23 October 2015

In this guest post, Chartered Institute of Management Accountants (CIMA) President Myriam Madden argues management accountancy holds the key to restoring judgement in the boardroom. But she says more must be done to empower practitioners to demonstrate their value in decision making.

If the financial crisis has taught us anything, it’s that the decisions our leaders make matter.

In an ever more interconnected, independent world, an organisation’s poor choices affect not only the balance sheet and shareholders, they can have wide-reaching, lasting economic and social repercussions.

But you can only make decisions based on the information you have access to. In the face of a deluge of data, we have to focus on giving decision makers the right knowledge at the right time.

Had financial leaders been better informed and more assertive to hold their organisations to account, the impact of the crisis could have been significantly reduced.

With a holistic view of business across internal, external, financial and non-financial factors, management accountancy has the tools to help concentrate organisations’ attention on these key areas and support better decision making.

But, while the value of the practice is well understood and the profession is well represented in operational positions, they remain conspicuous in their absence around the boardroom table.

To find out why, CIMA recently asked CEOs, CFOs, academics, regulators, government bodies and professionals in more than 20 countries, what they wanted from management accountancy.

And what came through was that we’re still shackled by a misguided view that accountants serve the balance sheet, rather than the business. The ‘bean counter’ image of old continues to prove an obstacle to un-tapping their potential as critical players in corporate governance.

The responsibility to break free of the status quo lies with management accountants themselves. But we have to empower them to showcase how they can add value.

In partnership with the American Institute of Chartered Public Accountants, CIMA has developed to try and support practitioners in achieving this.

The four principals – Communication, Relevance, Stewardship and Impact – underpin our approach to professional qualifications and personal development.

Through them we aim to equip management accountants with the ethical, considered viewpoint they need to become leaders who can effectively challenge decisions, and restore judgement to organisations.

But we can’t do this in isolation. We have to continue to engage with the wider network of industry, government and academics to share experiences and build the collective insight needed to enact change.

This year we are pleased to join University of Edinburgh Business School’s leading academics to do just that. At the 2015 CIMA President’s Conference we’ll be examining the link between leadership, business models and society, to gain new insights to inform better practice.

The financial crisis focused minds on decision making. The challenge now is to make sure we learn from the mistakes of the past. I believe management accountancy has a huge opportunity to help restore judgement and improve corporate governance, not just for the benefit of business, but for us all.

Myriam Madden, FCMA, CGMA, is CIMA President for 2015/16. Together with Professor Paolo Quattrone, she will host the CIMA President’s Conference at University of Edinburgh Business School in October 2015.