The year 2020 has forced everyone to juggle work priorities. With the pandemic and related economic uncertainties, CAOs have had to refocus on traditional governance and compliance duties rather than spending more time on new responsibilities, such as partnering with leaders in the business. Indeed, the evolution of the CAO role will not always follow a smooth path.
This is the main takeaway from our second annual CAO survey, which for the first time included responses from superiors, peers and direct reports, as well as CAOs. But we see 2020 as a bump in the road, not a new direction for the CAO journey.
Specifically, there were three key findings from the survey. First, as noted, CAOs have had to double down on governance and compliance. Second, there are diverging perceptions between CAOs and other C-suite executives about the CAO’s value to the company. The third finding, however, shows promise for the expanding CAO role: Particularly in smaller and privately-held companies, many CEOs and CFOs expect the CAO to lead the data and analytics strategy for their organizations.
Doubling down on governance and compliance
The changes in day-to-day processes and company priorities resulting from COVID-19 and the economic uncertainty mean CAOs today are spending most of their time on governance and compliance and less on business partnering activities. A year ago, CAOs told us they expected to spend 17 percent less time on governance and compliance and 18 percent more on business partnering than what they are actually spending today. Even as we look to rise from the pandemic, they still expect to spend less time on business partnering, despite ranking it as the second most relevant area after governance and compliance. Mitigating the ongoing risk of COVID-19 with adequate controls and assessing the economic impact of the outbreak on debt compliance, financial reporting, disclosures, and audit requirements suggest that CAOs will have limited abilities to shift more time and resources to business partnering in the near-term.
Diverging views between CAOs and the C-suite
Other C-suite leaders and peers primarily value CAOs for core governance and compliance activities. C-level executives and C-level peers place lower importance than CAOs on their contributions in program management and supporting operational synergies in M&A transactions, optimizing service delivery models, developing business cases and budgets for transformations, and providing real-time analytics to support strategic business objectives. What’s more, even though 65 percent of C-level executives believe that CAOs are able to spend up to half of their time on business partnering and other strategic activities, only 9 percent believe CAOs are able to balance their time appropriately between those activities and governance and compliance responsibilities. This disconnect in expectations with their C-suite colleagues is something that CAOs must reckon with as the business moves on from the COVID response.
The opportunity in data and analytics
The views of CAOs and their C-suite colleagues converge on the importance of data and analytics (D&A). More than half of C-level executives believe the CAO is in the best position to drive their organization’s D&A strategy. And CAOs recognize D&A as an opportunity, although they acknowledge the need to develop their own skills in order to lead these efforts successfully. By using advanced analytics to partner with the business, we believe CAOs can begin to change leadership’s perception of the value they bring to their company. As they look beyond 2020, this converging objective can serve as a roadmap for CAOs.
Please download and read the full report, CAO journey: 2020 was a bump in the road, for a detailed discussion of these findings.