I started my presidential year stressing the importance of keeping the CIMA qualification relevant to business and I end my year on the same theme. Looking to the future, members must ensure that we become not only business advisers but also business navigators.
During the spate of corporate scandals a few years ago, much of the blame was heaped on our colleagues in auditing. Today the blame for the financial crisis is usually aimed at bankers, their bonus culture and the regulators. We could consider ourselves lucky to have escaped censure again, but perhaps we should be concerned that no one is asking: "Where were the management accountants?"
We know from CIMA's research into the future of management accounting that many leading companies are already transforming their finance functions to be more efficient and provide better decision-making support. But it must not stop there. Consider what happened in banking as an example. Over many years bankers devised innovations to improve their banks' return on capital and increase the returns reported to shareholders. These met society's demand for credit and gave the banks' clients higher returns. The banks reported huge profits, which generated value for shareholders, too. But was all this in the public interest? The bankers were awarded bonuses in line with their contribution to shareholder value, yet their activities eventually destroyed shareholder value and created huge costs for the global economy. So where were the banks' corporate navigators?
The ensuing economic crisis has highlighted the need for finance to assume a broader role not only supporting a business but also using professional objectivity to ensure that risk and performance are managed in the long-term interests of all stakeholders. As the world emerges from recession, businesses need management accountants who can combine financial expertise with commercial knowledge. Why management accountants? Because they are the only professionals with a complete financial toolkit and the business understanding to use it. This kit includes the...