The Culture of Finance
How finance execs contribute to risk mitigation, corporate purpose, and leadership, inclusion, and diversity
The Culture of Finance
The words “culture” and “finance” seem at odds with each other. Just think — when was the last time you associated an income statement or balance sheet with the culture of your organization? You may rationalize that you spent money this year enhancing your company’s culture, so therefore there is a connection to finance. Or maybe you work for an accounting firm, and numbers are core to the cultural fabric and values of everything you do.
This all may sound like a stretch, but the truth is, chief financial officers and other finance executives are cultural tone-setters. We are shaping culture when it comes to risk mitigation, corporate purpose, and leadership, inclusion, and diversity.
Risk Mitigation
Reining in costs, avoiding certain investments, and reducing credit and liquidity risks are all ways finance executives help companies mitigate exposure to problems. Feeling safe and confident that an organization will successfully navigate a turbulent economic environment is meaningful to culture. Most quarterly updates for public companies contain commentary from CFOs. In fact, it’s one of the most important aspects of a conference call — injecting a voice of reason and rationality to what otherwise may be a very choppy period. The CFO serves as the yin to a CEO’s yang.
The cultural values distilled from a CFO’s ability to mitigate risk also relates to business-planning processes. CFOs often determine where and how risks will affect a business plan, as noted in a McKinsey whitepaper. Again, without a CFO serving as a cultural reference point for mitigating risk, the foundation of most organizations will crumble.
Corporate Purpose
While profitability is a key metric that CFOs utilize to measure the health and well-being of an organization, finance executives also help organizations place value on corporate purpose. If we define corporate purpose as the role a company serves in society in the context of culture for employees, as well as sustainable, long-term value for shareholders, the CFO plays a critical function ensuring this mission comes to fruition.
Deloitte also cites an analysis that says sustainable corporate purpose lowers the cost of capital for businesses. The bottom line: Finance teams drive long-term, tangible value for all stakeholders.
Leadership, Inclusion, and Diversity
CFOs have historically kept a low profile when it comes to visible leadership, but this wizard-behind-the-curtain persona is no more. Ever since the pandemic, CFOs have played a greater role rallying workforces and taking inventory of how to improve an organization’s culture.
This translates to CFOs taking an active role to reduce biases in recruiting, hiring, and upskilling, in addition to diversifying their teams and demonstrating inclusive leadership. Finance executives are digging into data that demonstrate weaknesses in diversity, equity, and inclusion initiatives, while also leveraging their leadership positions to implement stronger policies.
These variables lay the groundwork for culture that endures topsy-turvy times. Instead of relying on what is culturally in vogue, CFOs and other finance executives bring hard facts and strong values to the table. This ultimately balances the science and art of creating a healthy workplace culture.
Additional Resources
The Evolving Role of Chief Financial Officers
Building Perspective Beyond Dollars & Cents
