As Mary Driscoll mentioned last month, I’ve been researching how the corporate finance function will likely evolve during the next decade. I wondered about GRC’s role in this evolutionary process and realized that I was given a glimpse of what the future may look like in the form of a “transformational” GRC executive.

Mary’s point on the bifurcation of the financial management profession struck me as I read through the proofs of Islands of Profit in a Sea of Red Ink (Portfolio Penguin, 2010) and author Jonathan Byrnes’ discussion about the need for CFOs to become “chief profitability officers.”

The evolutionary “forking” of corporate finance also struck me during the Q&A session of last month’s Business Finance/Approva GRC Webcast. I wanted to make a point about the potential strategic (career) value of GRC roles during the Webcast’s Q&A session, but did not get the chance before our hour concluded.

Here’s a snippet of what Mary said in our conversation (and in her blog entry):

What I now see is evidence of bifurcation: the analytical types in one corner and the transaction process-owners in the other. The analytical types are the darlings these days: stroked by the higher-ups for their innate brilliance as they ply analytics — models, metrics, swim lane diagrams — to uncover the granular drivers of profitability.

The transactional process-executors and owners are not so darling, of course. More and more transactional processes will be overseen by fewer and fewer finance and accounting managers within the organization.

What does this mean for GRC process owners and managers? On first blush, it seems to spell trouble.

As much as GRC bloggers promote the notion of GRC as a strategic endeavor central to corporate strategy (a notion I mostly agree with), GRC does not frequently receive this treatment in practice. I’m struck by this when vendors of GRC tools and services relay me to their most GRC-savvy clients – clients who, in most cases, tend to oversee compliance management responsibilities only and not risk management or “governance” (unless governance is defined as “IT-controls governance.”)

(I thought that the “G” in GRC was supposed to refer to “corporate governance.” The notion, and one I still believe, was that compliance management informed risk management, which in turn, informed executive-level decision-making and board-level oversight and governance.)

Now, there are exceptions – not every GRC role translates in practice to a transactional compliance manager. These exceptions give me hope for the future strategic roles awaiting finance managers who are able to manage GRC as an endeavor with strategic credibility within their organizations.

Here’s one hopeful example: Frank Di Pentima is vice president of finance transformation for Pearson North America. Before his recent promotion, Di Pentima was responsible for making the business’s internal controls (primarily those related to Sarbanes-Oxley Act requirements) as effective and efficient as possible. Di Pentima performed his duties so well that he was promoted to his current role, which requires him to apply the same “GRC” treatment to the larger realm of corporate finance.

It’s worth noting that Di Pentima wrote the thesis for his master’s of accounting degree on Sarbanes-Oxley Act compliance. His performance suggests that mastering GRC can lead to strategic career benefits. ###