From CSR to management: the emergence of the Extra-Financial Director

When CSR is no longer enough to get on board

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A recent discussion highlights a malaise shared by many companies: despite visible and well-intentioned CSR initiatives, management and teams struggle to perceive the real importance of the issues to be addressed. This discrepancy is not trivial. It reveals a deeper transformation in the role of ESG in business.

The terms “CSR”, “sustainability” or “sustainable development” have lost their luster. Not because the subjects would have disappeared, but because they were often confined to a symbolic or communicational register.

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However, the realities they cover are more relevant than ever:

• safety and social risks,
• regulatory compliance,
• image and reputation,
• business continuity,
• dialogue with stakeholders.

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These are all concrete, exposed, sometimes expensive, subjects that can no longer be treated marginally.

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The extra-financial sector is changing its status

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Gradually, extra-financial matters cease to be a simple extension of CSR or an ex-post reporting exercise.
It becomes a full-fledged pilot field.

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A field in which decisions are made that have a direct impact on:

• the costs,
• the risks,
• insurability,
• reputation,
• and, ultimately, the value of the company.

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ESG then leaves the register of discourse to enter that of governance.

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A responsibility that is still too diffuse

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In many organizations, extra-financial matters remain fragmented. It is divided between several functions: compliance, quality, risks, insurance, CSR, communication.

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This dispersion has a cost and the consequences are very real:

• fines avoided or suffered,
• costs controlled or not,
• controversies contained or amplified,
• protected or degraded image,
• facilitated or blocked dialogue with funders, insurers and partners.

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Without clear governance, without a transversal vision, extra-financial matters struggle to fully play their role.

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Extra-financial resources as a lever for robustness and the emergence of DEF

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The extra-financial sector acts directly on the robustness of the company.

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That is, its ability to:

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• anticipate risks,
• absorb shocks,
• maintain its reputation,
• secure its financing,
• and ensure its continuity and transferability.

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It is in this context that some companies are changing their organization and seeing the emergence of a new role: Extra-Financial Director (DEF).

This title reflects a desire to professionalize extra-financial management and to make the DEF the natural colleague of the DAF.

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Where the CFO drives financial performance, The DEF manages extra-financial robustness : compliance, certifications, risks, insurance, quality, quality, sensitive social issues, sustainability, exposure to controversies. These are all subjects that, poorly anticipated, are costly. These are all subjects that, when properly managed, protect and strengthen the company.

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When the essential reminds us of us

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This role is emerging because businesses no longer have the luxury of dealing with these topics after the fact in an annual report, or in a communication slide.

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They should be:

• analyzed,
• referees,
• budgeted,
• follow-ups,
• measured.

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Like any other strategic function.

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I don't have a ready made conclusion, only a conviction that is getting stronger.

As long as ESG is addressed as a communication or compliance issue, the essential will remain out of the field.
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However, this essential thing always ends up being reminded of to the company. Sometimes in a very concrete way.

It is often at this point that extra-financial matters stop being a peripheral subject and become a management subject.

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