Why the CFO needs to own digital inclusivity

Despite digital inclusivity being an issue that can result in high costs if it is not taken seriously or dealt with, it is an area seldom owned by the Chief Financial Officer (CFO). Sometimes it is not even on their radar.

In this article we’re going to explore why every CFO needs to be aware of the financial risks associated with digital inclusivity. We also cover why they are often the best-placed C-suite member to own this area and take appropriate action.

The CFO owns financial risk

In any organization, the CFO will be the C-suite member who ultimately owns and is accountable for financial risk. They will act to prevent and reduce risk.

Understandably the CFO will have reporting that monitors financial risk and related matters; if the numbers aren’t looking good, they will then demand action from the appropriate team. For example, if the number of debtor days is too high compared to the average for their industry sector, they will call in credit control to take appropriate action. Likewise, if there is a significant risk of compliance failure that will result in significant financial penalties, they will demand action to immediately minimize and reduce the risk, and then instruct the relevant teams to take future preventative action to stop it happening again.

But what about digital inclusivity?

Digital inclusivity is an area not traditionally of concern for CFOs. However, it’s an area where non-compliance has an impact. Organizations that do not have an accessible website are discriminating against people with disabilities. They face the potential high costs of litigation, as well as the additional reputational risk.

The Americans with Disabilities Act (ADA) and other associated legislation means that digital inclusivity is a legal requirement for every organization (opens in a new window). But there are staggering high levels of non-compliance. WebAIM reports annually on the accessibility of the top 1,000,000 home pages across the web, and in February 2022 they found 96.8% of these were not compliant (opens in a new window).

The extremely high levels of non-compliance is one of the reasons why litigation is rising. It’s an open opportunity for legal firms. According to the 2022 Year End Report (opens in a new window) containing figures compiled by UsableNet, the number of accessibility lawsuits filed each year in the US has risen by approximately 175% from 2018 to 2022.

Meanwhile the associated cost with a lawsuit is also rising. Fighting a claim can run into hundreds of thousands of dollars, even millions. The average cost just to settle a claim is estimated to be $27,750. And this is just the legal fees; there are also huge costs that are hard to quantify related to the time spent fighting the case, including the distractions and stress it causes. This can turn out to be even more costly and damaging.

Who currently owns digital inclusivity?

While web or digital teams will have operational responsibility for supporting digital inclusivity, there is very seldom board-level insight for an area that has so much associated financial risk. In fact, there is usually no responsibility or accountability beyond the digital team. This is a significant problem as web and digital teams:

• are not independent so might come with bias that underestimates the scale of a problem.
• are often the people who are relied upon to explain the issue to non-technical people where. digital inclusivity is then framed as a technical rather than a compliance issue.
• are not always focused on compliance or taking a risk-based approach.
• do not often have the authority to prioritise the action to reduce the risk.
• don’t always have the budget for tools that help.

The result is a lack of awareness about the risks associated with compliance, and a lack of action.

Why digital inclusivity is an issue for every CFO

Digital inclusivity is a significant financial risk issue where non-compliance can run in the hundreds of thousands of dollars. It can no longer simply be regarded as a technical or operational issue that is the responsibility of management. It must become a risk issue that must sit squarely within the oversight of the executive board.

Across the C-suite, the CFO is ideally placed to take responsibility because:

• this is a financial risk issue similar to other compliance-related areas that can result in expensive litigation.
• the CFO has the authority to give the issue the priority it requires as well as instruct the necessary teams to take action to reduce the risk and then prevent it happening in the future.
• they need to continue to monitor and understand the level of risk and ensure there is associated ongoing effort.

CFOs need to own digital inclusivity

Being digitally inclusive is a legal requirement. Non-compliance represents a significant financial risk which is growing and is not going away. This issue needs to be overseen at board level and given the prioritisation it requires. CFOs need to own digital inclusivity and take the appropriate action to reduce financial risk.