Building Trust & Ethics

Ethical Leadership in an Era of Complexity and Digital Change: Event Highlights

Brian Friedrich, Laura Friedrich | May 12, 2021

This article provides a synopsis of an event held February 2, 2021. Interested readers are directed to the time-stamped event recording to watch the spark sessions and breakout discussion debriefs.

On February 2, 2021, CPA Canada, ICAS, and IFAC collaborated on a roundtable event bringing together nearly 100 influential voices from across the accountancy profession and around the world. A precirculated exploratory paper provided context and laid the groundwork for the event, emphasizing the following key themes:

 

 

Bruce Cartwright, CA, CEO of ICAS, and Charles-Antoine St-Jean, FCPA, FCA, CEO of CPA Canada, set the tone for the event with their introductory remarks. The event itself was structured around brief “spark session” presentations by notable speakers that was facilitated by Gord Beal, CPA, CA, CPA Canada’s VP of Research, Guidance and Support, and James Barbour CA, Director - Policy Leadership for ICAS. These sessions primed delegates’ breakout group discussions, the outputs of which were shared with all delegates.

Spark sessions

Ethical Leadership in an Era of Complexity and Digital Change

CPA Canada members Brian Friedrich (IESBA Board member) and Laura Friedrich (IEBSA Technical Advisor), the authors of the exploratory paper, provided highlights of the paper, with reference to the themes noted above. They outlined the key questions being explored, and challenged delegates to think about practical solutions for the profession going forward. This overview provided overall context for the remaining spark sessions and breakout discussions.

Decision making and critical thinking in a data driven world

Dr. Peter Tingling (Associate Professor, MIS, at Simon Fraser University) highlighted the differences between the complicated and the complex, and illustrated models of thinking and decision-making that are common but in some cases flawed, and explored the need for logical reasoning and critical thinking to help us manage the challenges of the digital era. He encouraged delegates to question their own assumptions and thought patterns to think differently, while avoiding overconfidence, to better manage uncertainty in complex situations.

Ethical leadership spanning the professions

John C. Havens (Executive Director, IEEE Global Initiative on Ethics of Autonomous and Intelligent Systems) spoke of the need for all professions to collaborate and design ethics into systems from the outset, rather than allowing ethical impacts to be an afterthought. He noted the difficulty that results when ethical flaws are discovered after a significant investment has been put into a system or prototype. Ethically aligned design[1] requires determining what real success looks like in advance based on the values of the end users, and setting up metrics that adequately prioritize environmental and social impacts, and not just profits. This method of design enhances innovation by drawing in a more diverse set of perspectives and disciplines.

Professional Education and Training for the Digital Age

Anne-Marie Vitale (Chair, IFAC International Panel on Accountancy Education) reminded delegates that the future is now, and that the pace of change is expected to continue or accelerate, with many traditional accounting roles expected to decline. Competence requirements, such as those in the International Education Standards, are refocusing on the skills needed to transition and bring quality to the many new and exciting roles that are emerging. Upskilling is a mandatory, continuous process as technological changes impact what PAs do, how we do it, and how we learn, and Anne-Marie highlighted the potential that Virtual Reality brings to helping aspiring and established PAs develop new enabling skills.

Mindset of the Future Professional Accountant

Alice Deakin (Executive Director, Learning at ICAS) built on the ideas shared by Anne-Marie and expanded on the future roles of PAs, the mindset that is required to thrive in those roles, and what professional accountancy organizations can do to support PAs now and in the future. Societal demands and evolving technologies offer significant opportunities, and although we can’t know what our future roles will be with certainty, we can help shape the future and build skills to serve us well in new roles as they emerge.

Our mindset needs to confidently embrace uncertainty, to continually seek learning at every turn and in every form possible. In alignment with the IESBA’s Role and Mindset pronouncement[2], moral courage[3] and maintaining an inquiring mind that is directed at both human-derived and systems-generated information will be essential to success.

Disruptive Technologies - Ethical Implications for Organizations

John Kerr (Chair, Kin and Carta plc.) framed his discussion with reference to the work of Clayton Christensen, author of The Innovator’s Dilemma. John spoke of the key dimensions of disruptive technology that impact on how we bring the fundamental ethics principles to bear in our organizations, such as speed, scale and reach, complexity and innovation, and financial impact for founders, investors and employees. He cautioned that a “move fast and break things” mentality can lead to dire unintended consequences, and suggested that PAs might serve organizations well by helping instill frameworks that help slow down decisions and ensure that the organization’s ethics is not one of the things that gets broken while moving fast. He also emphasized that moral courage and a strong organizational culture are essential to ensure that concerns are aired and positively addressed.

Breakout discussions

In breakout groups, delegates tackled questions of how the profession can thrive in light of the changing world and ensure we maintain relevance as ethical leaders and trusted advisors in order to cement the profession’s value proposition going forward. Ideas were broad and varied, but several themes emerged:

  • Societal expectations and emerging and disruptive technologies are key drivers of uncertainty, complexity, and changing organizational priorities.
  • The role of the professional accountant continues to broaden. As automation becomes more capable of technical tasks, PAs are called on more for strategic thinking, managing complex and contradictory expectations, managing uncertainty and crisis, and showing steadfast leadership and stewardship.
  • To meet new roles and challenges, the profession must ensure that aspiring and established PAs have the right technical skills, including data and systems thinking that has not been part of our traditional professional programs. Even more importantly, PAs need to be able to think critically, reason ethically, be curious and collaborate effectively in order to manage complexity and take advantage of new opportunities and demands. They also need to balance this with an appreciation of the core elements that the profession is relied on for – managing risk, measuring a wide-range of factors, and control and verification of data.
  • PAOs have a key role to play in ensuring that standards, professional education programs, and member resources support an appropriate balance of technical upskilling, developing enabling competencies, and ensuring requirements around transparency and accountability. To be effective, they must be communicated to the membership in such a way to result in true buy-in among members in all roles.
  • The profession needs to be bold and forward-looking to thrive in these rapidly-evolving times – to harness the power of the digital era without losing sight of our public interest responsibility.

IFAC CEO, Kevin Dancey, FCPA, FCA provided an excellent summation to conclude the roundtable event and emphasized the importance of the profession continuing work in this area.

Next steps

A post-event series of papers is being authored to more fully investigate the key themes presented in the exploratory work, to share the insights and recommendations of event delegates more fully, and to offer practical guidance for PAs and professional accountancy organizations as our profession evolves to address changing stakeholder needs. The papers are also informed through the ongoing work of the International Ethics Standards Board for Accountants (IESBA)’s Technology Working Group, and the diverse views of stakeholders gathered through its technology initiative’s outreach.

The series covers the following interconnected, but distinct topics, that carry-on from the roundtable’s themes:

  • Complexity and the Professional Accountant
  • Technology is a Double-edged Sword
  • Identifying and mitigating bias and mis-/disinformation
  • Mindset and Enabling Skills

These papers will be made available through IFAC, CPA Canada, and ICAS beginning with the first paper in May 2021. 

[1] Resources on the IEEE’s Ethically Aligned Design series are available at https://ethicsinaction.ieee.org.
[2] The IESBA’s Final Pronouncement: Revisions to the Code to Promote the Role and Mindset Expected of Professional Accountants is available at https://www.ethicsboard.org/publications/final-pronouncement-revisions-code-promote-role-and-mindset-expected-professional-accountants.
[3] ICAS’ Moral Courage paper, part of The Power of One business ethics initiative is available at https://www.icas.com/professional-resources/ethics/resources-and-support/moral-courage.
 

Brian Friedrich

Brian Friedrich became a member of the IESBA in 2018. He chairs the Board’s Technology Working Group and eCode Advisory Group, and is a member of the Planning Committee and the Technology Task Force."Mr. Friedrich is a principal in a research, standards, and education consultancy firm that has shaped his work experience for over 20 years. The firm focuses on building institutional capacity and developing strategic, policy, program, governance, and ethics guidance for established and emerging professional and regulatory organizations. He has co-authored numerous World Bank publications in the area of competency-based education, training, and certification in accountancy. Previous to this, he worked in education for CPA Canada (then CGA Canada) and in the Greater Vancouver auditing practice of KPMG LLP. Mr. Friedrich has served on CPA Canada's Public Trust Committee (PTC, and one of its legacy predecessors) since 2011, chairing its Exposure Draft Working Group from 2014 to 2017. The PTC is responsible for overseeing the regulatory structures and processes across Canadian jurisdictions and helps ensure Canada meets or exceeds international standards. He is also a director on the Real Estate Board of Greater Vancouver and sits on its Audit Committee. Mr. Friedrich served for 10 years on the board of the Chartered Professional Accountants of BC, which is the provincial regulatory body for CPAs in British Columbia, Canada. This tenure spanned the merger of the three accounting bodies, during which he chaired one of the bodies and served as Co-Chair of the CPA Transitional Steering Committee. He also chaired the Ethics and Discipline committees for a number of years, including as a Tribunal Chair. Mr. Friedrich holds a Master of Education (UBC), Master of Laws (York Osgoode), and a Chartered Director designation (McMaster). He became a Canadian CPA in 2001, and was awarded fellowship in 2011 and a life membership in 2014 for his service to the profession in education, ethics, and governance.

Laura Friedrich

IESBA Technical Advisor for Brian Friedrich

Laura Friedrich is a principal of Friedrich & Friedrich corp, a professional research, standards, and education consultancy firm, and has over 20 years’ experience conducting projects worldwide. The firm focuses on building institutional capacity and developing strategic, policy, program, governance, and ethics guidance for established and emerging professional and regulatory organizations. Previous to this, she worked in education for CPA Canada (then CGA Canada) and in the Greater Vancouver assurance practice of KPMG LLP. Ms. Friedrich is a contributing author on a number of World Bank publications in the area of competency-based education, training, and certification. She has also served as an author, lecturer, and examiner for numerous post-secondary programs in Canada and internationally, and has guided several institutions in developing and implementing ethics training programs. She has led hundreds of professional development sessions in a wide range of topic areas including ethics, governance, information systems, and curriculum development. Ms. Friedrich has served on the Ethics Committee of CPA BC and continues to serve on its Bylaws Committee – responsible for the ongoing review of regulatory and professional standards in the jurisdiction, including the CPA Code of Professional Conduct. Since 2012, she has served as member of the Public Guardian and Trustee of British Columbia’s Audit Advisory Committee. Ms. Friedrich holds a Master of Science in Business Administration (UBC) and is designated as a Certified Internal Auditor (Institute of Internal Auditors). She became a Canadian CPA in 2001, was awarded fellowship in 2011, and was granted life membership in 2014 for her service to the profession in education, ethics, and regulation.

 

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