Is the controller actually a business partner?
June 25, 2014
At the invitation of Belgian Controller Institute BIMAC (Belgium Institute of Management Accountants and Controllers), Michael Corbey spoke as keynote speaker on the topic Controllership in the Netherlands - the evolution of the role and responsibilities of the control function. Among other things, he discussed the question whether the Dutch controller has now actually assumed the role of a business partner, as has been suggested in literature.
The controller has traditionally been the officer in charge of reporting, which is to say that he or she is held to be a neutral and (relatively) independent outsider who updates and reports on the state of affairs and monitors the quality of the information systems and accounting organization (AO/IC). In addition to this role,the controller is now also being described as a business partner, a role in which the controller is much more of a consultant and active participant in a company's decision-making processes. It remains questionable if companies can have a single officer fulfill both roles. Whenever they can, then Sathe (1982) is correct in speaking of a strong controller. This is a controller who fulfills both assignments (score keeper, business partner) at the same time. The combination of duties is difficult, as the strong controller must be independent when reporting and involved when exercising the business partner role. Some organizations choose not to unify the two functions in one officer but opt for what is known as a split controller.
It has long been argued that the controller function should be interpreted in the sense of the business partner role. The first argument in this respect dates from 1928 (Kester 1928). The work of Nobel prize winner Herbert Simon should also not be overlooked in this regard. Corbey therefore agrees with Baldvinsdottir et al (2013), who conclude that “… being a business partner may not be as new as currently suggested".
In his lecture, Corbey discussed the results of a number of Dutch empirical studies on the work of Dutch controllers. They reveal that, in practice, the distinction between the traditional reporting function and the "modern" support function is never clearly made. For instance, De Loo et al (2011) find in their research that there are five combinations of activities that controllers often fulfill, and they are often combinations of both control and support. An earlier study by Verstegen et al. (2007) also suggest that an overlap between control and support exists.
This observation would have us believe that, in practice, there are strong controllers who can, in fact, embody both functions in one person. This is however not the case. It turns out that the two sets of tasks are never performed simultaneously. Burns and Baldvinsdottir (2005) consequently speak of a hybrid controller. Studies by De Loo and Van Veen confirm the emergence of such hybrid controllers in the Netherlands (see Van Veen 2012).
In conclusion, we can state that different types of controllers do, in fact, occur in practice, but the distinction between "control" and "support" is not clearly made. Controllers often combine elements of both roles, but this does not automatically mean that they are strong controllers. At best, they may be hybrid controllers who sometimes act as scorekeepers and other times as business partners.
Baldvinsdottir, G., J. Burns, H. Norreklit & R.W. Scapens (2013): Commentary: a business partner in the 1960s, citaat ontleend aan Van de Ven (2014, p. 85).
Burns, J. & G. Baldvinsdottir (2005): An institutional perspective of accountant’s new roles: the interplay of contradictions and practice, European Accounting Review, Vol. 14(4), pp. 752-757.
De Loo, I, B. Verstegen & D. Swagerman (2011): Understanding the role of management accountants, European Business Review (23), pp. 287-313.
Kester, R.B. (1928): The Importance of the Controller, The Accounting Review, Vol 3(3), pp. 237-251.
Sathe, V. (1982), Controller involvement in management, Prentice Hall: Englewood Cliffs NJ.
Ten Rouwelaar, H. (2007): Theoretical Review and Framework: the Roles of Controllers, NRG Working paper no. 07-02.
Van de Ven, A.C.N. (2014): Controller en business partner, Maandblad voor Accountancy en Bedrijfseconomie, Vol. 88(3), pp. 84-91.
Van-Veen-Dirks, P.M.G. (2012): Management accounting informatie, een kwestie van balans? Inaugural address, Universiteit Groningen.
Verstegen, B.H.J., I. de Loo, P. Mol, K. Slagter & H. Geerkens (2007): Classifying controllers by activities, an exploratory study, Journal of Applied Management Accounting Research, Vol 5(2), pp. 9-31.