From Changemaker CFO to Chief Value Officer

The CFO as changemaker
Many CFOs were recently intensely occupied in preparing their financial departments for the new sustainability reporting requirements stemming from the Corporate Sustainability Reporting Directive (CSRD). This year marks the first time companies will report on the environmental and social impact of their activities. 'Significant progress has been made', notes Rianne Jans, CFO of Deloitte, who earlier in the day participated in a roundtable discussion on this topic. 'Now that the organization is equipped to report on the impact of its activities on people and the planet, the CFO asks: what is next? The consensus is that the CFO plays a pivotal role in driving the company's sustainable transition. The CFO sets the sustainability agenda, defines sustainable goals, oversees their implementation and ensures their achievement. In other words: the CFO is the ultimate changemaker.’

AI: Fear of losing control
CFOs in general are convinced that artificial intelligence can be of great significance within their organization, as became evident during one of the roundtable sessions. However, for many companies, it remains a distant prospect. While there is curiosity and enthusiasm, CFOs, with a few exceptions, have barely integrated AI into their business strategy. Participants rated themselves an average of 4.5 in this area – a failing grade. Many CFOs also believe that AI can significantly impact the finance function and its operations. ‘There are many efficiency gains to be made. It should be possible to generate reports with just a few clicks’, said one of the participants. Additionally, AI is valuable because it can translate numbers into insights. ‘This enables the CFO to generate a clearer narrative within the organization.’
However, there is also a fear of losing control. One CFO prefers to continue using Excel ‘to maintain traceability of the numbers.’ While this is understandable, the CFO must overcome these fears. ‘Ultimately, AI will assist CFOs to navigate towards a more sustainable organization with more ease and speed’, says Mohamed Bouker, partner at Deloitte. ‘This requires experimentation. Start working with experts on one of the processes or reports. It can be frustrating at first due to its complexity – it will require perseverance.’ Additionally, considerable attention and care must be given to data governance and data management. ‘Data must not only be reliable but also compliant with privacy regulations.’

Much talk, little action
The need to get started with AI is urgent. ‘The Netherlands risks missing the boat,’ says Prince Constantijn of Orange, special envoy of Techleap, a non-profit organization aiming to fuel and accelerate the growth of startups and scale-ups. ‘We have a strong ecosystem of tech companies, but the investment climate has deteriorated in recent years. In other countries governments easily invest billions of euros in deep tech. The suspension, whether temporary or not, of the Growth Fund (‘het Groeifonds’) is a worrisome sign.’ The prince encourages pension funds to invest in tech funds managed by venture capital investors. ‘These funds are larger than ever before, and therefore more appealing to pension funds.’
The Prince of Orange criticizes our 'culture of talk.' 'We endlessly discuss AI, focusing on mitigating potential harmful effects beforehand. That is admirable, but action is key.' He argues that the Netherlands is being rapidly overtaken. 'We do not have to be the frontrunners, but if we do not adapt, we will not be able to keep up with others.' Dutch politicians should, similar to their European counterparts, attach far more importance to technology.
There are critics who call attention to the ethical side of AI, and the possible human impact and undesirable applications. Prince Constantijn: ‘Considering these issues is important, it is the government's responsibility to regulate the potential adverse effects of AI. But let us not slam on the brakes. In the rest of the world, the AI train is charging ahead.'

The boldness of ASML
Entrepreneurs must show courage and dare to invest in promising innovations. Prince Constantijn refers to ASML, the startup once discarded by Philips, which evolved into the most successful technology company in the Netherlands. The recently retired team of Peter Wennink and Martin van den Brink led the chip machine manufacturer in Veldhoven for 11 years. 'As the CTO, Van den Brink was the mastermind behind the ingenious technology. He had a keen understanding of the technology, but also understood its value for chip manufacturers. Wennink, originally an accountant, served as CFO and ensured the financial resources were available for the groundbreaking EUV technology that Van den Brink aimed to develop.' With EUV technology, short for extreme ultraviolet lithography, chip manufacturers were empowered to produce smaller yet more powerful chips on a large scale. ‘Despite skepticism from competitors, Wennink had unwavering confidence in his CTO.’ Over the past years, ASML has taken on more significant risks. ‘Those risks, alongside several key acquisitions, contributed to its success.’

The flywheel effect
The example of ASML illustrates how a CFO can elevate a company to great heights. The CFO is in a singular position to create value within the organization. This made several companies decide to change the CFO role into that of Chief Value Officer (CVO). For instance, Janneke Hermes joined Gasunie as CFO in 2019 but opted for the title of CVO the following year. According to her, this decision aligns with Gasunie’s transformation —from a gas transportation company to one that manages energy infrastructure. In addition to natural gas, Gasunie will soon be responsible for transporting hydrogen, CO2, waste heat, and green gas. ‘It no longer is only about investment and financial returns; it is also about the materials we take from Mother Earth and how we replenish them.’ Hermes believes this requires a new way of thinking and calculating; the environmental and social impact must also be quantified. How does she get the organization on board with this? ‘Everyone must understand why it is important. Young people especially became enthusiastic by how we fulfilled that ambition.’ There were also opponents, ‘who preferred to wait or thought it would not work’. That was a crucial moment according to Hermes. ‘Do we stick to what we know? Or do we dive into uncertainty and see what happens?’ Hermes says exploring new horizons is exciting. ‘But it does not always go smoothly right away. Mistakes crept into our first social annual report. That is okay too; we learn from it. Next time, we will do better.’ According to the CVO, it is about a company taking small steps. ‘That is how a flywheel effect is created.’

Activist Supervisors
According to moderator and journalist Jeroen Smit, many companies’ long-term sustainability objectives lack specificity. He suggests supervisors should take a more activist stance. In jest, he remarks: ‘They do not have to block the A12 highway, but they can certainly put pressure on directors to produce concrete plans.’ Petri Hofsté, multi-supervisory board member at, amongst others, Rabobank, Achmea, and Nyenrode University, agrees that the board should continue to be challenged. She acknowledges the danger of attention being diverted from long-term goals due to the immense workload surrounding CSRD reporting. ‘There must be a well-thought-out strategy. Every supervisory director is responsible for regularly putting strategic themes on the agenda.’ Hofsté hopes that every CFO looks beyond CSRD obligations. ‘In addition to ticking off all the boxes, we need to guide sustainability goals and motivate employees to contribute. This gives wings to the sustainability theme. Transform your organization from a checkbox-driven one to a spark-driven one. Sparking leaders inspire, foster creativity, and drive innovation that accelerates the company's sustainable ambitions.’

The end of the shareholder?
An intriguing development occurred in mid-April when the Dutch parliament approved a motion to develop the ‘steward-owned company’ as a new legal form. This structure is suitable for steward-owned companies that prioritize long-term mission over profit.  Consulting firm Berenschot already switched to this corporate structure several years ago. Marjan Trompetter, chair of the Supervisory Board at Rabobank and board member of Berenschot Beheer, explains that in a steward-owned company control and financial interests are separated. ‘Shares are not held by shareholders or a family of entrepreneurs but are transferred in a foundation. At Berenschot, the company's mission is enshrined in the statutes of the foundation and thus better secured.’
The stewardship model is on the rise. The Netherlands counts over 100 smaller steward-owned enterprises. Large international companies that have adopted this model include Carlsberg Brewery and pharmaceutical company Novo Nordisk. According to Trompetter, the model can accelerate sustainability because societal impact is better embedded within the organization. ‘Directors act as stewards, caring for the company. Since they do not own shares, they do not personally benefit from higher profits.’

From CFO to CVO
The message to CFOs is clear: take action – there is no time to waste; dare to experiment in sustainability and technology; inspire employees and, at times, take risks. Although this may sound unfamiliar to CFOs – they get appointed to maintain control over the numbers and comply with all laws and regulations – it is now necessary to deviate from the beaten path. There are plenty of opportunities to build a more sustainable, resilient, and innovative organization and to create long-term value. Soon many companies will consider whether the title of CFO is still appropriate or if it should be changed to CVO, expects Deloitte partner Mohammed Bouker. He is convinced that there will be more CVOs on the guest list next year.