The controller’s work has become too specialized. Analyzing an organization’s financial records and balance sheet, although important, does not provide management with an accurate assessment of the firm’s capabilities. In an increasingly turbulent environment, in which organizations are becoming more dependent on external constituencies for resources, the role and activities of the controller need to be reconsidered.
In a recent executive development program, sixty participants described their organizations’ top three resources.1 Only five respondents mentioned balance-sheet assets, such as cash or plants and equipment. Most of the other assets they mentioned were not only off the balance sheet, they were also intangible: the quality and experience of personnel and management, corporate culture, corporate mission, distribution channels, brand equity, technology, knowledge, and so forth. In short, what the majority of these executives considered the most valuable assets were not the kinds of assets that controllers and corporate planners usually assess.
We believe that it is time for a new kind of controller: the off-balance-sheet controller.2 Such a person would analyze and control all of the organization’s off-balance-sheet resources. Typically, responsibility for such activities is scattered throughout the organization. By assigning responsibility for these activities to one person, management can assure that adequate attention is paid to these resources.
The Nature and Scope of Resources
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