The following is a contributed piece from Russell Guthrie, CFO of the International Federation of Accountants (IFAC). Opinions expressed are author's own.
The coronavirus pandemic has put a long-overdue spotlight on mental health. Clinical studies have found a strong correlation between pandemic-related anxiety and behaviors, such as hopelessness or substance abuse, that companies cannot afford to ignore. Implementing an organizational framework to support mental health is not only the right thing to do, it's smart for business. With the potential to alleviate human and financial costs, support for mental health should be seen as core to the finance function’s role in promoting sustainable value creation.
In 2019, the World Health Organization estimated that mental health issues cost the global economy upward of $1 trillion per year. In the wake of the past year, that cost is likely to increase considerably, reinforcing the need for mental health to be a key priority for employers and organizations worldwide.
Addressing mental health successfully, however, will require the involvement of the entire C-suite — not just HR, and not just the CEO. The finance function must be a pivotal part of the conversation both in supporting the adoption of company initiatives and in examining the cultural values of the accountancy and finance profession globally.
Long-term growth and value creation
Creating a culture of understanding must be a critical priority for CFOs. Failing to care for employees can mean falling behind as an organization, particularly in sectors where a company’s best asset is its human capital. A 2020 Gallup survey found that two-thirds of full-time workers polled were facing burnout at least some of the time, and those people were three times more likely to look for another job. It’s both more humane and more cost-effective to support your talent’s well-being rather than risk a mass exodus and face the high price of attrition — especially if you have developed a reputation for burning out your employees.
Effectively addressing mental health by establishing the appropriate infrastructure to support employees can also play a determinant role in attracting and acquiring new talent. According to a recent report by the International Federation of Accountants (IFAC) and the Association of Chartered Certified Accountants (ACCA), Generation Z — the group of 18-25-year-olds entering the workforce during the pandemic — cites mental wellbeing as a top priority when seeking employment.
CFOs must be advocates for the crucial relationship between employee mental health and a company’s bottom line. Fatigue, burnout and other signals of strained mental health stand in opposition to the creativity, collaboration and stamina required to stoke growth and resiliency within companies.
A unique threat
The finance function — and, more specifically, accountancy profession — is innately people-centered, relying on equal parts technical and non-technical capabilities. Professional accountants, in particular, are responsible for critically reviewing information and large sets of data to ensure accuracy and compliance with laws and regulations, as well as evaluating conflicts of interest — a job that demands mental acuity, attention to detail and good judgement. Unsurprisingly, when people are under mental strain, it is increasingly difficult to focus on the task at hand.
For a professional accountant this may heighten the risk of not identifying errors in financial reports or impact one’s ability to spot indicators of fraud, both of which can have far-reaching consequences. It’s not enough, however, to recognize what is at stake. Leaders have to promote a culture that will mitigate those risks.
By nature, the accountancy profession is built on the expectation of perfection. Working against a standard of excellence — with little room for error — professional accountants face numerous internal and external pressures. And particularly now, as the global economy recovers from the impacts of COVID-19, professional accountants are facing increasing stress as the institutions they support focus on rebuilding.
Such high expectations create an environment ripe for the deterioration of mental health. This, coupled with the general stigma surrounding mental health, often results in hesitation to recognize or address fatigue, depression, or any other mental health issues.
Mental health must be included among the tenets of ethical and good business performance. A robust financial system is the bedrock of any thriving economy, and the people who uphold the rigor of high-quality accounting have to be a top priority.
Building the infrastructure
Mental health must be considered part of an organization’s environmental, sustainability and governance (ESG) strategy and approached as would the provision of any other basic human right. Just as global standards are a critical vehicle for reaching sustainability goals, a similarly rigorous approach will help companies, both large and small, establish the necessary infrastructure to properly support employee well-being.
The right response will likely look different from region to region and from organization to organization, but the essential first step is simply making mental health part of the ongoing dialogue of the organization. From there, organizations must deploy initiatives for supporting employees and their ability to perform.
This will likely mean rethinking normalized processes to identify existing threats to well-being and potential barriers to care. For instance, some companies will need to reconsider the relentless focus managers place on productivity. Others will have to reevaluate insurance plans to consider coverage of mental health treatments. They should look to institute mental health literacy programs and leverage outside expert resources to empower employees to prioritize mental health and support those in their communities looking to do the same. Ultimately, leadership needs to be highly engaged in this effort. Successfully shifting corporate culture to prioritize mental well-being starts at the top.
While it’s not solely up to CFOs and the finance function to champion new and expanded norms for operating within the current reality, they are essential to creating a positive space to discuss and address employees’ mental health. It’s mission critical if we want to ensure businesses continue to operate as productively, sustainably, and ethically as possible.