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Live Blogging the CGMA Launch

Chartered global management accountant logo

AICPA Insights live blogged from the interactive business forum celebrating the launch of the Chartered Global Management Accountant on January 31. Follow the real-time event as it unfolded in New York and London and was viewed live in other regions around the world. A launch event in Kuala Lumpur took place earlier in the day. The CGMA was established through a joint venture between the AICPA and the Chartered Institute of Management Accountants.

The forum featured a panel discussion on the future of management accounting. Panelists discussed a new study, Rebooting Business: Valuing the Human Dimension, conducted by Oxford Economics, that highlights the value of non-financial information. The study was derived from a survey of 300 CEOs worldwide, as well as extensive C-suite face-to-face interviews, and encompasses four major themes:

  • The human dimension in financial reporting
  • Focusing on long-term strategies for success
  • Transparency as an opportunity
  • Collaboration between the finance team and C-suite
Also addressing the distinguished audience were:
  • AICPA President and CEO, Barry Melancon, CPA, CGMA
  • AICPA Chairman of the Board, Gregory Anton, CPA, CGMA
  • Immediate Past Chairman of the AICPA Board Paul Stahlin, CPA, CGMA
  • CIMA President Harold Baird, FCMA, CGMA
  • CIMA Chief Executive Charles Tilley, FCMA, CGMA
  • Immediate Past CIMA President George Glass, FCMA, CGMA

7:55 am
The group begins to assemble for the forum to start. Incredible amounts of management accounting knowledge and thought leadership are in this room right now.

8:00 am
The program is now beginning, a truly global event connecting both London and New York. It is also being viewed live in South Africa, Pakistan and Sri Lanka. Achieving sustainable success in today’s complex and fast-paced business world requires the skills that management accountants with the CGMA can provide.

8:03 am
The emcees take the stage:

  • Kathleen Hays, host of The Hays Advantage on Bloomberg Radio, in New York
  • Kirsty Wark, host of A Question of Taste on BBC2, in London
They introduce our first speaker in London, Harold Baird, FCMA, CGMA, CIMA president. There are more than 5,000 attendees watching the event from around the world. Harold thanks the attendees and states that we operate in an increasingly challenging global environment and that the CGMA represents the global strength of the accounting profession.

8:05 am
Barry Melancon, CPA, CGMA, AICPA president and CEO, takes the stage in New York. Barry notes that we’re at a critical juncture in the history of financial reporting and that the CGMA can provide businesses the reassurance that they have the talent to help them navigate today’s challenges. The challenge is that today’s market-focus on short-term financial results overshadows long-term and forward-looking information. Barry said that “those holding the CGMA will be acknowledged as trusted business strategists who can connect the dots between financial fundamentals and physical assets and a broad array of performance factors.”

8:08 am
Barry introduces Charles Tilley, FCMA, CGMA, CIMA’s president. Charles takes the stage in London and addresses how the axis of the business world has shifted and the need for management accountants has never been greater. Charles expands on Barry’s point that there is a focus on short-term financials, short-term reporting and short-term gains. Companies should be more focused on long-term goals, long-term planning and long-term results. Charles stated that “Global business leaders must learn to understand and harness the power of transparency if they are to succeed in these turbulent times.” Charles stresses the need of talented management accountants in the C-suite and that the CGMA can fulfill that need.

8:11 am
The main feature of the event is about to start: an interactive business forum on the future of management accounting. The panelists include:

  • Douglas Flint, group chairman of HSBC Holdings – London
  • Roger Tomlinson, finance director business partnering at Rolls-Royce - London
  • Helen Weir, FCMA, non-executive director at SABMiller - London
  • Gary Kabureck, vice president and chief accounting officer at Xerox Corporation – New York
  • Angelo Messina, vice president and CFO at Otis Elevator Company – New York
  • Chris Stanley, vice-president and CFO Global Network Services Americas at American Express – New York
The panelists will be discussing Rebooting Business: Valuing the Human Dimension, a new study conducted by Oxford Economics. The study shows that C-suite executives believe business reporting has to show the full value of a company, the non-financial information that Barry addressed and the components Charles cited. This study will be the main focus of the panel discussion, highlighting the value of non-financial information in financial reporting. The study encompasses four major themes:
  • The human dimension in financial reporting
  • Focusing on long-term strategies for success
  • Transparency as an opportunity
  • Collaboration between the finance team and C-suite
Almost 300 CEOs from more than 20 countries took part in the research, which was followed by 17 in-depth interviews with C-suite executives from some of the world’s leading companies.

The study indicates that 68% of value provided to the business is non-financial and 32% financial. The first question to the panelists is, “Is there too much focus on the financial value of an organization?”

8:14 am
Angelo states that the challenge is to show the market how good non-financial elements lead to financial results. U.S. GAAP doesn't record the non-financial assets which create value. Gary adds that non-financial data is important to measure and we need to unlock the value of the human dimension. "What gets measured gets done." If we can measure it, we will be able to make good, valuable business decisions.

8:17 am
Chris elaborates on their processes at American Express, combining the merchant and customer data so they can reach a targeted audience. Treat your customers as individuals. Angelo adds that market feedback analysis is one of the most valuable non-financial tools.

8:20 am
Employees are also an important factor in non-financial data. Chris adds that empowering employees and rewarding them transcends across the organization, and results in a better customer experience. These human dimensions are not currently measured in financial statements and in many ways can make or break a business.

8:23 am
The panelists move to the second theme of the study, short-term focus versus long-term sustainable success. The question posed is, “Is there a tendency in your organization to focus on the short-term or the long-term when making decisions?”

8:25 am
Angelo explains we're not going to get rid of the quarterly reports. Chris expands that the market wants long-term growth, but they also want to see the short-term results. Debra D’Agostino, editorial director of Thought Leadership at Oxford Economics, is asked to present some additional findings from the study. She states that four out of five CEOs believe that market demands are not consistent with sustainable growth policies. Meanwhile, six out of seven CEOs believe that the market’s focus on short-term rewards make it difficult to plan for the long-term.

8:27 am
Angelo explains we've seen a change in market relations. We're no longer communicating with the market with words, but with financial statements. Investor relations is no longer a communications role, but rather a management accounting role.

The third theme of the study is transparency. Eight-seven percent of CEOs surveyed view transparency as an opportunity.

8:29 am
Douglas adds that how the financial data is derived is incredibly important and it relates to the non-financial data. Roger continues that internally transparency needs to occur, to ensure employees are aware of the company's performance and give the employee a stake in the future of the company. Helen explains that once the market understands the long-term journey, the market will react more favorably to the short-term numbers. One blip in the earnings reports won't be as much of an impact.

8:33 am
Philip Thomas, senior economist at Oxford Economics, adds that transparency is both a key driver of success and a source of major competitive advantage. Seven out of 10 CEOs struggle to find the right balance between being open and protecting commercially sensitive information.

8:35 am
The fourth and final theme of the study is the importance of collaboration to connect the dots. The question to the panelists is, “How important is collaboration in achieving sustainable success?”

8:38 am
Helen explains that finance is well placed to bring all the financial and non-financial data together. It's one of the things that makes being a management accountant fun and interesting. Roger adds that at Rolls-Royce they are giving more space to management accountants so they can understand the fundamentals across all areas. Management accountants are there to help the executives understand how that human dimension is affecting the financial data. Douglas adds that the information is filtered by management accountants into strategic thinking and influences final business decisions.

8:40 am
Back in New York, Chris adds that business decision makers want that data and how they can unleash the power of the customer. In London, Helen states that confidence is important and transparency helps with that. The market reaction to one or two short-term results is not proportionate to the result's actual significance in the long-term.

8:44 am
The market wants to know that what goes on in the board room is straight forward and legitimate. Helen states that added transparency, not just in financial statements, but everything from water consumption to how one thinks about employee management, allows the market to understand better how a business operates.

8:47 am
Questions from the floor are being posed now. Question about the use of social media and how it impacts transparency. What should be secret and what should be open? Helen answers that information flow is increasing rapidly. The market is in control and directs the company on what information should be released. Does there need to be a social media policy? Douglas adds that social media has led to an immediate customer response which is extremely valuable. But customer and employee data needs to be protected, especially on social media.

8:50 am
Over to the New York location for questions. Getting the market to recognize the value of the human dimension will be difficult. How realistic is it for us to expect them to recognize it before tools exist? Chris answers that businesses are moving in that direction and there are metrics that need to be put together. Gary adds that each company will have to set metrics that make sense based on their customer and employee measures. Angelo explains that a balanced scorecard approach to not just financials but also to the human dimension will really help the market understand the business and how it operates.

8:54 am
Helen says that we can start reporting on the human dimension before there are standard measures in place. A one-size-fits-all approach won't work for every business. Roger concludes that management accountants are well placed to manage this change.

8:56 am
What role does the management accountant play in managing a business' ethics and integrity? Gary answers that ethics is critically important and in many companies the management accountant may have to sign off on the financial statements. So it's incredibly important that the management accountant be intimately involved.

8:58 am
The forum’s closing commences with Kathleen Hays introducing Paul Stahlin, CPA, CGMA, AICPA immediate past-chairman of the board and regional president of Fulton Bank of New Jersey, and George Glass, FCMA, CGMA, CIMA immediate past president. Paul and George share their enthusiasm for the CGMA and what the future holds for management accounting.

9:00 am
Gregory J. Anton, CPA, CGMA, AICPA chairman of the board, who is in London, speaks to the group of new CGMAs. He emphasizes that “…a strategic approach for a company is what investors, customers, suppliers, employees and other stakeholders look for in optimizing business performance.” Gregory notes that transparency has become increasingly important and investors and other stakeholders demand it. All of these elements will be a focus of CGMAs as they fulfill their responsibilities as management accounting professionals.

9:03 am
The forum has ended. Be sure to keep up with post-event coverage of CGMA on Facebook, LinkedIn and Twitter. CGMAs can join an exclusive online community and connect with a global network of management accountants.



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