The control tower of business

The smooth running of a company is the result of a collaboration involving every department from procurement and supply chain, research and development, to production, sales, marketing, customer support and service operation.

Connecting every step of the process is the finance team, as Duke Chen ACCA, chair of the ACCA Southern China steering team, explains.

‘As the finance team, we raise questions, flag inadequacies and advise on how to address the issues and improve overall performance,’ he says.

‘If one compares the operation of a company to that of an airport, the finance team is the control tower, closely monitoring the precise number of airplanes that are taking off and landing, their whereabouts and conditions.

‘Pilots, ground service and maintenance can focus on the specific plane they serve, but the control tower must have a broad and overall view.’

Super connector

This all-seeing-and-all-knowing capability and responsibility also underlies the attractiveness of the accounting profession, according to Chen. At pre-production phase, it connects with various suppliers through procurement; in the middle, it connects with human resources through recruitment, remuneration and capital markets through direct and indirect financing; and, later, it engages with sales activities in the form of payment and receivables.

‘Accounting is never a standalone subject, but a super connector that links all facets of the operation and observes the full business circle, from its past to its present and future,’ says Chen.

This takeaway is drawn from over 20 years’ experience in finance, investment and corporate management. An ACCA member since 2013, Chen is director of China’s NEEQ-listed digital marketing company Youmi Technology, as well as independent director of the country’s first listed architectural design firm, CAPOL International & Associates Group.

‘Through the lens of accounting and finance, one can not only learn a great deal about a company’s history and present performance, but can also predict its future,’ he says.

Finance calling

While Chen had originally dreamt of working in sales, he decided to embark on an accountancy career after reading a foreword in a textbook by Zhu Rongji, China’s then vice premier and prominent economic reformer, who called for the international-level training of 100 top accountants by 2000.

‘As China’s market economy took off in the 1990s, it was a top priority to build modern accounting standards and train talents so that they can help install generally accepted accounting principles and enhance market transparency at corporate level,’ Chen says.

By the time he graduated from Anhui University of Finance and Economics in 2000, Chen had already passed the Chinese Institute of Certified Public Accountants exams; he qualified as an accountant two years later and began his career at an accounting firm in Shenzhen.

Chen then joined mainland China’s leading software provider Kingdee in 2000, which listed on the Hong Kong stock exchange the following year. He worked his way up from chief auditor to senior vice president and executive director, and was appointed CFO at just 29.

Company first

To Chen, the CFO role is not an entitlement, but one that entails greater responsibilities. Above all, it means putting the company’s interest first and gaining the trust of colleagues.

‘A good CFO must dissociate from his or her own preference, always remain fair, impartial and independent, and promote a data-driven culture,’ he says.

Rooted in business

Throughout his career, Chen has moved seamlessly between the CFO and CEO roles as well as between very different sectors. He was Youmi Technology’s president between 2017 and 2019 before co-leading Ping An Hospital Management Group. He became director at Youmi in 2019.

The two roles, he says, require completely different ways of thinking. ‘CEOs are used to looking outward for innovation and breakthrough opportunities, while CFOs are trained to be discreet and risk-averse, following principles and focusing on internal control.’

They are intrinsically linked, though; Chen believes that the CFO should act as a reliable partner to the CEO, offering fresh perspectives and adding value in business discussions, internally pushing for organisational reform and maintaining a strong bottom line.

‘A good CFO should be deeply rooted in business, understanding how it works from end to end and helping the business grow using operational, historical and industrial data insights,’ Chen says.

‘Remaining seated in one’s own office all day long doesn’t make a good CFO. Instead, the first step is to get out and get plugged into the business.’

Chen refers to the autobiography of management guru Peter Drucker, who sees his role in business from the perspective of a bystander. The accounting and finance profession also demands an observant approach to stay close to business, while remaining cool-headed and objective.

Advancing ethics

For Chen, ethics must always sit at the heart of business and he pays tribute to ACCA’s role as an advocator for ethical practices throughout its history.

‘We all hope to build a company that can last over 100 years,’ he says. ‘However, while technology and luck can spur short-term growth, integrity is the indispensable foil in order to foster sustainable development. I admire the way ACCA upholds and promotes business ethics.’

Crises happen when companies forgo long-term growth for short-term gains in a bid to meet investors’ expectations, he adds.

‘Ethics can be boiled down to a kind of protection to those who abide by it.’

Practical foundation

Chen is quick to acknowledge the role ACCA has played in his career, thanks to its focus on developing real-world expertise.

ACCA also opens opportunities for continuous learning, where members can exchange ideas, debate freely and learn from their most outstanding peers, says Chen.

As an example of the role that ACCA has played in advancing new ways of working, Chen was alerted to the benefits of shared service centres after attending an ACCA seminar.

After he introduced the approach at Kingdee in 2008, the company went on to build an ERP software that included the FSSC (Financial Shared Service Center) module and attracted real-estate developer Vanke Group as its customer.

‘In the past, it would take us more than 10 days to compile a financial report, but after the establishment of the FSSC, we now need less than three days,’ Chen says. ‘The efficiency improvement has had a sweeping impact on how we interact with the business operation team, offering them instant feedback.’

Challenging future

Entering 2021, ACCA members in China are faced with unique opportunities and challenges, according to Chen. On the one hand, China is one of the few economies that recorded positive growth last year amid the global pandemic, providing a ‘capacious stage’ for financial professionals, he says. However, digitalisation and artificial intelligence challenges will also bring great transformation in the coming decade.

‘As digitalisation sweeps across every corner of business, each production and operation process will start to generate and move data,’ he says. ‘The realisation of “all digital” will test our ability to exploit, sort, analyse and interpret data for decision-making and to predict the future.

‘We must upgrade our skillsets and leadership through continuous learning and get ready for the digital age.’