Presentation by Roger Tabor, Chair of the Professional Accountants in Business Committee of IFAC, at the Institute of Cost Accountants of India's National Cost Convention, New Delhi, India, March 2012.

1. Role of PAIBs in Sustainable
Growth of Organizations
Institute of Cost Accountants of India
53rd National Cost Convention, March
15 2012
Roger Tabor, Chair PAIB Committee
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2. Terms of reference
Defining My Terms
• Sustainable Success
– Development of an organization’s economic, operational and market
scope and performance in a manner that creates value for its owners
without compromising its ability to keep doing so; that fosters
continuing availability of all the resources on which it relies and
stability of the communities it serves and draws from; that can
respond effectively to threats and opportunities; and maintains the
viability of its business model.
• Professional Accountant in Business (PAIB)
– A professionally qualified accountant, subject to a code of
ethics, committed to continuing professional development, working
within or in direct support of the management of a commercial or
public sector organization/
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3. Terms of reference
Defining My Terms
• Sustainable Success
– Development of an organization’s economic, operational and market
scope and performance in a manner that creates value for its owners
without compromising its ability to keep doing so; that fosters
continuing availability of all the resources on which it relies and
stability of the communities it serves and draws from; that can
respond effectively to threats and opportunities; and maintains the
viability of its business model.
• Professional Accountant in Business (PAIB)
– A professionally qualified accountant, subject to a code of
ethics, committed to continuing professional development, working
within or in direct support of the management of a commercial or
public sector organization
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4. Drivers of Change
External Impetus
• Megatrends demanding response:
– Natural resource depletion and scarcity
– Climate change, including more common climatic events such as drought
– Social inequalities and inclusive growth
– Labor exploitation
• Sustainable development & sustainability of organizations
are current issues for:
- Politicians
- Business Leaders
- Consumers
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5. Business Response
The Enlightened Business Response
• Opportunities and threats are real
– Direct to our organizations
– Partly indirect via the economy and infrastructure
– Indirect via regulatory drive
• A business case exists
• Safeguard reputation
• Cost saving - energy efficiency, waste minimization
• Opportunities for innovation leading to new revenues
• Pre-empting regulation and ensuring compliance
• Stay competitive in the long term
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6. Business Response
The Enlightened Business Response
• Opportunities and threats are real
– Direct to our organizations
– Partly indirect via the economy and infrastructure
– Indirect via regulatory drive
• A business case exists
• Safeguard reputation
• Cost saving - energy efficiency, waste minimization
• Opportunities for innovation leading to new revenues
• Pre-empting regulation and ensuring compliance
• Stay competitive in the long term
• PAIBs need to understand the threats and articulate and
promote the business case
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7. The Profession’s Response
Competent and Versatile
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8. Competent and Versatile
Drivers of Sustainable Success
Customer and Stakeholder
Focus
Sustainable Organizational Success
Effective Leadership and
Strategy
Integrated Governance,
Risk and Control
Innovation and Adaptability
Financial Management
People and Talent
Management
Operational Excellence
Effective and Transparent
Communication
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9. Competent and Versatile
Drivers of Sustainable Success
Customer and Stakeholder
Focus
In order to
Sustainable Organizational Success
Effective Leadership and
Strategy
articulate the
Integrated Governance,
Risk and Control
business
case, PAIBs
Innovation and Adaptability
need to
Financial Management understand and
People and Talent
mobilize the
Management
eight drivers
Operational Excellence
Effective and Transparent
Communication
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10. Business Response
Broad Stakeholder Context
• No longer enough to focus on the owner/provider of
finance
• What do environment, climate, community, society and the
organization mean to each other? How do we nurture the
relationships?
• Stakeholder engagement grows understanding
• Which environmental, social, and governance factors
facing the organization matter most?
• Include key business relationships such as
customers, suppliers and employees
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11. Business Response
Develop Understanding of Relevant Data Flows
• Capture and interpret data on
environmental, social, governance (ESG) issues
• Examine cross-linkage, dependency, cause & effect
• Identify and manage what’s important
• Communicate/report effectively to the organization and to
stakeholders
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12. PAIB Response
Develop Understanding of Relevant Data Flows
• Capture and interpret data on ESG
• Examine cross-linkage, dependency, cause & effect
• Identify and manage what’s important
• Communicate/report effectively on what matters - to the
organization and to stakeholders
• PAIBs should be good at
– Interpreting data & synthesizing usable information
– Dealing with financial & non-financial information together
– Identifying links between different drivers of performance and value
– Connecting processes, systems, and data across organizational
functions and along the extended supply chain
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13. Non-Financial Value Provided to the Business
(Percentage of those who selected 8-10 on a scale of 1-10)
Source: CGMA: Rebooting Business: Valuing the Human Dimension
13
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14. Business Response
Shape and Respond to Events
• Excellence in identifying and managing strategic and
operational risk
• Scan the environment for change and trends
• Prepare for the inevitable e.g., water scarcity, high
commodity prices, greater regulation
• Move beyond the comfort zone
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15. PAIB Response
Shape and Respond to Events
• Scan the environment for change and trends
• Excel at identifying & managing strategic & operational risk
• Prepare for the inevitable e.g., water
scarcity, flooding, high commodity prices, greater
regulation
• Move beyond the comfort zone
• The PAIB role:
– Both strategic and analytical
– Spotting the causal and connections
– Risk to opportunity
– Risk management a core PAIB competency
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16. Business Response
The Business Model
• Insights from all sources must inform the business model
– For management: what drives our value creation? how to manage it
better?
– For integrated reporting: how do we report on performance of our
business model? Compliance reporting alone insufficient
• Relevance of the business model today and tomorrow
• How best to deal with inter-temporal conflicts?
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17. PAIB Response
The Business Model
• Insights from all sources must inform the business model
– For management: what drives our value creation? how manage it
better?
– For integrated reporting: how do we report on performance of our
business model? Compliance reporting alone insufficient
• Relevance of the business model today and tomorrow
• How best to deal with inter-temporal conflicts?
• The PAIB role:
– key area - requires capabilities and skills to perform as integrators
– Many tools at disposal, e.g. ABM/C, the balanced scorecard, driver-
based forecasting and budgeting
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18. Competent and Versatile
Accountants as Strategic Team Leaders
Professional Attitude and Mindset will require:
– Ethical and strategic leadership
– Organizational and environmental awareness
– An investor and wider stakeholder focus .
– Professional judgment
– Being comfortable dealing with change, uncertainty and complexity
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19. Competent and Versatile
Accountants as Strategic Team Leaders
Professional Attitude and Mindset will require:
– Ethical and strategic leadership
– Organizational and environmental awareness
– An investor and wider stakeholder focus .
– Professional judgment
– Being comfortable dealing with change, uncertainty and complexity
The PAIB will need to be:
– Politically astute
– Alert to changes in relationships and events
– Always armed with the facts
– Courageous in support of ethics
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20. Supporting Sustainable Growth
Embedding Sustainability
• Leadership and ownership at board level
• Clearly defining the business case and strategy
• Identifying stakeholders and engaging them effectively
• Sound governance and oversight
• Establishing value-driven goals and targets
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21. The Accountancy Profession
What Is The Profession’s Role?
• Accountancy bodies to support getting relevant know-how
• Foster skills and mindset needed by accountants
• Develop simple guidance for small businesses
• Influencing regulators and others
• Beating the drum for effective governance and
oversight, finance professionalism, etc.
• Professional input in the development of an integrated
governance and reporting model
• Promoting integrated reporting as a catalyst to integrated
internal management of sustainable business models
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22. IFAC Professional Accountants in Business
Questions?
• Also see www.ifac.org/PAIB
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