As we begin the 2020s, the ethical challenges we might face at work are changing. External forces and changes in the way we do business are changing the skills required from management accountants. We look at three top ethical challenges that will prompt questions of management accountants in the next decade.
Artificial intelligence is a hot topic right now. Nearly 60% of company directors think that technological advances pose the greatest risk to their business according to the 2019 Directors’ Liability report that Allen & Overy and Willis Towers Watson produced.
News outlets have quickly reported what happens when companies get it wrong. For instance, there was a recent scandal where a credit card was labelled ‘sexist’, and a report on an experiment showing that a simple mask could fool advanced facial recognition systems. Consumers, employees and other stakeholders are concerned about their personal privacy and the impact of advances in technology on their lives.
Even if you don’t work directly on building the algorithms that drive AI within your business, senior managers still are responsible for ensuring the technology is built and deployed in an ethical way. Increasing your digital technologies knowledge is a good place to start, so you can ask the right questions.
Our thought leadership from 2019 on ‘Making good decisions: building trust in a digital age’ updates you on the issues and actions you can take.
Reporting beyond the financials
Integrated Reporting (<IR>) is not a new concept. But it is set to continue to grow in the 2020s.
The idea is simple; organisations report on not just financial capital but on a range of factors that could affect the value of a business. This could include factors such as reliance on natural resources or value held in intellectual capital.
Climate disclosures have led to much discussion and action, with companies quantifying and reporting on the risks climate change poses to their business. This is not only useful data for investors and other stakeholders but may become a key way for governments to measure the success of national environmental policies and targets.
Will it become mandatory for companies to report on climate risk during the 2020s? The consensus of experts is that it’s possible.
Mark Carney, Governor of the Bank of England, said in June 2019 that “in the future, to achieve a carbon-neutral economy, disclosure must clearly become mandatory.” The challenge remains in ensuring disclosures have the right information and level of detail to be truly useful.
Whether it becomes mandatory, management accountants have the skill set to lead the move to report beyond the financials.
The purpose of business
Does business exist purely to make a profit and maximise shareholder value? Or does it have a wider purpose? This debate about the purpose of business has been going on for centuries and will no doubt continue in the 2020s.
In August 2019, the Business Roundtable issued a statement that 181 CEOs of top U.S. companies, including Apple and Walmart, signed. The letter included the statement, “Each of our stakeholders is essential. We commit to deliver value to all of them, for the future success of our companies, our communities and our country.”
This is a big deal. It’s top CEOs acknowledging that business is not an exclusive exercise in delivering profit to shareholders. Instead, in many instances, there also is a responsibility to other stakeholders, including employees, customers, suppliers and the wider society.
There are various ways companies can demonstrate a wider purpose. The U.N.’s Sustainable Development Goals run until 2030, and more companies will commit to help deliver these as part of their commitment in the next decade to create value for wider stakeholders.
Our brand new responsible business section of the website includes information on the Sustainable Development Goals and the U.N. Global Compact.
Ethics at CIMA
CIMA just launched its new Code of Ethics, ensuring it remains relevant to the challenges our members and students might face in their professional lives. Read a summary of the Code’s changes here.
We are here to help you through any ethical challenges you might face. Our recently updated ethics resources section of the website is full of information on topics ranging from speaking up to technology. We also run an ethics helpline and inbox, where we can guide you through the Code of Ethics.