ICPAR vice president John Bugunya elaborates on how CFOs are redefining leadership today. The former CIMERWA Plc executive director reflects on the challenges and opportunities shaping the future of finance, encouraging executives to step out of the box.
What persuaded you to join the panel of judges for the 2024 CFO Awards?
What excited me is to see the impact that CFOs are making beyond the fundamental roles related to financial stewardship. I think it's exciting to see CFOs who are taking on more of an enterprise-wide leadership role where they are driving not just financial reporting, but they're also instrumental in human capital development, driving strategy, and contributing to the growth of their businesses. I would like to see how CFOs are transitioning into this journey that has traditionally been a difficult one. Even here in Rwanda, we are seeing an interesting trend where experienced accountants are comfortably getting out of traditional accounting and financial reporting into business, strategy and project management roles that require cross-functional collaboration and project management. So, for me, these awards are a chance to see how that journey is coming along across the region and what efforts different CFOs are making towards developing those skills and abilities.
Share some experiences from your own career background that you think will help you bring a unique perspective to the judging process.
Moving from the audit practice in Uganda to the UK and subsequently to the banking industry in Rwanda presented a steep learning curve as well as an appreciation of the different organisational cultural aspects. As such, I will be sensitive to the fact that we'll be talking to people from different cultural backgrounds and different institutions that have different journeys. Some organisations such as those in regulated sectors or with institutional investors are usually more mature than others and can show a clear linkage between their sustainability strategy to the overall business strategy, budgets, as well as reporting progress realised in their integrated reports.
And therefore, the speed of execution or progress of these organisations is bound to be different from entities that don't have that benefit, that are not able to leverage off their group structures and procedures in place. It’s important to be sensitive to that and not assess all candidates using the same yardstick, appreciate that context and be able to recognise the efforts and actions being undertaken as opposed to the point at which they are.
How do you ensure fairness and impartiality in a situation where companies from different sectors and of varying sizes are involved and CFOs from different backgrounds are competing?
I think the topical areas covered by the awards are very helpful. We would then need to have a discussion to say within that specific thematic area, ESG for example, how do we evaluate those entities? Because there are entities that are still at their infancy, such as those that have simply developed their policies and procedures, and they are at that point in time.
There are others that have gone further, especially those that are in manufacturing or extractive industries like mining and so on and so forth. Those are regulated entities and may be required by law or regulations to have certain things in place. So even in their level of reporting to do with, for example, gas emissions, vibration, and noise, they are bound to be a bit more mature in their journey. As we evaluate the nominees, my hope would be that we'll be able to come up with some sort of thinking around how to assess different companies in different industries. Some are regulated, while some are not. How do we do some sort of comparison?
In your view, what impact or role do these awards have in the finance profession?
At the Institute of Certified Public Accountants of Rwanda, where I am privileged to serve as a vice chair, what we did about five years ago was come up with financial reporting and excellence awards that replicate what you're aiming for with the CFO Awards.
We had the young CFO, we had the public sector entity of the year, and we had different categories. And what we've seen over the five years is that in the first one or two years, some entities were hesitant to submit their financials. But over time, as the appreciation for these awards increased, entities that didn't participate in the first few years were now coming on board because word went around that there's a lot of value to gain from this.
I am therefore optimistic that once we do the CFO Awards, we will bring some key partners on board and create good will, which will demonstrate that there is value to be gained from the awards process.
How would you define an exceptional CFO? What makes someone stand out in this field?
If you had asked me this question, maybe ten years ago, I would say, ‘very good at ensuring that your financial operations are in place, accurate financial statements submitted on time. And making all the stakeholders happy’. But I'm sure people would look at me and laugh if I said that now. I think the expectations have really changed. I was looking at an article about a week ago from the US and they indicated that more than 50 percent of FTSE 100 CFOs are not chartered accountants. They are looking for CFOs that are not CAs. And they're looking for CFOs that are able to understand the debt and capital markets. They understand capital raising, interactions with stakeholders, regulations and how these things are moving. That, for me, was an eye-opener because in our part of the world, you're still expected to be a CA, as a start. And then everything else is a bonus thereafter. But I do anticipate that the time is coming where that may actually change. Maybe not for the regulated entities like banks, but certainly for other entities that are not regulated.
To really stand out as a CFO, without a doubt, you need to have your fundamentals in place. You need to understand accounting processes, internal controls, and risk management. But beyond that, you really need to be seen as an enterprise leader, who in the absence of the CEO, can stand in.
That means you understand strategy, can influence and drive strategy, understand business operations and the strategic risks that the institution is facing, and what actions are being put in place to address those. You would really need to be someone that is beyond finance, that can actually connect the dots across the enterprise. That's where the bar is now being set.
And I think a lot of CFOs are not there yet, but I think the realisation is that companies are looking for something beyond bookkeeping and financial stewardship. They're looking for that extra benefit.
What advice do you have for upcoming CFOs who want to be recognised for their work and be successful in senior leadership?
One would obviously be ensuring that they understand the fundamentals or technical aspects of finance, because those are sort of like the foundation of the house. So, you would ideally need to have a strong understanding of accounting processes and financial management. Depending on where you sit, you'd also need to understand some of the emerging standards on sustainability, the international standards on auditing and so on.
Beyond that, I would also say that one then needs to try to pick up skills that are not necessarily technical – usually referred to as soft skills - such as leadership and management of human capital among others. As a result, some people are going for MBAs to upskill themselves on the leadership side.
Lastly, it's about discipline. What I mean is putting in the effort, because a lot of our young professionals expect to become CFOs within a couple of years after graduation, maybe two, three, or four years. And the reality is that there are things you pick up along the way. As you work closely with other professionals who have been in the game for longer, you leverage on their expertise, and you learn from what they are doing.
The discipline would be in showing up every day and being intentional in who you're learning from. Identifying mentors and coaches that you feel possess the right attributes, and just trying to bounce ideas off them, But, being disciplined also in terms of how you develop your profession. If you've decided to pursue a certain programme or course or training, then be disciplined in terms of executing that.
