The Key Role of CFOs in Promoting Employee Mental Health

The following is a contributed article by Russell Guthrie, Chief Financial Officer of the International Federation of Accountants (IFAC). The views expressed are those of the author.

The COVID-19 pandemic has brought long-neglected mental health issues the attention they deserve. Clinical research has found a strong correlation between pandemic-related anxiety or hopelessness and behaviors such as substance abusestrong correlation, which businesses cannot afford to ignore. Establishing an organizational framework that supports mental health is not only the right thing to do, but also a wise move for business operations. Given its potential to reduce human and financial costs, mental health support should be regarded as a core responsibility of the finance function in promoting sustainable value creation.

In 2019, the World Health Organization estimated that mental health problems cost the global economy more than$1 trillionannually. After the past year, this figure is likely to have risen significantly, further highlighting the need for mental health to become a priority for employers and organizations worldwide.

However, successfully addressing mental health issues requires the involvement of the entire executive team—not just the HR department, and not just the CEO. The finance function must play a key role in supporting the implementation of company initiatives and in the dialogue examining the cultural values of the global accounting and finance profession.

Long-term growth and value creation

Fostering a culture of understanding must become a key priority for CFOs. Failing to care for employees can cause organizations to fall behind, especially in industries where a company's best assets are its human capital. A 2020Gallup surveyfound that two-thirds of full-time employees surveyed experienced burnout at least sometimes, and these individuals were three times more likely to seek other employment. Supporting talent well-being is both more humane and more cost-effective than risking large-scale talent attrition and high turnover costs—especially when a company has developed a reputation for burning out its employees.

Effectively addressing mental health by establishing appropriate infrastructure can also play a decisive role in attracting and acquiring new talent. According to a recentreportjointly released by the International Federation of Accountants (IFAC) and the Association of Chartered Certified Accountants (ACCA), Generation Z—those aged 18 to 25 entering the workforce during the pandemic—rank mental health as a high priority when seeking employment.

CFOs must advocate for the critical link between employee mental health and company profitability. Fatigue, burnout, and other signs of impaired mental health run counter to the creativity, collaboration, and endurance needed to drive company growth and resilience.

A unique threat

The finance function—and more specifically, the accounting profession—is inherently people-centered, relying on a balanced combination of technical and non-technical skills. Professional accountants, in particular, are responsible for rigorously scrutinizing information and large volumes of data to ensure accuracy and compliance, and for assessing conflicts of interest—a role that demands sharp thinking, attention to detail, and sound judgment. Unsurprisingly, when people are under psychological stress, focusing on the task at hand becomes increasingly difficult.

For professional accountants, this may increase the risk of failing to identify errors in financial reporting, or affect their ability to detect signs of fraud, both of which can have far-reaching consequences. However, merely recognizing where the risks lie is not enough. Leaders must advocate for a culture that mitigates these risks.

In essence, the accounting profession is built on the expectation of perfection. Working under standards of excellence—with little room for error—professional accountants face numerous internal and external pressures. Especially now, as the global economy recovers from the impact of the COVID-19 pandemic, professional accountants are under increasing pressure as the institutions they support focus on rebuilding.

Such high expectations create an environment conducive to deteriorating mental health. Combined with the widespread stigma surrounding mental health, this often leads people to hesitate in acknowledging or addressing fatigue, depression, or other mental health issues.

Mental health must be integrated into the principles of ethics and good business performance. A robust financial system is the cornerstone of any thriving economy, and the people who uphold high-quality accounting rigor must be a top priority.

Building infrastructure

Mental health must be treated as part of an organization's environmental, social, and governance (ESG) strategy, and addressed in the same way as providing any other basic human right. Just as global standards are key tools for achieving sustainable development goals, a similarly rigorous approach will help companies of all sizes build the necessary infrastructure to properly support employee well-being.

The right approach may vary across regions and organizations, but the critical first step is simply to bring mental health into the organization's ongoing dialogue. Building on that, organizations must deploy initiatives that support employees and their ability to perform.

This may mean rethinking routine processes to identify existing well-being threats and barriers to care. For example, some companies need to reconsider managers' excessive focus on productivity. Others need to reassess insurance plans to consider covering mental health treatment. They should work to establish mental health literacy programs and leverage external expert resources to enable employees to prioritize mental health and support others in the community seeking to do the same. Ultimately, leadership needs to be highly engaged in this effort. Successfully transforming corporate culture to prioritize mental health starts at the top.

Although advocating for new expanded norms of operating in today's reality is not solely the responsibility of CFOs and the finance function, they are crucial to creating positive spaces to discuss and address employee mental health issues. This is a vital mission if we want to ensure businesses operate as efficiently, sustainably, and ethically as possible.