and disrupted employment and long-established business models.

There is no reason to believe that financial information is immune from the technologies that caused dramatic changes in other types of information. The universal labeling of financial information with XBRL promises to commoditize financial information just as MP3 technology did with music. Digital music provided a universal standard for recorded music that made it easily accessible from anywhere.

It will certainly be more expensive, complicated and difficult to digitize financial information. But it will happen.


The most significant driver for finance and the CFO in the future will be continued globalization. Finance leaders will have to have experience and be comfortable with other cultures, be able to understand and react to distant markets and customers, recognize new and different competitors and build and manage very diverse work forces. In essence, finance leaders will have to become truly global leaders themselves. Aiding them will be much more timely, deep and useful information. Finance leaders will be getting updates on the key variables that drive their firm’s value virtually instantaneously. Then, using their global perspective and information flow, they will be in the necessary position to impact the firm’s global strategy and value-creating performance.


The past 80 years have taught us a single valuable lesson: That despite our hunger to ascertain the “new normal” at each turn in the road, the persistency of that is fleeting. Therefore, just as the human species owes much of its success to its ability to adapt to changing environmental conditions much better than other species (unlike Neanderthals, who couldn’t adapt and perished), so, too, the successful financial executive will be one that is able to commit to a path and yet remain nimble and alert enough to adapt when the path is no longer optimal.


When most of us look back at the last 80 years, I am sure we conclude that this period of history had more changes than any other. Looking ahead to the next 80, I believe the conclusion will be the same. This tells me that the most important thing in any period is not the amount of change but the reaction to the change by the individuals involved.

Based on this conclusion, I believe the adaptation of financial executives over the past 80 years has been remarkable. Looking ahead, I see nothing to indicate that the financial executives of the next 80 years will not continue to learn, to adapt and to contribute as well as those who met the challenges of the past. I feel some regret that I will not be there to participate in this wonderful future, but I wish my successors well in those exciting times ahead.


It’s been several decades since I played a direct and active role as a financial executive. However, I continue to stay closely abreast of the activities and contributions of today’s financial community. I anticipate that tomorrow’s financial leaders will be much closer to operations of an enterprise and will be considered the co-leader along with the CEO in responding to issues related to globalization, corporate mobility, information technology and ethical conduct. Governance and control will be significantly more important and play an extremely vital role in tomorrow’s enterprises.
In short: you ain’t seen nothin’ yet!


Technology gains will change business as we know it today. The data to information to insight cycle will accelerate to literally “real-time” across the globe. Data and information management will enable real-time, automated decision making and risk management. For example standard taxonomies and XBRL will permit one version of electronic data to meet each country’s reporting requirements for securities, tax, environmental and bank regulators.

Compliance enforcement will be virtually instantaneous, removing significant uncertainties and workload. Cross-border information-sharing will evolve to become the norm to ensure governments get their fair share of a multinational’s taxes. These trends will drive enormous productivity improvements for both industry and governments that will completely change the nature of how finance and tax people do their jobs. Time currently spent on data management and reporting will instead be spent on analysis, decision-making, business strategy, sustainability and how to produce things better, cheaper and faster.


When FEI was founded, the CFO of the day was the quintessential historian of the corporation, keeping detailed accounts on past activities, establishing solid personal relationships with the town's bankers, and providing essential insight to management on investment decisions ... revered, trusted, competent, conservative and under-appreciated. He found comfort and benefit in conversing with other FEI chapter members and attending FEI programs. In those 80 years, nothing has changed except what used to take weeks to complete now must be finished in minutes. Mistakes lead to subpoenas, regulatory requirements are ever-changing and irrational, advice is judged with the benefit of hindsight and the rewards of an FEI membership are more important than ever.


There are three conflicting pressures bearing on the profession, which are more likely to intensify than abate over the medium term: first is the desire for the financial function, and the CFO specifically, to provide strategic support to the business, the CEO and the board. This need has been growing for at least the last 20 or 30 years, and is often the first qualification mentioned by a CEO when looking to fill a CFO slot.

Second is the increasing complexity of financial statements and financial reporting. The “rule book” is growing at an alarming pace, despite the occasional initiatives at streamlining (none of which has made any material progress in lessening complexity). FASB is working hard to promulgate more and more direction in response to accounting issues that have arisen and that will arise. At the same time, they are coping with the desire to conform U.S. GAAP to IFRS, while the political and regulatory will to do that is questionable at best, but the inevitable outcome of these efforts is additional complexity.

The third pressure is the need for increasing efficiency. With technology enabling real-time communication around the world and transaction processing speeds that are advancing at impressive rates, all competitors need to find the lowest possible cost of doing business, because others are. This means being open to novel ways of fulfilling the financial role, and ultimately may mean outsourcing large chunks of it to the lowest-cost labor markets, and surrounding the work with enormously more effective and complex control structures. Cutting the finance budget isn’t the answer to all business needs, but finance can and must play its part.


My fervent hope is that in the next 80 years we will undo the damage being done by ever more suffocating government regulation. Every mistake or crime has been followed by a colossal new regulation, which punishes everyone and decreases the competitiveness of U.S. companies.


CFOs need to fully understand the business and be able to communicate financial results with others (within and outside the organization) in an honest and unbiased manner. Understanding the balance between managing risks and going too far needs to be clearly stated to those in management. The best CFOs would be the moral force on decision-making. They also need to understand the global marketplace and how it applies to their organization and participate in the major decision-making to be considered successful.

The next 80 years will be challenging and competitive forces will make change a byword of daily demands. Those who can adapt to changes in the marketplace while keeping their moral compass in the right direction will succeed.


I have often wondered what the role of the regulators will be in our future as financial executives. The SEC has seen some significant changes since its inception and the role that it plays in our daily lives as public company financial executives.
I believe that the information demand will exceed the capabilities of the regulatory agencies to provide the potential "real-time" performance visibility of public companies. In the age of social media and the immediate information sharing as we move forward into the future, will the demands for real-time visibility to a company’s performance be in the best interest of the company, regulators and investors?

It took the SEC what seemed like years to develop electronic filings and to accelerate deadlines for reporting in the last decade of changes. I can't imagine the burden that it will feel when the demands of more frequent (more than quarterly and annual reporting) financial performance reporting in our "instant information age" are placed on the public companies by their investors.


I see a revolutionary change of the role of finance and the role of the finance executive in organizations. The functions that the traditional finance organization handles today — treasury, accounting, AP and AR, statutory compliance, internal audit — will be completely automated as companies adopt systems with artificial intelligence that are self-learning and can organically adapt to the unique characteristics of a particular business. The traditional static between systems that require human intervention will be replaced by a umbilical integration of applications — such as HR, CRM, ERP, BI platforms that will seamlessly exchange data and reduce the coding, mapping, formatting and reporting that now take up an inordinate amount of time.

The finance executive of the future will be a strategic partner — playing a critical role in the development and the maintenance of revenue generation opportunities, understanding customer profitability metrics and drive conversation around future positioning of the industry in general and their organizations in particular. The distinction between accounting, strategic planning and financial analysis will blur and merge into a single role. The finance executive will also be a communicator — interpreting data for the benefit of his/her peers internally and for lenders, investors and the regulatory community externally.

Technology will evolve to being a utility and will eliminate any first-mover advantages. All applications will be cloud-based and can be bolted onto any current system. The emergence of utility computing will purge all legacy systems and will drive technology adoption across all kinds of businesses globally. Information will be a commodity and the management of information will become a key competitive attribute for the finance function. Technology will be the tool, but knowledge will reign supreme.


The next 80 years will be a logical extension of the past 80 years. Financial executives will be expected to do more with less. Technology will provide the ways and means to do so.


The last 80 years have seen great changes within the financial community and within the profession. I believe we should expect no less in the coming 80 years. There are several trends and factors that will have long-term implications and effects: The changing/shifting demographics are transforming the global workforce. The big demographic shifts are the ones around gender, ethnicity, religion, sexual orientation and age. To navigate these, we will need to make sure that we help teams maximize the incredible diversity of perspectives that will be brought to bear in innovating and in navigating challenges. Diverse teams are rarely mediocre. They are either really good or really bad. And we need them to be really good.

There are also some unknowns — for instance, while we continue a trend toward globalization where people, business and capital move almost seamlessly across borders, regulation and laws are still national and can create uneven and inconsistent oversight across global markets.

Right now the goal of global regulatory harmonization seems illusive, but information is free-flowing across markets and that information is critical to well-functioning capital markets. If investors and other capital market participants are better equipped to find out about national differences that should cause them to interpret the information differently and incorporate those differences into their investment decisions, it could make for a more dynamic and high-performing global capital market.


Financial specialists have been around for at least 600 years — since the heyday of Venice trading in the 15th Century. Nevertheless, looking presciently into the future for another 80 years is beyond our grasp. It is possible, however, to emphasize those traits that have made Finance valuable over the centuries and predict that they will also be needed in the future.

First, they are objectivity and integrity. Finance executives deal with numbers, and numbers don’t lie, or shouldn’t lie. Tell it like it is, good or bad. Second, there is the need to understand the business. Numbers only make sense if they are correctly used in interpreting, measuring and valuing the business and its successes and failures.
Third, if computer and mathematical models produce numbers too complex to fully understand, there is probably something wrong with them. Business doesn’t need to be that complicated. I would be surprised if these basic tenets were not to stand the test of time.