Value Creation

Before an organization can measure, track, and communicate on its value, it is important to understand value creation and enable a value creating business model.

Learn more: Understanding Value Creation - International Federation of Accountants (IFAC)

The content areas and six capitals of the integrated report offer a useful structure for holistic internal reporting and driving integrated thinking. See the Integrated Reporting Committee (IRC) of South Africa’s latest Information Paper Aligning Internal and External Integrated Reporting.

Read more: Aligning internal and external integrated reporting | Integrated Reporting SA

The rapid modernization of the CFO and finance function provides significant opportunities to accelerate the value contribution of professional accountants to business success.

In 2019, IFAC set out a vision for future-fit CFOs and finance functions in the context of significant societal and business transformations driven by digital and sustainable development. Since then, the COVID-19 pandemic has greatly accelerated digital and workplace transformation and elevated sustainability and climate action into the spotlight. Concurrently, CFOs and finance functions have had a central role in helping organizations navigate through the crisis and its operational and financial implications.

The recent period of crisis management is turning into recovery involving fundamental shifts in how work gets done and how value is created for key stakeholders (customers, employees, investors, society), the planet as well as the organization itself.

Read more: CFOs and Finance Functions – from Business Partnering to Value Partnering

In today's rapidly changing business landscape, the role of the Chief Financial Officer (CFO) has evolved beyond traditional financial management. Organizations are now expected to report on non-financial and value-centric aspects of their operations, which has led to the emergence of the Chief Value Officer (CVO).

In exploring the role of the CVO and how the role of the CFO is changing, the Association of Chartered Certified Accountants (ACCA) and BDO Global developed a report: Chief Value Officer – The Important Evolution of the CFO. We consulted nearly 100 finance leaders from across the globe, representing a variety of organizations from large corporates to start-up businesses. The report focuses on two key questions:

• What do we mean by the term ‘value’?
• Is the CFO responsible for value measurement in organizations or is there a separate CVO role developing?
• To find out the answers to these key questions, download the report now.

Read more: The evolution of CFO to CVO

Integrated thinking can bring resilience in the face of challenges like the unprecedented risks posed by the COVID-19 pandemic, social inequalities, and climate change. Rather than delegating these risks to sustainability teams, integrating thinking incorporates them into a business' core strategy.

Stathis Gould, IFAC Director of Advocacy and Yen-pei Chen, ACCA Integrated Reporting Lead, discuss integrated thinking and the role of the finance function.

This was an external research session as part of the Value Reporting Foundation Symposium 2021.

Watch on YouTube: Integrated Thinking and the Role of the Finance Function

The Value Reporting Foundation’s Integrated Thinking Principles (‘Principles’) provide a structured approach to structured approach for considering how to create the right environment within an organization, as well as for reviewing what can, at times, go wrong. They are designed to be embedded into an organization’s business model and applied across key activities overseen by the Board and managed by the senior management team. The Principles, which are are interconnected, are implemented on three levels: the first comprises questions to the Board and CEO on how widely each Principle has been adopted across the organization; the second offers the opportunity to test how deeply the Principles have been embedded into the organization; and the third consists of management tools, practices and processes to bring integrated thinking to life.

Read more: Integrated thinking - Integrated Reporting

A vast majority (98%) of global business executives say that it is now critical for organizations to have corporate purpose, according to a new report: Purpose Drives Profit: How Global Executives Understand Value Creation Today.

Read more: Purpose Drives Profit: How global executives understand value creation today