Pamela Steer:
The world is changing quickly so no one is immune from that. I would say that the changes are accelerating in pace and the demands on the CFO of today are very different.
Narrator:
Welcome to Accounting for the Future, a BDO Canada podcast for financial leaders to navigate change and achieve business growth. We'll uncover the challenges financial leaders may not have dealt with yesterday, but we'll definitely have to manage for the future.
Anne-Marie Henson:
Hello and welcome to BDO's Accounting for the Future. I'm Anne-Marie Henson and I have the pleasure of welcoming Pamela Steer, the President and CEO of CPA Canada since April of 2022. Prior to joining CPA Canada, Pamela has held several CFO roles at various companies in the technology and financial services sectors among others. Pamela, it's really a pleasure to meet you.
Pamela Steer:
Well, likewise, Anne-Marie. Thank you so much for having me on the podcast. I'm very grateful to BDO for the invitation. It's always great to be able to connect with our colleagues in the profession and just talk about what's happening in our world.
Anne-Marie Henson:
Exactly. Well, I'm really excited to have you. And before we get started on our topic today, I thought maybe you could give us a little bit of background into who you are, where you've come from, and how you got to where you are today with your role at CPA Canada.
Pamela Steer:
Thanks so much, Anne-Marie. I would say I have taken a path slightly less travelled for CPAs. I did start of course with my CPA, and I went through the firm route and very quickly moved into telecom and telecommunications, which I really enjoyed and at that time, was part of very, very large corporations, as well as quite small corporations. In fact, employee number two, three, and raising that first million dollars. My career has been split quite evenly across operating roles, as well as finance roles because I love them both, and I like dealing with people. The operations of the business, I think, is a capability that can really take those CPA transferable skills and make them much bigger.
During my travels in telecom and technology, I met someone at the Workplace Safety Insurance Board who asked me to come on and help out for a while. The awhile ended up being a seven-year journey at Workplace Safety Insurance Board and a massive turnaround, financial services, broader public sector, stakeholder management. It was just a fantastic opportunity. From there, that love of social justice and wanting to do good work in a business sense, but also giving back to the communities in which we live.
I would say it was that realization at the WSIB that has eventually led me to here at CPA Canada, where there is of course the CPA aspect as well as the operating aspect and doing what I think is some essential work and an essential role that we play as CPAs in the Canadian financial system for Canadians of all stripes as well as for our professionals in our community.
Anne-Marie Henson:
Wow. Well, thank you. It's a really impressive background and I'm really excited to be talking to you. I think you're the perfect person with your background in finance, in accounting, but also like you said in operations for us to talk today a little bit more about the ever-changing role of the CFO. So, on this podcast, we've actually had a lot of discussions over the past year on just the general changing landscape of businesses in Canada, including the need to adapt to changing technologies, the increasing importance of ESG in the financial reporting, but also the operational landscape, expansion and growth strategies, mergers and acquisitions, looking at new sources of funding.
So, I think all of these changes have had a really significant impact on what I'd say is a critical role of the CFO in an organization. As the President and the CEO of CPA Canada, I get to see firsthand a lot of the changing expectations of CPAs today, especially in their capacity as the CFO of an organization. So, you've been at CPA Canada for about a year now. You have a year under your belt. So, you had probably a chance to talk to key stakeholders, understand a little bit more about CPA Canada's objectives and your mission. So, with that year under your belt, what do you think you'd say are the most important skills that a CPA needs to have today to be a really effective CFO?
Pamela Steer:
It's such a great question, and as I reflect on the last year, in fact, my anniversary was last week.
Anne-Marie Henson:
Congratulations.
Pamela Steer:
Thank you. What I see is that the world is changing quickly, so no one is immune from that. And I would say that the changes are accelerating in pace and the demands on the CFO of today are very different. We often talk about technology, and it really is that two-sided coin. It is an enabler and it's also a real challenge to get around. So, for my money, so to speak, I think the CFO of today and tomorrow is a very different individual than it was 20 years ago when yes, we had computer systems. Of course, we did, but we weren't so interconnected. We didn't have so much data at our disposal. We didn't have the notions of stakeholder capitalism versus shareholder capitalism. What we are seeing more and more in my opinion is that CFO taking on the number two role at an organization.
Whereas in the past and it could still be indeed, the chief operating officer or the head of sales, often the CFO now is seen to be the role in which the whole organization can be seen. It's either distilled down to money, so the finances continue to be very important. That's a table stakes area. However, because of a CPA's really great grounding in critical thinking skills, professional skepticism, even dare I say, the auditing role that provides that discipline and framework from which to ask really good, thoughtful probing questions and the ability to really take data and not only crunch the numbers or crunch the data, but really come up with those meaningful KPIs that drive a business. Whereas the CFO of the past was very focused on hindsight.
So, the quarterly grind, the annual report, that's based on everything that was in the past. Today's CFO is really looking for foresight. What's going to happen? What is the past as context telling us about our business that we can then take and move forward? Then that's providing not just the hindsight, that's still there and that's still very important. Fortunately, systems and technology really enable that for us, but now it's taking the next step and saying, "What foresight can we gain out of that?"
Then the really, really secret sauce of the CFO role, what insights can we then provide to management, to the board, to strategy, to really plan and think in a forward-looking way? The CFO of the past was very focused on the past, and CFOs today need to be very focused much more than ever on the future. So, I'm very excited about what that means for CFOs and our profession as CPAs.
Anne-Marie Henson:
That's great. No, it's really interesting. So, I became a CPA about 15 years ago and it seems like yesterday, but I definitely didn't learn in school and in my first few years interning at the firm about all these skills you're talking about, the forward-looking insights, right? So, it's no longer just report on the historical numbers and put them in a nice readable format. It's analyzing that information, comparing it to market data or what we're seeing outside in terms of trends, and then really helping to build a story around that to make it understandable in all other aspects of the organization, which seems to be pretty far from what I remember learning in schools.
So, I guess it's great that you're excited about it because it could be a little bit scary for some who haven't necessarily had that background or that knowledge that they gained. So, how would you think all these changes are impacting just the general education and the experience requirements of CPAs today versus a CPA from 10, 15 years ago?
Pamela Steer:
I think all aspects are in evolution. I mean, they are anyway. Things move relatively quickly or slowly. I would say we are in a very quick pace at the moment. So, I'm very excited to be at CPA Canada, particularly at this time, because as the world evolves in different ways over time, I think we are in certainly a very fast evolving stage of our growth as a profession and our change as our profession. And I'm delighted with the new competency map that the CPA profession put out last year, so in February 2022, which is our new competency map 2.0.
So, not only does it focus on those fundamentals that you would expect to know or to know that your CPA has, which include of course critical thinking and discipline, audit skills, tax skills, accounting, those fundamental technical skills that we're really well known for. We've now added to that elements of advanced technology and utilization, data and data governance, ESG, and all of the sustainability activity that's happening in the world now have become a part of the new competency map and the profession is working towards implementing that in a new CPA certification in the coming years. So, that is really important and exciting. Education has changed.
The pandemic certainly had a massive impact on that where we learned, I'm going to say, I'm going to actually vow that I don't think 100% remote is good for anybody because I don't think it develops some of those skills you need to read a room to be interpersonal and have those social skills, which are absolutely critical and crucial. But the flexibility of having hybrid choices, of dividing sometime between in-person classwork as well as some of the most more focused things that maybe you can do online that adapt to different lifestyles and different ages and stages may open up new opportunities for newcomers to the CPA program.
Of course, we have your somewhat typical straightforward path, go to high school, go to university, specialize in finance or accounting, take your CPA designation and move into the world of work, but we also want to make room for those who have a diversified background.
We can see that that diversity of thought and experience will be really beneficial to our profession to keep it vibrant, to keep it fresh. So, those elements of education as well as the schooling, and you can distinguish between those. There's a great quote from Winston Churchill, and I know I'm not going to get the wording quite right. It was something to the effect of ‘I had a great education, and my schooling did get in the way of that’. So, there's book learning and then there's actual education and learning. I think there's acknowledgement that we should really focus on the education piece and have the schooling support that as we move into this new framework of learning and developing the next CPA generation.
Anne-Marie Henson:
Wow. Well, I love that. I find it fantastic. It's great to see how this profession continues to adapt and evolve to the needs of a changing environment. So, it's wonderful to hear. I'd like to maybe go back for a second on something you said that I've seen as well. I think this could apply not just to CFOs, but even CPAs who are working in a professional services firm like myself. It's really that need not just to focus on the historical finances of a company and not just to look at what happened last year and report on those, but really be able to provide insight to interpret what's happening and to be able to be more forward-looking.
Although some of this isn't necessarily new, it does seem to be a lot more prevalent today is that need for someone in finance to be able to be a lot more forward-looking. I was wondering, from your perspective, why do you think that's happening so much today?
Pamela Steer:
I think partly that as there is more and more data available to businesses, I would say particularly with the movement into sustainability and ESG, climate in particular, there is so much data that comes into a business and where in the organization is most accustomed to complex different levels of data and really telling the story. You could argue, and indeed in many organizations that Chief Operating Officer sees all the KPIs that are operational.
However, in the CFO, I think you have that combination or certainly the potential for that combination of really understanding how the numbers translate into financials, into people metrics, because often our organization's very service-driven or people-driven, and then being able to take different kinds of metrics and different pools of data and really synthesize and dig into them and also provide that level of skepticism to say, "Yes, I understand that model is telling you this or you think it's telling you this, but did you have the right inputs or what was it for? What were you trying to solve for? What is the problem?" I think that skillset is something that the discipline of becoming a CPA really sets you up in good stead for.
Then often, a lot of those KPIs or operational metrics and data make their way into financial statements or other corporate reporting like the MD&A. When you have to sign off as CFOs and CEOs generally have to sign off on controls and the work that's done before it's published, certainly in public companies, it's natural that the CFO's going to say, "Okay, if I'm signing my name to this and I have a risk because I'm putting my designation at risk every time I sign, I'm going to make darn sure that I know from where all this data is coming from." I also think some of the training of a CPA, unlike other roles, is to take very complex topics and tell a story. That communications piece is something that I don't think if you said CPA, the general public would say, "Oh, yeah, those are storytellers."
However, if you get in the world of business, that is a CPA or certainly a CFO's job is to tell a compelling story based on the data that you have and make it understandable and compelling to a board, to stakeholders, to shareholders, to analysts, et cetera. I think our skillset and the underlying discipline and technical depth that we bring to the role puts us in a very unique position to be able to do that, telling story in a very credible way.
Anne-Marie Henson:
Absolutely. No, I love that. It actually leads well into my next question for you. So, we're talking a lot about just the accessibility of data today and information and how that's changed, how we analyze information, and then how we report on it. So, I think one of the big responsibilities that we've seen CFOs get involved in recently and be at least in certain parts responsible for is digital transformation within organizations. It's such a key part of companies being able to stay competitive and keeping up with trends and really being able to have access to all these important piece of information KPIs. So, companies are more and more looking to upgrade systems, move to cloud computing, and be able to make faster decisions.
A lot of CFOs may not necessarily have a strong background in IT, and yet all of a sudden, they're a key stakeholder in these implementation projects. It could be a daunting task. So, in your view, what do you think CFOs could do to help really add value to a digital transformation process and make that as beneficial as possible for themselves and the organization?
Pamela Steer:
I think that's so important, and you're absolutely right. I think there are a couple of reasons why digital transformation is only now coming to the CFO role in many respects. One is that we've been doing so much digital transformation in operations in organizations. So, the front-facing, it's usually the cobbler shoe story where the financial investments are being put in the front lines. So, the back office takes a back seat, if you will, and has been starved for a long time in many respects. Now that those operational frontline digital projects or programs have largely been put into place, organizations are realizing, "Oh, my goodness. My back office can't keep up. I've created a technical deficit in my organization."
I now realize we have a lot of cyber vulnerabilities. That has been becoming more and more of an issue for the CFOs of the world because of course, the bad guys are looking for money. Where are they going to find the money? Oh, in the financial systems. So, those vulnerabilities need to be shored up and mitigated or hopefully eliminated. So, what you're seeing now is a flood of digital bootstrapping on the finance and the back-office side and organizations, including CPA Canada, are looking to solutions that are more managed service. They are more efficient, effective. They don't have to worry about patching so much.
So, if they have a managed service, that's done for them and using something off the shelf because we are all realizing the perils of having customized systems. They're not easily upgraded; they're not easily patched. We don't have the financial resources to have essentially an army of IT specialists on site, nor is that our core business. So, you're right in that it isn’t, or it hasn't been the role of the CFO. I'm not an IT guru, for sure, but I've managed multi-hundred-million-dollar projects. This is where you know that you have, again, that critical thinking and discipline, the logic to provide a framework, and then to coin a phrase from an old TV show, you call a friend.
So, you make sure that your steering committees are staffed appropriately with the right combination of business experience and technology experience. Of course, now it has to be every large technological program that you put into place. Actually, the technology is somewhat a heavy lift, but it's a somewhat more minor piece to the change management, the process change piece that has to be done with people. It's that people, process, technology triangle that you have to get the angles correct on to make sure that your large enterprise project is going to go well.
So, yes, technology is really, really important to enable that, but you don't want it to be the tail that wags the dog. It's the change management, the process change, that can utilize the technology. You don't want to build a better buggy whip. You want to build the Tesla of the future.
Anne-Marie Henson:
Absolutely. No, I absolutely love that. It's great to hear about all the different skills that CPAs and CFOs have and how they can adapt to today's needs. You mentioned another really important topic that we're all discussing today, and I think we're hopefully going to continue to discuss even more in the future. That's ESG, sustainability, climate change, and it's another area that some of us, at least the CPAs of 10+ years ago, really didn't learn in school, right? We're hearing a lot about it in the past several years, and yet it's becoming a huge area of focus internationally. But I guess I'd like to hear your thoughts about why CFOs in Canada of today, why do we need to care about climate change, sustainability, and ESG?
Pamela Steer:
Again, it's a great topic and part of why I wanted to be part of CPA Canada. ESG, sustainability to me is just risk and it's managing risk and looking at risk and opportunities in the economy. Canada is uniquely positioned, in my opinion, internationally, and we're seen that way for a number of different reasons and a number of different factors contributing to that. One is that we sit next to a very large neighbor that may have politicized the idea of ESG, whereas here we have embraced it and said it's about data, it's about the science. The science is irrefutable in my opinion. I understand others believe that the facts are subject to interpretation, and we are also a country that has a lot of resources. So, we're a natural resource strong economy, and that has a lot of challenges ESG-wise.
So, we should be part of the solution. We have the blessing that we have very technically gifted CPAs with great experience who understand both international standards as well as American standards, American GAAP, and that is seen as very helpful. We also have government that is very encouraging and embracing of sustainability and technology sector and even a natural resource sector who want to make positive change in a transition world. The difference between our jurisdiction in Canada versus a jurisdiction like Europe, Europe was quite green, because they don't have a natural resource-focused economy to move from.
So, the notion of transition, and I would include Australia, New Zealand in that as well. How do we take what I'll call, and this is bad language, but the dirtiest industries? Because that's where we're going to make the most impact on the planet, is to move those industries, make them as clean as possible, make them as well managed as possible, and then chart the path forward. That is the transition. You can't turn off the taps tomorrow. We wear things that contain oil and gas, as an example. We heat our homes. The north can't do without that heating. So, how do we have clean heating? We're very blessed in Ontario, certainly with respect to hydro-generated power. So, that's exceptionally clean.
We also have a really strong First Nations group that can be brought into things like biodiversity, things like economic reconciliation, and that population is the fastest-growing population in Canada. So, let's help enable that community as a business community as well and foster development and reconciliation in that way. And internationally as well, we are seen as we're Canadians, we're the good guys. We are pragmatic. We offer solutions. We want to work together. We have great convening power.
When you think of the concentration of assets and asset management in Canada, if you include the big banks, the big pension plans, you're talking about many, many trillions of dollars of assets under management and investments in either debt or equity or some combination of many, many, many organizations globally, not just in Canada. That is exceptionally helpful as international organizations like the International Sustainability Standards Board or the IFRS Foundation or IOSCO for the regulation of stock markets globally. Canada has a really, really strong role to play, and we're really well respected.
It's very exciting to see that we, in the last just couple of years, two, three years, have really hit a tipping point with respect to sustainability in terms of acknowledgement. Now, okay, what do we do? Let's move forward. How do we incorporate it into business? It's not just sustainable business, sustainable finance. It's just good business and good finance.
Anne-Marie Henson:
Absolutely. I love to hear about that. I've always felt, and you're confirming that as Canadians in all aspects, but particularly CPAs and our role on the global scale is that we definitely punch above our weight in terms of our involvement in these types of committees and the influence that we have on the global scale because we do tend to be relationship, collaborative, driven people. So, it's nice to hear that we have a voice internationally and that we can help to move these initiatives forward. So, it does just sound to me again that there's a lot of different hats that CFOs need to wear today or CPAs, not just CFOs. For some of us, anyway, it's a little bit uncomfortable.
It's outside our comfort zone. We might be critical thinkers. We might have learned a lot of great problem-solving skills, but it might make us a little bit uncomfortable to start talking about ESG and sustainability if that's not really our area of expertise. So, just thinking about all these different roles and responsibilities that we can play, for someone who doesn't have a lot of knowledge on digital transformation or on ESG, do you have any advice for those CPAs who may be looking to gain more knowledge in those spaces but don't necessarily have it today?
Pamela Steer:
Absolutely. It really depends on, I was going to say age and stage, but where you are in your tenure as a CPA and your role and the expectations of you and where your interests lie in the future. I would suggest just doing some light reading. You don't get a huge time or take a course, although you can do that. But if you're a CPA, look at your provincial body and the information they have available. Certainly, CPA Canada has been a proponent of sustainability since long before it was cool and current, so many, many years of being part of sustainability initiatives and frameworks.
I actually first really got in touch and involved with CPA Canada through Accounting for Sustainability. For anyone looking for some primers or some ideas about sustainability, Accounting for Sustainability has amazing resources for anyone. Being part of that CFO leadership network globally, it was wonderful to see a group of CFOs come together, generally large organizations or pension plans, et cetera, and saying, "Okay, we have this that we have done, so setting strategy or evaluating businesses, and now we're going to publish it." So, any organization that is smaller or different or hasn't done it before can take the benefit of our learnings and apply it in their organizations.
So, there are some really great worked examples and different aspects of sustainability that CFOs controllers, accountants, and others or board members as well. Governance is a big part of this as well. They can avail themselves of that at Accounting for Sustainability's website or CPA Canada's website. So, again, the life cycle of a business, so whether you're a small startup, mid-sized, large enterprise organization or at a board level on the governance side, there are a lot of tools available to you to do some light or heavy reading. If you want to go on, there's a lot more technical education you can get as well.
CPA Canada just launched its value creation certificate that goes into all aspects of sustainability and it's in a much more deeper dive area, but there are so many resources all of the sudden it feels like. They've been building up over the last couple of years, but there's a lot out there that a ton of different organizations are now publishing, and it is all helpful in terms of learning. It is a little daunting though, because you can see what we call the alphabet soup of the certainly recent past with all sorts of different organizations, different frameworks. You'll hear about TCFD, you'll hear about SASB, you'll hear about integrated reporting, you'll hear about CDP. I can go on and on and on and list the alphabet probably three different ways from three different ways. You will get this alphabet soup.
Fortunately, it's now coming together and coalescing around the International Sustainability Standards Board that was created just over a year ago. Again, where Canada punches way above its weight, one of two global offices for the new ISSB is located in Montreal, right in our homeland. So, we should be very, very proud of that. And it was because of what they call the Canadian Coalition of Champions. So, organizations, firms, and government coming together to create an environment in which the ISSB would want to come to Canada, but also, those other things I mentioned were pragmatic. We can convene very quickly. Canadian CPAs have such a depth of well-respected technical knowledge when it comes to accounting and now sustainability.
Anne-Marie Henson:
Oh, that's great. Well, and thanks for providing all that information. It does seem sometimes like there's just so much information out there, it's hard to know where to start. So, given some great advice to people who are looking to read up on various topics, and I think one thing it's important to know is that I guess one individual can't necessarily meet every single need or demand of an organization. I was thinking about this a little bit, even in the context of companies.
We've talked a lot about individuals and CPAs and what influence they can have at their organizations or worldwide, but something came up recently, and I thought it was a great piece of advice or information for companies themselves who are looking perhaps to add a CFO or a financial individual to their organization. I think what I took away from this conversation with a colleague is that his client to company, very fast-growing company, felt that they needed a CFO. They went out and did a job description and posted it, and they were really struggling to find that right person. They ended up taking a step back and going through a bit of an exercise where they looked at the organization's strategy and not just the needs or the holes today in the organization, but where do they want to be in five years?
Then mapped out what competencies they thought a CFO for their company would need to have and went back to the drawing board, and redrew the description of what CFO they were looking for and what skillset they were looking for. Whereas, at the beginning, it was like a buffet of various skill sets and things that they thought they needed. So, I thought that was just a really interesting way to look at internally a company's own strategy and plans for the future and really try to match that skillset of the CFO to what you truly need to move forward in your organization.
If I flip that around to perhaps a CPA or a CFO who could be out there deciding that it's time for them to look for a career change for themselves, do you have any advice or piece of information you could share to help people on their path to find that next career for themselves?
Pamela Steer:
Absolutely. One of the wonderful things about being a CFO with the CPA credentials certainly is the transferability of the skills. It's not easy. I'm not going to say it is simple, it isn't, but there are so many different organizations out there and different types of organizations. So, what is the thing that gets you up in the morning? As I said at the top of the conversation for me, I didn't realize until I went to the WSIB that doing something that matters for society actually was really important to me. It was like, "Oh, hey, light bulb mid-career. Who knew?" So, I think it's really putting down those values that matter the most to you and then identifying the target industries and identifying the actual companies. Why do they excite you? Why do you want to be there?
Then what would it take for you to make that change and really demonstrate that you have those competencies they're looking for? Because some, I might want to be a circus performer. I'm exaggerating to make a point; I might want to be a circus performer. Well, I think those skills are not going to happen for me at this point in time to make a professional move like that, obviously, wildly inappropriate for this discussion, but it's what is in the realm of possibility.
I would say being a CPA, being a CFO in Canada actually does expose you to a wide range of possibilities to move the skills that are consistent no matter the organization or the industry that you're trying to target, but really aligning your skills, your background and your competencies with your values and deciding to really go for it and then go where those people are or those organizations are or those board members are, whoever would be likely to do that hiring and go where they are and find out more about their industry associations or really what makes them tick and talk to people in your network who know people in those organizations or those industries who can be helpful.
Because one thing that is really a wonderful part of being a CFO and part of the CPA profession is that the base skills are so transparent and so meaningful, and so transferable among a plethora of different organizations and industries. I think that when you add on the new competencies that we're talking about today, so digital transformation, data governance, advanced technologies, ESG, there is so much demand now and even more so in the future that new CPAs can have a totally different and vibrant career doing a plethora of things and existing CFOs who have that experience, that gravitas have been there, done that also have so much to offer industries and organizations. I think we are standing ourselves in good stead for years to come.
Anne-Marie Henson:
Wow, that's fantastic and very exciting time, I think, for CPAs and CFOs in Canada. So, Pamela, I just want to thank you for your valuable time and input today. I could have talked to you for two more hours. Maybe we'll do a part two. I hope our audience appreciated the discussion. I'd also like to thank you, our listeners, for tuning in today and to all of our other episodes. I'm Anne-Marie Henson, and this has been BDO's Accounting for the Future. Please let us know if you found the topic interesting and useful, and remember to subscribe if you liked it. We'll see you next time.
Narrator:
Thank you for listening to BDO Canada's Accounting for the Future. Past episodes and related insights are available at www.bdo.ca/accountingforthefuture. Or you can go to Apple Podcasts, Spotify, or Google Podcasts to subscribe. For more information on BDO Canada, visit bdo.ca.
Narrator:
Thank you for listening to BDO Canada's Accounting for the Future. Past episodes and related insights are available at www.bdo.ca/accountingforthefuture, or you can go to Apple Podcasts, Spotify, or Google Podcasts to subscribe. For more information on BDO Canada, visit bdo.ca.