CFO Magazine South Africa 2018 - 3rd issue by CFO South Africa

MAGAZINE FOR FINANCE PROFESSIONALS IN SOUTH AFRICA 3 • 2018 CFO.CO.ZA

Krish Kumar CFO eThekwini Municipality Legacy alert

Sean Capazorio CFO Aspen Pharmacare From cold facts to good stories

Bernardt van der Linde CFO Curro Holdings Time for school

Talent and transformation Former and new Servest CFOs share their stories Team management Tips from SA’s best CFOs The weight of the wait Survival strategies for when your appointment is late

SURPRISING CAREERS

They studied to become CAs, but then went their own way

CFO of the Year 2018

Christine Ramon

Empowering women leaders

/ YOUR GLOBAL WALLET

TABLE OF CONTENTS

M A G A ZI N E F O R F I N A N C E P R O F E S S IO N A L S I N S O U TH A F R I C A 3 • 2018 CFO.CO.ZA

page 36

Krish Kumar CFO eThekwini Municipality Legacy alert

page 42

Sean Capazorio CFO Aspen Pharmacare From cold facts to good stories

page 56

Bernardt van der Linde CFO Curro Holdings Time for school

page 22

Talent and transformation Former and new Servest CFOs share their stories

page 28

Team management Tips from SA’s best CFOs

page 48

The weight of the wait Survival strategies for when your appointment is late

page 68

SURPRISING CAREERS

They studied to become CAs, but then went their own way

page 70

CFO of the Year 2018

Christine Ramon

Empowering women leaders

CFO South Africa is the organisation for finance executives in South Africa. Our goal is to connect finance professionals online and off in order to share knowledge, exchange interests and open up business opportunities. CFO Enterprises (Pty) Ltd 1 Wedgewood Link, Bryanston, Johannesburg, 2191, South Africa. | +27 (0)11 083 7515 | CFO.co.za © 2018 CFO Enterprises (Pty) Ltd. All rights reserved. No part of this publication may be reproduced, distributed or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law. MANAGING DIRECTOR

SENIOR EDITORS

OTHER CONTRIBUTORS

Graham Fehrsen gfehrsen@cfo.co.za +27 (0)79 898 0227

Toni Muir tmuir@cfo.co.za +27 (0)82 908 8687

Caylynne Fourie, Ebrahim Moolla, Judith Kamffer, Lullu Krugel, Maura Feddersen, Nina Kirsten and Sarah Chalmers.

EDITOR IN CHIEF

Kate Ferreira kferreira@cfo.co.za +27 (0)82 8686083

PRINTING

Joël Roerig jroerig@cfo.co.za +27 (0)76 371 2856

DESIGN

MANAGING EDITOR

Elizabeth Ferraris

Georgina Guedes gguedes@cfo.co.za +27 (0)83 651 2789

PHOTOGRAPHY

CFO MAGAZINE • CFO.CO.ZA

Patrick Furter, Ter Hollmann

Novus Holdings coenraad.pretorius@novus.holdings +27 (0)11 201 3460

Community 6

From the managing editor

Africa’s biggest finance conference

CFOs on the move

Finance headlines

CFO Awards 18

2018 CFO Awards – a night to remember

Growth 52

Elvin de Kock, into a new (cyber)space

Get smart 60

Nando’s founder has a new focus

CFO Dinner: Leaders share energy insights

Accounting 78

Deloitte’s finance transformation expert Carryn Tennent

From the MD 82

Collaborate and adapt

52 CFO MAGAZINE • CFO.CO.ZA

FROM THE MANAGING EDITOR

The thing about finance professionals

took up the position of managing editor of CFO South Africa just as the CFO Awards were about to take place. In the days leading up to the event, there was a thrum of tension in the office, and it was a fantastic experience to see all the ideas made manifest on the night – and none of the concerns coming to light. It certainly was a baptism of fire into the South African CFO community because everyone who was anyone was there. I shook more hands than a president at a rally, and was introduced to more people than I can possibly remember. Fortunately, there’s photographic evidence to jog my memory, and if you’d like to get a sense of the glitz and glamour of the “Oscars for finance professionals”, you can check out our snapshots of the evening on page 18. Those weren’t all the people I’ve met recently. Oh no. I’ve also had the opportunity to interview (or read other journalist’s interviews with) a number of other finance leaders and finance professionals since I came on board. One thing that I’ve noted is that they are all horrified by the continuing scandals plaguing the South African finance

profession – and are especially concerned at how it reflects on them, their colleagues and their country. AngloGold Ashanti’s Christine Ramon, as she received her CFO of the Year Award, made a strong statement that now is the time for ethical leadership. You can read more about what made her such a strong candidate for this award (and three others) on page 22. In fact, “doing the right thing” was the theme of this year’s awards, and another person who has walked the talk in this regard is Peter Walsh, winner of the 2018 Transformation Award. He was recognised for the work he did in his time at Servest, although he has subsequently left the company, and he delivered an impassioned plea for South African business leaders to put themselves firmly in the shoes of others. You can find out more about his journey on page 28. Robbie Brozin, Nando’s founder, has taken another approach to doing the right thing and has immersed himself in his business’s fight against malaria in Africa. This is after he spent years building the beloved South African brand as a great place to work, by putting his people ahead of poultry. Read more about Robbie’s journey on page 60 (there are some fun chicken puns for you). Then, while becoming a CFO might be the ultimate end point for many CAs, there are those accountants who, with their shiny new qualifications in hand, take different paths entirely. We had a lot of fun interviewing four CAs who quit (or at least cut back on) the world of finance, to follow a different calling. You can meet our CAs who went their own way on page 70. While they may feel that they’ve taken a different path than the one for which they studied, I would argue that the commitment and determination with which they approach their chosen careers is strongly tied up in their academic backgrounds. There’s a whole lot more for you to read in this issue, and the wheels are already in motion for the next publishing cycle, so keep an eye out for our Q4 edition, coming at the end of September. If you have a story to tell or an idea to share, please feel free to drop me a line. Georgina Guedes gguedes@cfo.co.za +27 83 651 2789

CFO MAGAZINE • CFO.CO.ZA

The biggest finance conference in Africa Finance Indaba Africa is the biggest finance conference on the continent. Over 5,000 visitors tap into a wealth of resources, know-how and inspiration. Cut costs dramatically, send sales & productivity through the roof and boost your companyâ&#x20AC;&#x2122;s profits. Do the right thing! Platinum Partners >>

Gold Partners >>

Silver Partners >>

Do you want to exhibit at Finance Indaba Africa 2018? Contact Graham Fehrsen (gfehrsen@cfo.co.za | +27 79 898 0227) or visit www.finance-indaba.co.za

FINANCE INDABA AFRICA

Nonkululeko Gobodo, South Africa’s first black female CA

9 REASONS TO REGISTER TODAY 1. Meet thousands of your peers from different industries 2. Learn about the latest in analytics and automation 3. Hear about the personal experiences of leading South African CFOs 4. Engage with thought leaders and FinTech entrepreneurs 5. Hear from female leaders shattering the glass ceiling 6. Tips on exercising corporate governance and due diligence 7. Personal lessons from international finance leaders 8. Advice on balancing work and life 9. Hear from your public sector servants on how they are building a better future

Rui Morais, CFO Dis-Chem Pharmacies and Young CFO of the Year 2018

Finance Indaba Africa 2018 – smashing all records

Africa’s biggest finance conference An incredible lineup of speakers and a wealth of trendsetting exhibitors make the Finance Indaba Africa 2018 a conference and expo that finance professionals cannot afford to miss. The biggest finance conference in Africa is already smashing all records in terms of numbers of attendees, exhibitors, speakers and business opportunities.

O 8

n 3 and 4 October 2018, more than 5,000 finance professionals will gather at the Sandton Convention Centre to

CFO MAGAZINE • CFO.CO.ZA

learn, share knowledge and network. Highly anticipated speakers include the indomitable Vusi Thembekwayo, entrepreneurial boy-wonder Marnus Broodryk, the

inspirational Nonkululeko Gobodo, and CFOs from companies like RMB, IBM, Eqstra, AECOM, Laureate, Hatch, and the Department of Mineral Resources.

5 THINGS YOU NEED TO KNOW 1. 3 & 4 October 2018 at the Sandton Convention Centre 2. Free of charge for finance professionals 3. Twitter hashtag #findaba18 4. Finance-indaba.co.za to exhibit or register 5. Email Sarah Chalmers at schalmers@cfo.co.za for team registrations

Vusi Thembekwayo, larger-than-life investor and public speaker

Both this year’s Young CFO of the Year, Dis-Chem Pharmacies Rui Morais, and this year’s Public Sector CFO of the Year, eThekwini’s Krish Kumar, will have a special role in the programme, with Vodacom finance boss Till Streichert – CFO of the Year 2017 – also featuring on the roster.

recruitment firm Cassel&Co. “In my experience, the quality of speakers is outstanding – they’re all thinkers who would be quite difficult to access normally.”

Unparalleled opportunity

“Finance Indaba understands that finance is more than just numbers,” commented attendee Cheryl Howell, finance manager at the CSIR, after last year’s event. “It's about connecting people, ideas and information to add value and improve the numbers.” Unathi Mlisa, management accountant MTN Group, also lauded the value of the two days, saying: “The entertainment was out of this world, the presenters were of very high calibre and the energy from everyone electric. Can't wait for 2018!”

“Finance Indaba Africa is the only conference of this size dedicated to finance professionals, that offers an unparalleled opportunity to engage with colleagues, suppliers and peers,” says Georgina Barrick, MD of

CFOs and other top executives have quickly realised that giving their team time off for two days is the best (free) investment they can make in the success of their businesses. “It is fascinating to have an

Standard Bank is one of this year’s diamond sponsors and up to 90 service providers and institutions are expected to exhibit and partner with the CPD seminars. With 100 learning sessions and free entry for members of professional bodies, the event provides finance people with a unique opportunity for personal and business development.

Brett Tromp and Jo-Ann Pohl, CFOs of Discovery Health and Bowmans

event of this size and magnitude with content of exceptional quality. The Finance Indaba is something that is needed for our profession in this country,” said JSE Limited CFO Aarti Takoordeen after last year’s event, with SAICA’s Kelly Masete, Project Director: Members in Business, echoing her assessment: “The Finance Indaba is a brilliant platform for people to network, interact and share knowledge and information.” Finance Indaba Africa is the only annual event on the continent where thousands of registered accountants and other finance professionals gather under roof for two days to advance their knowledge, networks and careers during learning sessions, presentations and networking. CAs and members of other professional bodies also qualify for up to 12 CPD hours, but that is small change compared to the massive boost the event gives to the work finance teams produce. l

CFO MAGAZINE • CFO.CO.ZA

PEOPLE MOVES

CFO promotions, appointments, resignations and retirements

APPOINTMENTS GALORE Servest has a new CFO, while Taste Holdings and ArcelorMittal saw resignations, and Cell C’s CFO retired. Boitumelo Mosako took the reins from Kareshni Naidoo as CFO of the Development Bank of South Africa in April. Boitumelo, who is a CA, will be in charge of finance in the DBSA’s new operating model, which includes three front-line divisions: Coverage, Transacting and Project Preparation. She was previously the CFO of the South African Bureau of Standards.

Thabo Phokane

habo Phokane took over from Peter Walsh as the CFO of Servest. Thabo is a qualified CA (SA) with over 15 years of commercial experience, and was previously the finance director of Servest’s Security and Parking divisions. Thabo cites his own appointment as a demonstration of Servest’s commitment to growing its people and wants to continue to drive this culture of employee recognition through relevant training and upskilling, not only for the back-office team, but the entire workforce of 25,000. “This will enable our employees to replicate that culture to clients, thereby improving our client centricity model,” he says.

CFO MAGAZINE • CFO.CO.ZA

Christiaan Engelbrecht took up the role of FD of Rectron in April. He is an experienced CFO with a history of working in the entertainment industry. He was previously the CFO of Ster-Kinekor, where he worked since 2016, and before that he held positions at Vodacom, Deloitte UK and Deloitte.

Tyrone Soondarjee

He says: “A change is as good as a holiday until you reach the destination. Whenever you start a new job, it’s exciting to be in a new industry and a new environment, but when you get there, it’s a lot of hard work getting up to speed so you can hit the ground running – especially in a listed company.” Dineo Molefe has been promoted from the CFO role at T-Systems’ South African operations to MD, effective 30 April. Dineo, who has been CFO for two years, takes the reins from Gert Schoonbee, who has been MD for the last six years, and with the firm for 18 years.

Christiaan Engelbrecht

“I look forward to working with my colleagues at T-Systems, as

Peter Walsh takes the role of Global CFO at ITL How do you look back on your time at Servest? I have had an amazing six years at Servest and am leaving on exceptionally good terms from both sides. Tell us about your new role? I am the global CFO of ITL, a leader in the provision of labels and tags to the apparel industry. My new role is partly London based but also requires spending a fair amount of time in Cape Town. How do your new employers view your Transformation win at the CFO Awards? In as much as Servest won this award, my new stakeholders did too. They know what it means. And they knew what they were getting when they hired me. South Africa is in my blood. It will always be home for me. I’m not a person who’s leaving South Africa so much as I’m a person who’s following a great opportunity which includes South Africa.

“A change is as good as a holiday until you reach the destination. Whenever you start a new job, it’s exciting to be in a new industry and a new environment, but when you get there, it’s a lot of hard work getting up to speed so you can hit the ground running – especially in a listed company.” – Christiaan Engelbrecht well as with our clients, suppliers and partners, as we continue shaping a new T-Systems in SA. I want us to become the leading provider

of secure, cloud-based service in a world of increasingly inter-connected networks and devices. We are already well advanced in these plans to create a company that will nimbly adapt to new trends and meet rapidly changing client needs,” says Dineo. As part of the transition, Dineo will also lead the Future Fit programme, which is focused on shaping T-Systems SA for the future. Evan Tsatsarolakis, CFO of Taste Holdings, resigned after nine years at the company, with effect from 31 May this year. He joined the company in April 2009 as the financial director, and was appointed as CFO shortly afterwards. COO Dylan Pienaar is acting as CFO until a suitable candidate is appointed to the role. Tyrone Soondarjee retired from the role of CFO of Cell C at the end of May, less than a year after joining the group, citing “personal circumstances”. He has joined his family business on a full-time basis. He joined Cell C in July 2017 after his retirement from the Sasfin

Group where he had served as financial director for ten years. Mohammed Mahomedy was appointed as the Interim Group CFO of Transnet in May, taking over from Mark Gregg-Macdonald, who was holding the fort after Garry Pita’s resignation. Mohammed is a Chartered Accountant with 12 years of service at Transnet, where has led key strategic portfolios within finance. He will also join the board of directors. “His appointment validates the major strides

Paul Marten

CFO MAGAZINE • CFO.CO.ZA

PEOPLE MOVES

“I was seriously blessed with this chance.” – Paul Marten in stabilising the leadership of Transnet and the robustness of the company’s succession planning,” says Siyabonga Gama, Transnet’s Group Chief Executive. Paul Marten, previously Microsoft South Africa FP&A Director, has taken up the same role in Canada. Of his time working in South Africa he says, “I was seriously blessed with this chance and would thoroughly recommend such an experience for many people. To move to a new country, immerse yourself into the local culture and to build strong working relationships with people that you get to interact with on a daily basis – Thank you Microsoft South Africa.”

He says he is looking forward to the opportunity to grow professionally and personally in Canada – although he’ll have to figure out what ice hockey is all about. Dean Subramanian resigned as CFO of ArcelorMittal to pursue an opportunity outside of the company. Dean had succeeded in mending the company’s relationship with government and had started resolving the company’s cash flow problem in moving debt from short to long term, which also helped to ensure financial sustainability. His resignation adds to the woes of ArcelorMittal, which has been struggling against low steel demand, rising input costs and competition from cheap steel imports. After ten years at the company, during which he served in various positions and was involved in vari-

ous acquisitions, Bruce Atkinson has resigned from Esor. He has moved to Hartmann Vitamed as CFO. Martin Prinsloo tendered his resignation after nine years as CFO of Royal Bafokeng Platinum. His resignation takes effect in August.l

Dean Subramanian

Denel's former CFO Fikile Mhlontlo joins Concor What is your main focus as Acting CFO of Concor? I have been in Concor Construction for about six months and my role has transitioned to that of Acting Group CFO. I am now involved in supporting strategy, supporting business development initiatives, monitoring financial performance, financial reporting, business financing, maintaining relationships with certain stakeholders including banks and other funding institutions. It is interesting that construction was always my first love, with all its complexities and eccentricities. I have been involved in complex long-term projects in one way or the other in all my career life. How was your sabbatical before joining Concor? It was never a true break but it was fun, I spent over a year doing a bit of consulting, accounting work and spending a fair amount of time with family and taking things a bit easy. I love golf, I did play a lot of golf and kept fairly fit. I am refreshed and certainly I do my job with vigour. What’s it like being back in full-time employment? It was a bit challenging to come back as a full-time employee after a bit of a break, be in the office from 8:00 to 5:00, but I am back in the full swing of things. I had a preference for a private sector and indeed I am in the private sector. Let’s let the hard work begin…

CFO MAGAZINE • CFO.CO.ZA

embrace erp ﬁnancial software you can count on

Embrace accurate data-driven decision-making that drives enterprise-wide growth and innovation! Embrace empowers CFOs by providing end-to-end, real time, flexible financial software solutions that combine complete control, valuable insights and reliable information from across the business. Accurate, timely financial snapshots clarify competitive positioning for today and enables actionable planning for tomorrow.

beyond solutions

NEWS

A roundup of the biggest finance news stories of the quarter

FINANCE HEADLINES Naresh Tulsie appointed new Fais Ombud The Financial Services Conduct Authority (FSCA), formerly the Financial Services Board (FSB), appointed Naresh Tulsie as the new Ombud for Financial Advisory and Intermediary Services (Fais). The FSCA said: “As the Fais Ombud, Mr Tulsie will be responsible for promoting consumer protection and fostering the integrity of the financial services industry by resolving complaints in a manner that is impartial, expeditious, economical, accessible and, at all times, equitable.” Tulsie, the former Assistant Ombudsman for short-term insurance, replaces outgoing Ombud Noluntu Bam, who has been in the role since 2010. Tulsie’s appointment was effective 1 May 2018.

Remgro buys stake in Vumatel Community Investment Ventures Holdings (CIVH), a unit of Remgro, which is owned by South Africa's richest man, Johann Rupert, has bought part of fibre provider Vumatel. According to a statement, CIVH took a 35 percent stake in Vumatel, with the understanding that it will take full ownership at a later date. CIVH currently owns Dark Fibre Africa (DFA), which has a network of 10,000km of fibre. In terms of network size, DFA trails Econet Wireless Global unit Liquid Telecom. According to CIVH director Peter Uys, the ultimateintention is to combine the two businesses.

CFO MAGAZINE • CFO.CO.ZA

Libstar lists on the JSE In May, consumer food maker Libstar debuted on the Johannesburg Stock Exchange (JSE), in the Food Products section of the main board, and was the market’s biggest listing for 2018. Libstar raised R3 billion via the listing – half from its primary raise and the balance from a secondary selldown from existing shareholders. Andries van Rensburg, Libstar CEO and co-founder, said the decision to embark on a JSE listing is an exciting step in the company’s development and growth story. He also noted that the new capital raised would allow the company to invest more into the business and so grow its range of products and expand its operations. He said at the listing: "This is an historic day for Libstar. The business was established back in 2005 and we have grown it into an R8.8 billion turnover company with a compound annual growth rate of 23 percent over the last three years. We are proud to be mak-

ing our debut on the JSE and giving our new shareholders the opportunity to have a stake in the future growth of the business. The R1.5 billion new capital we have raised will allow us to invest more into the business and therefore grow our range of products and expand our operations."

Mcebisi Jonas appointed to MTN board MTN Group announced in May that Mcebisi Jonas, South Africa’s former deputy finance minister, and Bajabulile Swazi Tshabalala, a South African businesswoman, have joined its board as independent non-executive directors. Jonas served as deputy finance minister for nearly three years before former president Jacob Zuma fired him in what became known as the midnight cabinet reshuffle. Jonas is currently one of four independent Presidential Investment Envoys appointed by president Cyril Ramaphosa to attract investors to South Africa

Nishlan Samujh, Investec CFO.

Embracing change. Shaping futures.

The ACCA Qualification – the future We’ve been building on our reputation of innovation and have developed a ground‑breaking design for our Professional‑level qualification. The result? The ACCA Qualification – the future.

To learn more about the changes, benefits and updates to the qualification please visit:

accaglobal.com/thefuture

Our new revolutionary Strategic Professional level, combined with the innovations we’ve implemented over the past two years to the ACCA Qualification, ensures ACCA will continue to develop the strategic, forward‑thinking professional accountants the world needs.

NEWS and is the former chairperson and non-executive director of the Public Investment Corporation (PIC). Tshabalala has over 20 years of professional experience in finance, risk management, treasury and general management, having worked in a wide range of institutions, state-owned companies and the private sector. Her experience also spans various sectors, including transportation and logistics, infrastructure and financial services. She is currently a non-executive director of Tiger Brands and South African Airways (SAA).

Investec announces R220 million loss due to Steinhoff Investec, when releasing its financial results for the year ended 31 March, said that it had lost R220 million as a result of credit exposure to Steinhoff. The bank further said that the credit exposures, through Steinhoff Africa Retail (STAR), "represent a small portion [of] the group’s balance sheet".

In December 2017, Investec said that its loans to Steinhoff represented less than 0.25 percent of its total R464.8 billion credit exposure as at 30 September. Investec further said that trading income arising from customer flow decreased by 26.7 percent, to R365 million, as a result of losses incurred on Steinhoff.

Ramasela Ganda, Public Sector CFO of the Year 2017, joins Transnet board Pravin Gordhan, Minister of Public Enterprises, in May appointed a new interim board at state-owned Transnet. Popo Molefe, the former board chairman of the Passenger Rail Agency of SA (PRASA), will lead the board, which also comprises newly elected members Louis Zeuner, Ursula Fikelepi, Dimakatso Matshoga, Edward Kieswetter and Ramasela Ganda. Kieswetter is a former member of the CFO Awards panel of judges, while Ganda was elected as 2017 Public Sector CFO

of the Year. She left the public sector at the end of last year to take up a position as CFO: Rental and Corporate Service at Barloworld. When announcing the new appointments, Gordhan said: “Transnet is facing serious allegations of maladministration and corruption. The previous board has not demonstrated appreciation of the seriousness of issues at hand or the ability to deal with these decisively in order to protect the entity in the interest of South Africans.” In April this year, Garry Pita, Transnet group CFO, resigned with immediate effect, citing health issues, and in early May, Linda Mabaso, Transnet chairwoman, tendered her resignation, along with nonexecutive directors Vusi Nkonyane and Yasmin Forbes. When making the new board appointments, Gordhan also chose to remove the remaining nonexecutive directors Seth Radebe, Potso Mathekga and Zainul Nagdee with immediate effect. l

KPMG SA announces a reshaping of the business KPMG South Africa announced in June that it is embarking on a reshaping exercise, following a strategic review of its activities and also taking into account client losses and current levels of demand for certain services. The firm said it anticipates up to 400 people leaving as a result of its plan to close certain regional offices, operate a refocused advisory business, and scale back its internal business support to reflect the reduced footprint. Going forward, the business will operate out of four hubs: Johannesburg, Cape Town, Durban, and Port Elizabeth. Nhlamulo Dlomu, CEO of KPMG South Africa, said: “These hard decisions were necessary to put the firm on a more sustainable footing, while ensuring we continue to offer our clients the best service and support. We are putting quality and integrity at the heart of the business and, from now on, the firm will be focused on doing fewer things better. I am confident that we have taken the right steps to reform and reshape the business. Now we need time for these to take hold. It is a matter of great regret that, as a result, we will be parting company with loyal colleagues. We are taking all possible steps to ensure these changes are managed in a caring manner and that everyone is treated with dignity.”

Professor Wiseman Nkuhlu

Professor Wiseman Nkuhlu, chairman of KPMG South Africa and CFO South Africa Awards judge, said: “Since becoming Chairman, my priorities have been to rebuild relationships with society and to reassure clients of our professional rigour and integrity. Today’s announcement, difficult but necessary, is part of our mission to restore KPMG’s reputation and honour its legacy of 130 years’ service in South Africa; to make it a firm that our people, our clients and the public can again be proud of. The steps we have taken will enable us to best service the needs of clients, make a broader contribution to society, while establishing the platform that will allow us to again earn the right to grow in South Africa.”

CFO MAGAZINE • CFO.CO.ZA

CFO AWARDS

Omnia CFO Wayne Koonin was nominated for a record third time and won the Finance & Technology Award in 2017

Snapshots of the finance industry’s premier awards ceremony

Finance leaders stand tall at the 2018 CFO Awards At a glittering ceremony at Constitution Hill, the home of South Africa’s highest courts, CFOs and business leaders gathered to hear the greatly anticipated announcement of the winners of 2018’s CFO Awards. The event, known as “the Oscars for finance executives", pays homage to those professionals who lead the way, break the mould and transform their industries.

n 10 May, 24 years after Nelson Mandela was inaugurated as the first democratic president of the Republic of South Africa, Graham Fehrsen, MD of CFO South Africa, commenced the awards ceremony with a warm welcome to all guests, partners, judges and nominees. “To those who have opened themselves up to scrutiny, we know it’s not an easy task to go before a judging panel and put forward your story. We want to acknowledge your courage in being judged, and putting your personal and professional credentials in the spotlight,” he said. The historic venue lent an air of significance to the proceedings, as the winning CFOs took to the stage 18

CFO MAGAZINE • CFO.CO.ZA

to call for their colleagues and associates to commit to principled actions and honourable intentions. Christine Ramon, AngloGold Ashanti’s CFO, who walked away with four out of the ten awards – including the CFO of the Year Award – said: “This is the time for ethical leadership, it’s the time for CFOs and the profession to stand tall.” Rui Morais, CFO of Dis-Chem Pharmacies, who took home three awards – including the Young CFO of the Year Award – followed her with an equally strong statement. “It’s our responsibility as leadership to make sure we’re acting ethically and that we understand the consequences of the decisions we make.”

The guests gathered in a dazzling marquee and enjoyed an evening filled with laughter as comedian Nik Rabinowitz entertained with side-splitting humour and the occasional biting insight. Delectable food was served, wine flowed and professionals networked to their hearts’ content. Graham ended the night with a short extract from Nelson Mandela’s inauguration speech of 24 years ago: “Our daily deeds as ordinary South African must produce an actual South African reality that will reinforce humanity’s belief in justice, strengthen its confidence in the nobility of the human soul, and sustain all our hopes for a glorious life for all.”

CFO AWARDS 2018

WINNERS

CFO OF THE YEAR Christine Ramon, AngloGold Ashanti YOUNG CFO OF THE YEAR Rui Morais, Dis-Chem Pharmacies PUBLIC SECTOR CFO OF THE YEAR Krish Kumar, eThekwini Metropolitan Municipality STRATEGY EXECUTION AWARD Rui Morais, Dis-Chem Pharmacies TRANSFORMATION & EMPOWERMENT AWARD Peter Walsh, Servest HIGH PERFORMANCE TEAM AWARD Christine Ramon, AngloGold Ashanti COMPLIANCE & GOVERNANCE AWARD Christine Ramon, AngloGold Ashanti FINANCE TRANSFORMATION AWARD Sean Capazorio, Aspen Pharmacare MOVING INTO AFRICA AWARD Christine Ramon, AngloGold Ashanti Workday's country lead Zuko Mdwaba with Dis-Chem Pharmacies CFO Rui Morais, Young CFO of the Year

FINANCE & TECHNOLOGY AWARD Rui Morais, Dis-Chem Pharmacies

Workday’s Michelle Koppenol and Zuko Mdwaba CFO MAGAZINE • CFO.CO.ZA

CFO AWARDS

CFO Awards nominee Melt Hamman (Attacq) with his colleague Raj Nana

Panel discussion with CFO South Africa MD Graham Fehrsen, Judge Dennis Davis, Thomson Reuters Africa MD Sneha Shah, ZAR X CEO Etienne Nel and Vusi Thembekwayo

CFO Awards nominee Silindile Kubheka (National Treasury) with 2015 nominee Rofhiwa Irene Singo (Department of Mineral Resources)

AfriSam’s Richard Tomes with two CFO Awards nominees: his colleague Leon Serfontein and Vedanta Zinc International’s Pushpender Singla

The evening’s big winner, AngloGold Ashanti’s Christine Ramon

Sponsors Services firm Deloitte was the principal sponsor of the 2018 CFO Awards, while other awards sponsors included: Standard Bank, Oracle, Thomson Reuters, PwC, Workday, RMB, and Michael Page. Additional tables were sponsored by A2X, CHRO South Africa, Drayton Glendower, KPMG, Omnia, OUTsurance, Nike, PPC, Transparent and TransUnion. Deloitte's Rachel Nkgodi with finance executives Loveness Khunou (Dow Chemicals SA), Emilia Teixeira (Mercantile 20

CFO MAGAZINE • CFO.CO.ZA

Bank) and Vanessa Naidu (City & Guilds)

To join the 2019 CFO Awards as a sponsor, contact Graham Fehrsen at gfehrsen@cfo.co.za

Christine with her right-hand woman Meroonisha Kerber, who will start her new job as Impala Platinum CFO in August.

AngloGold Ashanti’s Christine Ramon discusses work, ethical leadership and family, in the wake of her four CFO Awards.

Empowering women leaders Christine Ramon scooped a record-breaking four awards at the CFO of the Year Awards in 2018. She is a forceful personality, who applies as much energy to doing the right thing and empowering the women who work with her, as she has done to steering AngloGold Ashanti’s finances through a storm of tough conditions. By Georgina Guedes 22

CFO MAGAZINE • CFO.CO.ZA

CFO AWARDS

hristine was brought into AngloGold Ashanti after serving as CFO of Sasol to bring a fresh perspective into the business by CEO Srinivasan Venkatakrishnan, known as Venkat, and given the task of deleveraging the balance sheet. She made the call to sell US-based Cripple Creek and Victor Gold Mine, which was executed in 2015 with Venkat’s full support. “I am particularly proud of having reduced the debt on the balance sheet. In the past three years, we’ve reduced the levels of debt by $1.3 billion. When I joined the company gross debt was more than $3 billion, with limited flexibility to be able to absorb commodity and currency shocks and there was no free cash flow generation across the group. The sale of the Cripple Creek and Victor Gold Mine gave us about $1 billion in proceeds so that we could do liability management to reduce the debt and the related interest burden, which helped improve the free cash flow generation in the group,” she says. The board took some convincing, but three years on, AngloGold Ashanti is in a significantly more sound financial position – it re-entered the JSE Top40 in March 2016, and declared its first dividends in four years in February 2017 – and the board isn’t looking back.

Women on top Christine is a woman executive in an industry and at a level where very few exist. In fact, she points out that there is only one woman CEO at a JSE Top40 company (Absa’s Maria Ramos). This dearth of women is something she decries, saying that big business is not accommodating enough for women – at all levels. “In the patriarchal society we live and work in, this isn’t something we can ignore,” she says. “There are certain companies that have embraced diversity at board level, but it’s still

been a challenge at every company I’ve worked in, to develop and advance senior female executives in companies.” She is a member of the 30 percent Club, in which various sectors aim to achieve a target of 30 percent of

“Lots of companies say what they are expected to say, but how many companies actually go about creating an environment that’s enabling?” women at senior levels. “Lots of companies say what they are expected to say, but how many companies actually deliver on this and go about creating an environment that’s enabling? Do they put their money where their mouth is? Can they show us where they’ve advanced women in their pipeline to become senior in their company? Can they show us the numbers?” Creating an enabling environment is critical, and Christine says she has had to put her foot down about expectations of her availability. This is not to say she doesn’t work extremely hard. She tries to get home at seven each night to have supper with her family – she has two daughters, one of eight and another of 16. But once they are in bed, she starts up again, working well into the night. She has a “no weekends” rule, which really means “no Saturdays” because by Sunday evening she’s back on her email, preparing for the week ahead. “My eldest daughter says she doesn’t want to be a CA because we work too hard,” she says somewhat ruefully.

Christine believes that she’s doing what she can to make AngloGold Ashanti a better place for women to work. Certainly, she’s bringing senior women along with her. “Women leaders who have been through it can actually break the mould. When I joined AngloGold Ashanti, there wasn’t one woman in the finance executive team. I brought two in – our chief information officer and our Senior VP of finance. Sometimes you have to take a leap of faith on a person with high potential and give them an opportunity – the kind of opportunity that’s often given to men.”

Visible integrity Christine is outspoken about the current state of the CA profession in South Africa, describing it as being “in crisis”. In her acceptance speech for the CFO of the Year Award, she said that the time has come for CFOs to stand tall. “Doing the right thing means that one has to be an ethical and responsible leader; that one has to be true to one’s values and be a role model for others. I think when one takes into account that the accounting profession is in crisis, it’s important that leaders in the profession are seen as role models and are active leaders; that they speak up for the profession and actively support other CFOs out there.” She explains that the role of the CFO has evolved significantly over the past ten years. Instead of just focusing on technical accounting and management reporting, CFOs are now far more strategic and integrated into the business. “A CFO has to be effective across the organisation, laying down a governance framework, communicating, influencing, role modelling and working in an environment where one must predict the unpredictable. It’s about doing things in a way that shows moral and ethical

CFO MAGAZINE • CFO.CO.ZA

Diversity and empowerment For AngloGold Ashanti, diversity and empowerment are not just a South African matter, but must be extended to all the regions in which the company operates. “We focus on ensuring that there’s localisation in all our regions, and encourage more rotation in the business. It’s healthy to rotate people across geographies,” says Christine.

CA(SA) siblings Veran Kathan (Executive at Vodacom), Justine Mazzocco (Executive at Deloitte), Christine Ramon and Mark Kathan (CFO AECI).

“I’ll schedule a business meeting off Regent Street, so that I can catch an hour or two of retail therapy before zipping back to the airport,” she laughs. values. And it’s not just about applying your judgement in one situation, but considering what precedent it sets for the future, and the impact decisions will have on all stakeholders,” she says. She says the recent spate of governance failures including the high-profile cases of Steinhoff, African Bank and more recently VBS, have put the spotlight on the accounting profession. “I am an

CFO MAGAZINE • CFO.CO.ZA

accounting professional working in the industry and this is damaging to our profession,” Christine says. For this reason, she says it’s critical that CFOs also acknowledge the role of management in these cases. “It’s all very well to blame the auditing profession and say that there’s been collusion, but the first line of accountability lies with the management of the company. Don’t throw the profession under the bus but ask what we as CFOs can learn from what has happened. These investigations are going to take time, but we have to capture learnings from these events.”

Christine’s “me time” Christine prioritises her time with her family on the weekends, and that includes her twin sister, another sister and two brothers. One is a medical doctor, another is a Deloitte executive, one brother is a COO and one is a CFO. Her brother Veran and her twin Justine stood

When she joined the company, in her direct reporting team she changed three people, two of whom were women and equity. Christine says that they are reviewing their operating model and she will be making recommendations that will result in further opportunities. “The role I play is more about understanding who the high-potential talent across the Finance function is, understanding the business needs, and especially understanding where the scarce skills are and then seeing if there are opportunities in those roles to make a difference,” she says. “What lacked a bit before was a pipeline of talent and we were a bit too comfortable with the way we’d done things. I’ve bought more structure into giving input into talent management.” Christine also believes strongly in the recognition of those who work with her, and when receiving the High Performance Team Award, she said, “I would be nowhere without my team. I’d like to dedicate this award to them.” She believes receiving that award has motivated the people with whom she works.

Christine is the first woman CFO of the Year, and won a record-breaking four out of the ten awards. She took home:

CFO of the Year High Performance Team Award Compliance and Governance Award Moving into Africa Award CFO MAGAZINE â&#x20AC;¢ CFO.CO.ZA

CFO AWARDS by her side at the CFO of the Year Awards, expressing their pride that one of their super-successful family had taken the coveted award. “There is competition, though,” says Christine. “But it’s healthy competition. We banter with each other. And we work in completely different spaces.” For Christine, “me time” is “family time”, although she does make the space to go to the gym, pamper herself at the salon, and indulge in a bit of shopping – especially if she’s travelled to London. “I’ll schedule a business meeting off Regent Street, so that I can catch an hour or two of retail therapy before zipping back to the airport,” she laughs. It’s clear that Christine is a driven and focused CFO, but she applies the same focus to creating something like balance in her life. l

Interesting time zones AngloGold Ashanti’s global strength lies in mitigating operational risk and currency volatility across multiple countries and time zones. The mining company has operations in Argentina, Brazil, Colombia, Australia, Ghana, Tanzania, Guinea, Mali, the DRC and South Africa. While this benefits the organisation on the upside, for Christine and her team, there’s always the potential of a downside operating across so many geographies. The Chinese curse, “May you live in interesting times” is a challenge, because times are always interesting somewhere in the world. For Christine, this is higher grade CFO stuff. She has to balance government requirements in so many different locations and watch currency volatility and gold prices in all the different regions, to sustain profitability. It’s a staggeringly complex job. “Risk mitigation for political and country risk is really about understanding the framework in the countries in which we operate,” she says. “In a number of countries, we have stability agreements, which state what our corporate tax rate is going to be, what our royalties are and what we are required to contribute in the form of community spend. “The gold price and currency are a function of our business planning process, which speaks to the balance sheet flexibility that we cater for. It’s important to understand the discretionary levers in our business.”

Moving into Africa Africa is AngloGold Ashanti’s big success story. While the company’s South African operations are being scaled back (“We’ve been mining in South Africa for a long time, and our gold resources are depleted,” says Christine), Africa has continued to deliver growth. In the last year, says Christine, Africa has contributed more than 60 percent of the company’s revenue and Ebitda. “Finance has been integral to the success of our business in Africa. Finance sits on the exco in every region and I sit on exco at Group. I give input to help steer exco in the right direction,” she says.

CFO MAGAZINE • CFO.CO.ZA

Finance plays a key role in securing the approvals we needed, working with the tax authorities and ministers of finance, most recently in Ghana. “We think that the recent investment decision made for the Obuasi project in Ghana will be positive for us and positive for Ghana and the Ashanti region. We’re well known as a successful African operator and I think this project is going to be hugely successful,” says Christine. Another key focus is the DRC with the Kibali Gold Mine, where AngloGold Ashanti is moving into underground from an open pit, and the Geita Gold

Mine in Tanzania, which Christine projects will together will deliver one third of EBITDA contribution to the business. “We will have a big step up in margins and free cash from both of these mines.” The company has also expanded into Guinea with a brownfields operation, and Christine was instrumental in renegotiating the stability agreement that covers the broad fiscal terms, the relationship and the investment into the community, to expand the mine for a 25-year period. “It gave me huge satisfaction to help drive the Siguri project,” she says.

GROWTH

THE TRANSFORMER Successful transformation requires an all-in attitude, says CFO Awards winner Peter Walsh. Toni Muir speaks to him about making it part of a company’s ethos and etching it into the hearts and minds of all employees.

CFO MAGAZINE • CFO.CO.ZA

“

I firmly believe that the biggest risk to South Africa is not corruption but the lack of economic transformation,” says Peter Walsh, recently appointed Global Chief Financial Officer at ITL, a global garment label manufacturing company that operates in 13 countries, and recent winner of the CFO Award for Transformation and Empowerment. The award was won for his work at Servest, which he left in April. Peter says that transformation is something we must get right. “White apathy is a big problem. Lots of white people were unaware and remain unaware of what apartheid was and what it was like to live as a black person during apartheid. They are also unaware of what it means to be black, or economically disempowered, in South Africa today.”

country to bridge the gap is a very big task. He said: “It’s no longer acceptable to tick BEE scorecards; we have to embrace transformation with every fibre of our bodies.”

A struggle-conscious childhood Peter’s upbringing has a lot to do with his outlook. Both of his parents were political activists – his mother was a member of the ANC in the 1970s, right in the thick of apartheid, and a member of the Black Sash, and his father was a member of parliament for the Progressive Federal Party. Peter’s mom and dad invited students from nearby townships to stay with the family for months on end, giving them a chance to study.

“It’s very difficult year after year to tick a transformation box if you don’t embrace it fully. It’s a bit of a house of cards and ultimately your lack of integrity will be felt. But if you make it part of the ethos of the organisation, it’s easy.”

In Peter’s opinion, the question we all need to ask ourselves is whether we truly believe, given the right opportunities and circumstances, whether people across the racial and socio-economic spectrum are able to perform at the same level. “If the answer is ‘no’, we will never transform South Africa successfully without enormous hardships,” he says. “It starts with belief and giving people a chance.” Peter knows what he is talking about. After all, he completely transformed the team at Servest – hence his well-deserved CFO Awards accolade. He says that, while transformation needs to be done from a business perspective, it must come from the right place.

“I recall clearly, when I was aged eight or ten, being very conscious of my relative privilege, conscious of it to the extent that I felt guilty,” Peter says. “It wasn’t a nice place to be – to feel guilty for where and who you are. I remember feeling like, how did I deserve what I had relative to these guys, who not only didn’t have what I had, but who were also being persecuted for all the wrong reasons?”

Peter pauses before continuing: “If you dial that forward, I’ve gone away from that feeling of guilt, more to a feeling of, it is what it is. I was very privileged, but I can’t change that. What I can change is how I contribute from my previously advantaged mindset and position and, in my own way, help drive South Africa and its people forward.” Peter says one can also use that energy to make a difference. “What does making a difference mean? It starts with the smallest of things. It starts with treating people respectfully, being interested, and not making assumptions. If I can be the person who is interested and makes an effort to know what it’s like to be someone else, if I’m being that, then it influences everything else that I do – the decisions I make at work, how I bring up my children, how I carry myself as a human being.”

CFO MAGAZINE • CFO.CO.ZA

GROWTH Black talent exists When Peter started in the CFO role at Servest, his finance leadership team was 100 percent white with only one woman. Six years on and it is 70 percent black and 60 percent female. Peter says he recognised that finance could lead by example. “We needed to celebrate our successes and show the rest of the business what we were able to achieve. That it is possible and that it won’t put the business at risk,” he says. Peter says that while he has “never professed to have all the answers”, with a shifting attitude, he was able to successfully transform his team. “If you had to ask the white members of my team if they ever felt threatened, they would say no. No one was ever ‘got rid of’ to make space. It was very much a case of, people left, and I replaced them,” he says. “And it was through opportunity that I found the right black candidates. If we needed to fill a role with a black applicant, we looked until we found one. It’s utter rubbish that exceptional black talent doesn’t exist. It may mean looking at how recruitment is done and understanding that finding the right person may take longer but that should always be the case anyway. The talent is there. It’s a matter of being absolutely non-negotiable. I never had any passengers either. I never had a black person in a role who wasn’t capable.”

Leaving Servest Asked whether he was actively looking to leave Servest, Peter answers with an emphatic no. “I was enjoying my leave when, on Christmas Eve, an old friend of mine from university sent me a message to call him, which I did. His company, together with other investors, had acquired ITL effective 31 December 2017 and were relocating their head office to

CFO MAGAZINE • CFO.CO.ZA

London. He presented me with a job offer for the Global CFO role. It was a great career opportunity and the chance for me to get experience in a different field.” Peter says that making the decision to leave Servest, where he had been for more than six years, wasn’t easy. “It was really tough. I learnt a huge amount at Servest and I worked with some exceptional people. Steve Wallbanks, the current CEO, is one of the most amazing people I’ve ever met, not just worked with. It was very hard to leave.” While he may have left Servest, Peter says he hasn’t “upped and left South Africa”, as ITL is very

“If someone makes an inappropriate joke or comment, call them out, tell them it’s unacceptable” much a South African business. The company was started in South Africa during the 1930s and has deep roots in the country, as well as offices and manufacturing facilities. Peter will still have ample opportunity to pursue his transformation agenda. “Transformation and empowerment will always be important to me and something I can have an influence on during my time at ITL. It wouldn’t have been in the fabric of my being to win the CFO Award had this not been the case,” he says. “In as much as Servest won this award, my new stakeholders did too. They know what it means. And they knew what they were getting when they hired me. South Africa is in my blood. It will always be home for me. I’m not a person who’s leaving South Africa so much as I’m a person who’s following a

great opportunity which includes South Africa.” According to Peter, his new role as Global CFO is a very strategic one, and includes such responsibilities as funding structures, acquisitions, corporate activity, transfer pricing, and tax. He says the shareholders are looking to double the size of the company over the next four years. Currently, ITL is the third-biggest in the world, says Peter, though it has a very small market share compared to the biggest two. “So, to double our market share, which we believe we can do, is very possible but we’ve got to really push our unique selling points – of which we have several. It’s very exciting to be at the coalface of a company like this.”

Changing hearts and minds As far as moving South Africa forward is concerned, Peter firmly believes that we all need to be part of the solution if we want to see a different future to our current reality. And it’s critical to call people out for offensive behaviour, he says. “If someone makes an inappropriate joke or comment, call them out, tell them it’s unacceptable. Oftentimes, people are too frightened to speak up, to stand up for what they believe in. But we need to have the courage to do this. We need people who are prepared to stand up and say, I take exception to that. This is what’s going to make a difference.” He adds: “I’m 42 years old now. I hope that by the time I’m 50 or 52 years old, I’ll have more influence in corporate South Africa and that I’m doing something that’s making a massive difference. But the little things are where it starts. It’s these things which change hearts and minds. And while not everyone can do big things, none of us have an excuse not to do the little things.” l

PETER AND CFO SOUTH AFRICA GO WAY BACK Peter was at the very first CFO event in 2012 (pictured). He shares his thoughts on the value of the CFO community. “I remember that first event very well! To be a part of the CFO community as it’s grown has been fantastic. There’s no doubt that in terms of my own personal brand, it has played a huge role in my being able to get my brand out there. In terms of meeting other CFOs and understanding what they’re going through, it’s been unbelievable. My engagements with Graham Fehrsen and Melle Eijckelhoff in particular have been incredibly beneficial. I know those are connections that I will have for the rest of my life no matter where I am. The Finance Indaba Africa and CFO Awards are two aspects that showcase just how big and important this finance community has become. I couldn’t recommend it more highly.”

CFO MAGAZINE • CFO.CO.ZA

CFO AWARDS

Servest’s new CFO’s vision for taking the company forward

IN WITH THE

NEW

Thabo Phokane succeeded Peter Walsh as CFO of Servest. He has big plans for the business, including continuing to drive the company’s transformation vision. By Toni Muir

habo Phokane, Servest’s newly appointed Chief Financial Officer, is making his mark on Servest, with big plans for the company in South Africa and Africa. “Transformation is the only way that we, as a country, can move forward in eradicating poverty and ensuring that South Africa becomes a better place for all who live in it. We need to make sure that we tick the boxes very carefully, and ensure we do proper training – something I’m very passionate about – so that our colleagues are given the best opportunities possible to improve themselves. And we need to support them in their development,” says Thabo. Thabo has been a part of the Servest team for five years, having started as group finance executive. After a year in this role, he moved to head up the

CFO MAGAZINE • CFO.CO.ZA

Parking division, an area in which he needed to gain inside info. He explains: “Parking was complex because of our footprint in Africa, so I was sent to several countries in the continent to understand some of the challenges we were facing.” A year after that, he was given the Security portfolio, one of Servest’s biggest divisions. Following this achievement, he joined the Servest group board as a director. Thabo is a CA (SA) with over 15 years of commercial experience. He grew up in Soweto and studied at the University of Durban Westville. After completing his articles at Deloitte & Touche (now Deloitte) he held various positions at Colliers RMS and SARS, where he worked alongside Pravin Gordhan. He observed Gordhan as having a strong work ethic, which of course is evident in the trust

“Over the past five years we have been pushing a culture of colleague recognition and relevant training not only for our back-office team, but the entire 25,000 workforce. ”

33 CFO MAGAZINE CFO MAGAZINE • CFO.CO.ZA • CFO.CO.ZA 33

CFO AWARDS

“I motivated and drove my exco team members to change their mindset and encouraged them to do things differently.”

that South Africa has in him. Thabo also worked at MTN, where he was a key driver of the transformation agenda within the realm of Phutuma Nhleko, MTN’s ex-CEO and group chairman, and our newly elected President Cyril Ramaphosa.

Looking to the future Thabo has a vision for Servest: “I see Servest as employer and service provider of choice. Over the past five years we have been pushing a culture of colleague recognition and relevant training not only for our back-office team, but the entire 25,000-strong workforce. This will enable our colleagues to replicate that culture to clients, thereby improving our client-centricity model we’ve been working on.” When asked whether he feels ready for the Group CFO role, Thabo answers in the affirmative. “I’m 100 percent ready, and the timing was just right. If you look at my career progression within the group, one could say I was groomed for this role. Although I only took over in April, I feel like I’ve been doing this for over a year already. I worked closely with Peter, the CEO and COO, so it’s been an easy transition. I’m excited.” Thabo considers himself to be an astute businessman, with strong values of fairness, hard work and professionalism. When it comes to the future direction of his role, Thabo sees himself as both a leader and team player. Having being part of senior management team for some time, he was involved in the formulation of the business strategy. His is now in a position to fasttrack some critical projects that will enable his team to achieve their strategy. This will entail, among other things, having robust engagements with stakeholders to ensure that their strategy maintains relevant, given the fast-paced and dynamic industry of facilities management. Shedding light on the current trends within the industry, Thabo explains: “Recently we have seen companies, driven mainly by those in the public space pushing

CFO MAGAZINE • CFO.CO.ZA

for in-sourcing. That gave them the opportunities to really understand the challenges, both human capital, systems and high capital expenditure requirements, that comes with this. At the back of that we saw them coming back to facilities management providers and asking for or rather outsourcing more to enable them to focus and drive their core business, which is where their core competencies lies.”

Tackling transformation Like his predecessor, Thabo feels strongly about transformation, and says he looks forward to picking up where Peter Walsh left off. “In all the divisions I’ve worked at Servest, I drove transformation. Not only as it pertained to finance, but also in exco. I motivated and drove my exco team members to change their mindset and encouraged them to do things differently. I was glad to have had a leader in Peter who was equally as passionate about transformation.” With regards to South Africa’s broader transformation, Thabo believes that corporate South Africa is not that far off the mark but stresses the need to accelerate efforts. “Because of the historical challenges, and the sentiment seen towards the end of last year, I think that with the change we are seeing in the political space, you need some political will. I believe that’s where it starts. Do that and corporates will follow. Transformation is difficult by its very nature. It’s that willingness of execs who are running the corporates to change their mindset and encourage their executive team to really look at businesses differently. We need to press the right buttons as corporates. I believe it’s a bit of give and take; we must be willing to squeeze our own margins for transformation to take its course.” Thabo believes the key characteristics African leaders must possess – be they in government or business – in order to lead their organisations in the current environment should be honesty, integrity, accountability and selflessness. l

Seize opportunity before it knocks There’s the ready way to do business. And then there’s the wrong way. The ready way means knowing what’s coming before it arrives and being prepared for your organisation’s most crucial moments.

At Ansarada, our Material Information Platform and Data Rooms apply AI to all the critical information in your business, so you can boost transaction values, close deals quickly, and seize opportunities before your competitors. Don’t settle for the ordinary way. Win with our way. The ready way to do business.

Data Rooms | Deal Preparation | Material Information Platform Sandton +27 118 815 742

Stellenbosch +27 218 828 571

ansarada.com

CFO MAGAZINE • CFO.CO.ZA

CFO AWARDS

An interview with the 2018 Public Sector CFO of the Year

LEGACY ALERT

eThekwini’s Krish Kumar “Don’t spend money you don’t have. Watch your cash flow. Get best value for money. Benchmark yourself. Respect policies and procedures. Those are the basics. But also: be a people person.” By Joël Roerig

“

They say tough times don’t last, but tough people do.” Dr Krish Kumar has worked for what is now known as eThekwini Metropolitan Municipality for 38 years. He’s been CFO for 19 of them and in two more years, he retires. Speaking at the CFO Awards 2018 at Constitution Hill, he said that being named Public Sector CFO of the Year during his “twilight years” was “very timely”. We chatted to Krish about his legacy as a fighter for ethics and fiscal discipline – and against global warming. Besides referring to himself as a tough person, Krish also used his speech at the CFO Awards to thank his team, wife, family and spiritual leader. His allegiance to those four, he later explains, means it has

CFO MAGAZINE • CFO.CO.ZA

never been hard to keep his honesty and integrity intact. Where others might describe the highly politicised public sector – not to mention having responsibility for a R45 billion budget – as a cesspool of temptation, Krish just shrugs. “I have zero tolerance for corruption and no sympathy for people who get caught. There can’t be any issues around a CFO. If the CFO is corrupt, there is no hope. You need to be careful not to be captured. You cannot buy a good man.” The people in Durban, he says, respect his integrity and see him as part of the institutional memory of the city. “I am clear about what invitations I accept for dinner and I won’t involve myself in tender awards. None of my family does any work for the municipality. At

the same time, I am responsive to local businesses, because I can do my duty without being tempted. It all comes down to your own value system: I can’t be a role model for my children if I get caught with my hands in the till.” While ethics, argues Krish, is all about doing the right thing when nobody's watching, it is also important to lead by example, as the strength of your team determines your legacy to a great extent. “I know I can’t do it alone. The tea steward is just as important as anyone else. I have been known to throw people in the deep end and I will let them speak a lot at meetings." The 1,500-people strong finance team in Durban is as different as day is from night to the one Krish

“I have zero tolerance for corruption and no sympathy for people who get caught.”

inherited 19 years ago, he says. “There were no black team members then, it was 65 percent white and 35 percent Indian. Now I am the only Indian, the majority of the team is black and the rest is made up of white and coloured people. We had a careful transformation plan. People that I saw potentially rising up to senior executive level, I gave exposure to during a two-year stint and after that I knew if they could cut it or not. Now I have sufficient depth in the team for succession planning, but that took some time. One key success factor for me has been knowledge management. Every function has a logbook: ‘how do I do this job’. I like the saying ‘who is holding your ladder?’ You need competent people around you. I don’t hesitate in parting company if that is not the case. I am only as strong as my team.” Working together with different departments can sometimes be hard, but Krish emphasises that finance can only be as good as its collaboration with others. “We fight like mad in the boardroom, but stand together when dealing with politicians. That is the way to earn respect from other deputy city managers. One of my strengths is that I read reports. If I don’t keep reading and keep learning, I will die.” When asked what he would share if he was in a room with the country’s most important public sector CFOs, he says fiscal discipline should be at the heart of any CFO’s work. “Don’t spend money you don’t have. Watch your cash flow. Get best value for money. Benchmark yourself. Respect policies and procedures. Those are the basics. But also: be a people’s person. Leadership is about relationships. You need to be confident and inspire people. Of course, credit ratings are critical for big entities, but those should be a walk in the park if you have the other things right.” Krish calls on talented CAs – he employs about 20 himself – to join the public sector. “What people don’t like is that everything is tainted with politics, but I know many accountants that don’t get involved in that and still have jobs here. For a professional, there is unlimited potential in terms of value-add you

CFO MAGAZINE • CFO.CO.ZA

CFO MAGAZINE â&#x20AC;¢ CFO.CO.ZA

CFO AWARDS A smart legacy Krish’s legacy isn’t just limited to sound financials, ethics and a focus on sustainability. It also lives in many projects, like the municipality-owned fibre optics, the National Treasury’s Municipal Standard Chart of Accounts, a 25-page glossy that summarises the annual report for banks, investors and citizens – “I write that myself” – , a transparent procurement policy that drives benchmarks, localisation and transformation, cloud-based solutions for applicable services and – in the future hopefully – free WiFi “which makes us a real smart city”.

can deliver. It is never boring, which is what kept me here. It is very challenging and stimulating. This year I delivered my 20th budget and the story has always been different.” With politics fought ferociously between parties and within the ANC, it is remarkable that Krish has come out of two decades unscathed. His insights in dealing with politicians should be textbook stuff. “Nobody is holding a gun to my head to work in the public sector. Politicians come with a mandate like ‘free housing, free water’ and you need to appreciate where those politicians come from. A lot of them have been elected because of their popularity, not the depth of their knowledge. At some stage, we had a council in which not a single person had a qualification. It is my role to prep the political leadership. For example, we have a housing backlog of 400,000 units. That takes eight years to tackle. To explain that, I take them through a financial modelling exercise.”

Krish explains. “They see big investments at the beachfront and also want to have something to show. I need to balance that,” he adds. To do this, he made R15 million available per councilor for a project in their respective wards. “It is up to them if they want to build a library, swimming pool – or what other legacy they want to leave over and above what is in the Integrated Development Plan.” Krish used the CFO Awards stage to call on colleagues to lower their carbon footprint and combat global warming. He says he has “seen the light” since Durban got involved in C40, a group that connects 90 of the world's cities in their effort to reduce greenhouse gas emissions and climate risks, while increasing the health, well-being and economic opportunities of urban citizens. “It is a passion for me,” says Krish. “I really mean it; we need to take it seriously. Look at the drought in Cape Town and the changing weather patterns. If we don’t conserve water and energy, stop fracking and look objectively at sustainability, we have a major problem coming our way.”

“You need to appreciate the role politicians play.”

Krish says he learnt a lot from former city manager Michael Sutcliffe, who comes from an academic background but is better known for his political role. “What I learnt is: ‘Let’s see it from the other side’; you need to appreciate the role politicians play, give them something and explain to them that the budget is a process not an event. You need temperament and tenacity. You have to be calm and patient, but that is not to say I didn’t lose it a few times.”

“If we don’t conserve water and energy, stop fracking and look objectively at sustainability, we have a major problem coming our way.”

The trick is to make sure that councilors achieve something for their constituency,

From a trip to a C40 board meeting, he mentions New York’s famous Empire State Building as an example of ROI of an energy-saving project. “They retrofitted the entire building, including aircons, lifts and windows. It cost $106 million, but they got a return on investment in five years because of the saved energy. It also pushed up the market value of the building, so the real returns probably already arrived in year one. It is an absolutely amazing story. We say ‘we don’t have the money’, but it just makes sense to invest.” Krish says he tries to limit his travel, but the World Bank, C40 and other initiatives that he is involved him make him likely the most frequent traveller among municipal CFOs, building relationships and learning about best practices across the globe. “Everything I know I have learned through interaction with others and at seminars and conferences. I have been the president of the Chartered Institute of

CFO MAGAZINE • CFO.CO.ZA

GROWTH

Krish Kumar with Deloitte’s public sector leader Nazeer Essop

Government Finance Audit and Risk Officers (CIGFARO), I chair the forum of metro CFOs, I have served two terms on the Accounting Standards Board, I was a commissioner on the Financial & Fiscal Commission (FFC) from 2009 to 2018, I publish articles – I have shared a lot and continue doing so.” Recently, the CFO went to Ecuador for a C40 meeting about electric buses, a Bus Rapid Transit system being one of the hottest potatoes in eThekwini’s politics at the moment, with a much-scaled down version of initial ambitious plans now likely to be implemented, although it is unclear if the CFO – “battery prices are coming down quickly” – can convince his colleagues to go with electric buses. Technology, Krish says, is what makes it possible for him to travel as much as he does. “I don’t miss a beat and am available 24/7. If you manage your team by core objectives, it makes life a lot easier. I have dashboards, I understand my cash flow and 95 percent of the work is online. And when I come back from a trip, I am back at work the next day, with or without jet lag. My work philosophy is: service to mankind is service to God.”l

CFO MAGAZINE • CFO.CO.ZA

Grueling and fulfilling Winning the Public Sector CFO of the Year Award has been the culmination of many years of hard work, says Krish, who credits the heavyweight judging panel and the thorough nominee interviews as the factors that make the CFO Awards so prestigious. “The questions nominees need to answer are grueling. It really meant a lot to me being in a group of 25 nominees and I feel very privileged that the judges, all very diverse people of high calibre, interrogated me. Because of the thorough process and the broad composition of the panel, the CFO Awards will always be won by deserving CFOs. For me it has been very fulfilling.”

Why Dropbox Business for CFO’s?

Increase visibility and centralise control

Collaborate Effortlessly

Improve performance

New admin features for Dropbox Business increase visibility and centralise control over all your company’s data.

Effortlessly create, share, and keep your team on the same page with Dropbox Paper.

We’re continuously enhancing our global infrastructure to improve performance and better support through our international footprint.

• Network Control restricts Dropbox activity to the Enterprise team account when using the company network, and seamlessly integrates with marketleading network security providers. • Device approvals limits the number of synced devices to help avoid data leakage. • A more powerful audit log allows admins to safeguard company data through targeted investigations of user activity.

• Create and share collaborative documents with teammates. • Team-only sharing allows admins to control how company information is distributed. • Gain visibility into Paper usage with the ability to sign in as user, monitor events in the audit log, and enable or disable Paper.

• Optimised regional network performance accelerates data access. • See faster product performance as a standard part of our investment in our Business offering at no additional cost.

• Keep company info secure through full data ownership and access privileges. • Paper iOS and Android mobile apps allow you to respond to teammates while on the go.

300 000+ companies trust Dropbox Business

If you’re ready to get your team in sync with Dropbox Business, contact CloudSmiths — your Elite Dropbox Partner. www.cloudsmiths.co.za | christopher.hayes@cloudsmiths.co.za | +27 84 202 5766

CFO MAGAZINE • CFO.CO.ZA

CFO AWARDS

Eight questions for award-winning Aspen Pharmacare CFO Sean Capazorio

FROM COLD FIGURES

TO GOOD STORIES

“It took 18 months of hard work to achieve, but we can now manage the business from a single piece of paper,” says Sean Capazorio, the group finance officer who has been an instrumental driver of Aspen Pharmacare’s growth into a R31 billion business operating in 150 countries. At the CFO Awards, his most recent achievements were celebrated with the Finance Transformation Award. We spoke to Sean about the global success of Aspen Pharmacare, the role of finance and how he managed to turn the numbers from cold figures into good stories. By Ebrahim Moolla and Joël Roerig

CFO MAGAZINE • CFO.CO.ZA

CFO MAGAZINE â&#x20AC;¢ CFO.CO.ZA

CFO AWARDS

What has been the highlight of your career at Aspen?

“I started my career at Coopers & Lybrand and after leaving to serve in the army, I joined IT group Unisys as a finance manager. I then moved on to SA Druggists, a pharmaceutical, healthcare and chemical group, as a management accountant, working on group tax and corporate finance matters. After a period of 18 months, I transferred to an operational finance manager role in the group’s pharmaceutical division. Subsequent to Aspen taking over the pharmaceutical segment of SA Druggists in 1999, I was offered the FD role for the South African pharmaceutical business segment which over the years evolved to the role of finance officer for the group. “Over the past 21 years of service in various roles, the group has expanded operations significantly across the world. We had a commercial pharmaceutical turnover of R1 billion in 2000 and in 2017

the figure grew to R31 billion. We sell products in 150 countries and have employees in 47 countries. It’s been quite a journey.”

What part have you played in Aspen’s global expansion strategy?

“Finance has been instrumental in globalising the business and driving value in and integrating acquired enterprises. We have bought manufacturing sites in Germany, France and the Netherlands, for example, which have vastly different cultures. Finance helped take the lead in bringing them in and converting them into the Aspen configuration. This was important, as manufacturing is a key strategic advantage for us. “Following the completion of a significant deal with GlaxoSmithKline for thrombosis products, we were required to set up an infrastructural footprint in Europe to support the new revenue stream. We previously sold through distributors on the continent. In six months,

we had to populate 17 European countries and create a structure of sales and marketing offices within regulatory boundaries. We followed a similar process in South America, closing a deal with Nestlé for infant milks and we set up structures for distribution and manufacturing. “We recently established a presence in China, and took a year to set up operations. The market now boasts the biggest sales representative force and the fifth-largest turnover in the group. The keys to success have been putting the right people in the regions and leveraging their knowledge, moving quickly and cost-effectively, while developing the supply chain. As we do each deal, we learn about the cultural and commercial differences of the territory as well as the associated barriers to entry, which, naturally differ from country to country. Finance has been a strategic partner in the implementation of these acquisition drives, making sure that the culture is aligned and connecting the dots across the group.”

“It took 18 months of hard work to achieve, but we can now manage the business from a single piece of paper.”

CFO MAGAZINE • CFO.CO.ZA

What did Aspen’s finance transformation look like?

“Given the way the business was changing, we had to alter our segmental reporting to accommodate a global footprint and to assist the market to assess our performance better. We used to have a regional approach, covering South Africa, sub-Saharan Africa, Asia-Pacific and the Rest of the World. This was tricky, because we had been reporting this way for many years and had entities in many different geographies. “Our new structure was launched in June 2017 and was well accepted by the market. We were not sure of the impact that it would have and conducted extensive research before proposing a structure that was sound and made commercial sense. There was a lot of resistance internally initially, because it meant a lot of hard work had to be done to change systems throughout the group. However, once they saw the benefit and realised it was aligned to the way that Stephen Saad, our group

chief executive, commercially assessed the business – including the effective management of key strategic brands and therapeutic groups – the revised structure was embraced internally. The board was very appreciative of finance’s role in restructuring the group reporting format. “Our vision is to deliver value to all our stakeholders, including patients, funders, consumers, shareholders, government and investors, so we run a full stakeholder programme. We try to manage all concerns in our reporting, focusing quite heavily on patient-facing data, with financial performance at the core. There is a sectoral tension regarding the profitability of pharmaceutical companies and product pricing, but we are well positioned in reviving and sustaining older traditional brands and offering high quality, affordably priced products. We tend to anticipate problems, as we have a close relationship with the analyst community and Stephen Saad is adept at providing balanced commercially relevant answers.”

How has the collaborative management reporting benefited Aspen?

“We can now examine how key brands are performing across the group against the backdrop of a complicated and integrated supply chain. Our thrombosis product, Fraxiparine, for example, has a very complex supply chain involving different production stages in the USA, the Netherlands and France. Our new way of reporting allows us to tell the story of how the group is performing and the contribution from our core brands and therapeutic groups across a complex integrated supply chain. This has added immense value. Without it, we wouldn’t be able to do value-added segmented reporting. “It took 18 months of hard work to achieve, but we can now manage the business from a single piece of paper. It’s not complete, but the process has been our proudest moment over the past two years. It’s also helped us to kick off a technology enhancement cycle.”

CFO MAGAZINE • CFO.CO.ZA

CFO AWARDS

How are you leveraging analytics?

“We have tried to strike a fine balance between dedicated teams doing basic accounting and those doing analytics. The analytical space is our focus as we seek to understand trends and look at group-related data. This is where we are spending a lot of time, even in terms of recruitment. The numbers, however, must tell the story, and too much time is spent on checking the accuracy of data. We want to automate this process and interface. In time, we expect the percentage of manpower dedicated to analytics to increase. “Finance’s mantra is to know the details, overall strategy and run a collaborative business. Aspen is run like a small business, notwithstanding the big numbers, and it is a very entrepreneurial organisation. Analytics are fully embedded not just in finance but commercially as well. This is part of the Aspen DNA. We harness external and internal data to guide our activities, and business unit reports are analytically driven.”

6 46

What role do risks and regulations play? “We are a tightly regulated industry in terms of phar-

CFO MAGAZINE • CFO.CO.ZA

maceutical compliance, controls, registration and selling, and there is a trend to raise standards worldwide. Globally, governments are trying to regulate pricing because healthcare is such a big spend, so we have to balance price pressure and increased costs. You can’t sell a pharmaceutical product like you would a car. There can be a lag of up to five years to register a new product because of the need to gain approval from the authorities and to conduct the supporting tests. “We have dedicated teams that monitor changes, ensure compliance and find areas of advantage. We have rigorous hedging processes and a comprehensive treasury team that focuses on general forward cover. We have introduced constant currency reporting to remove the impact of forex volatility. Lastly, we find that relationship-building with the authorities is immensely helpful.”

What are your leadership qualities?

“I’m a fairly serious output-driven leader, but not a rigorous office manager. The Aspen culture is a good fit for me. Reporting lines are quite fluid and it isn’t the typical corporate hierarchy. I have an open-door policy with my team

and don’t micromanage. I expect people to know the details and the big-picture perspective. Once I’m confident in their abilities, I delegate and leave them to work within the provided framework. At the same time, I’m not afraid to roll up my sleeves and get involved when necessary. Communication is crucial, so I have regular catch-up sessions and forums.”

How do you deal with succession and mentoring?

“We try to grow our own timber and develop our teams. We have adapted where possible a homegrown model, building up those in middle management to more senior positions. Succession is a challenge because I have been here a long time and know the organisation inside and out. In terms of recruitment, I look for honest, technically and commercially sound, energetic, forward-thinking self-starters. They also need to be able to change the message for different cultures. “Coaching is generally an informal, on-the-job process, unless I have people in new positions, in which case I set up monthly calls to get feedback and offer advice. The more you teach others, the less you have to do yourself, so I enjoy it. Aspen’s employees are hungry to learn.” l

SHAPING FUTURE BUSINESS LEADERS IN AFRICA. The UCT Graduate School of Business has been setting the pace for business education in Africa for over five decades. We are committed to producing conscious, socially-aware leaders and developing individuals who drive meaningful impact in their field. Fulfil your leadership potential and join us for a transformative learning journey. Our suite of Executive Education short courses offers you a focussed perspective in key areas of business competence, while our internationally recognised postgraduate degrees delve deeper into the fundamentals of effective leadership. Start future-proofing your career today. Because a new world needs new ideas.

APPLICATIONS FOR ALL PROGRAMMES AND SHORT COURSES ARE NOW OPEN. SMS

UCTGSB

43884

TO GET STARTED.

www.gsb.uct.ac.za/course-ﬁnder

CFO AWARDS

CFO Awards nominees share how they get the most out of their teams

TAKING TEAMS

TO THE TOP We asked some of our CFO Awards nominees the same question: How do you get the best out of your teams? Hereâ&#x20AC;&#x2122;s what they had to say.

Michelle Pienaar, CFO at Marsh Africa "For me it is important to lead by example. I like to believe that I have an open-door policy and I feel like I have a responsibility to develop the colleagues in my team and help them to be successful in their roles, even if that means that one day they will go somewhere else. We often collaborate as a team and have open discussions about what they feel is working and what isn't. "I also think it's important to challenge the team. One of our global priorities from a finance perspective is to elevate the strategic impact of finance, moving away from simply reporting to providing business insights. "My current head of financial planning and analysis Ugen Pillay is someone who has grown so much since she joined my team. She has developed into someone who is very analytical and provides valuable insights to the business. Ugen also now sits on the SA executive committee. It makes me so proud to see my team grow. It is really very rewarding for me."

CFO MAGAZINE â&#x20AC;˘ CFO.CO.ZA

Michelle Pienaar

Udayan Sen, CFO Southern Africa at BP Plc “I deliver by empowering people, delegating tasks, holding people accountable and hiring staff who have a track record of performance. I do not subscribe to micro-managing as a leadership style. In South Africa, capability is a key issue across industries. That said, no one comes to work to deliberately under-perform. One has to be patient when there is clarity on what is required. We have to get the right talent and empower people to deliver extraordinary results. It is important to focus on the positives, rather than accentuate the negatives – an inspired employee seldom disappoints! It is about understanding people’s strengths and giving them space, and then managing them ruthlessly with the right guard rails around them.”

Tryphosa Ramano

Tryphosa Ramano, CFO at PPC I’m a collaborative leader. I think it is important to discourage a working culture where someone works overtime and says, “This is mine alone.” Everything needs to be signed off by someone as we work in teams. We make sure that we learn from each other. Also, I am quite keen on the development of other people. To this end, I like offering opportunities to other people to extend and deepen their knowledge by attending various courses, whether locally or abroad, be it in the USA, Dubai or Rwanda. What is critical is the content of the course. I recently sent my second-in-command to attend a course in Dubai on forecasting, as one of the problems in PPC is the lack of a forecasting tool. There were some in the organisation who thought that I should have found something closer to home. However, our focus was on that the course offered. In asking them to attend the course, I made it a condition that on their return, they must showcase what they learned. The feedback I received from the person who attended the course was that they felt empowered by my faith in them.

Udayan Sen

CFO MAGAZINE • CFO.CO.ZA

CFO AWARDS

Jan Hofmeyr, CFO at OUTsurance “I like to be both detailed and focused on the big picture. I need to be visible to my team and participate in their conversations on the floor. I see my most important job as giving the team the broader decision-making context. I love taking them out of the office for a couple of hours to explain what we are trying to achieve and keeping them motivated and engaged. I try to be authentic and honest, as there is nowhere to hide in our corporate culture.”

Joe Ndala

Joe Ndala, CFO at AECOM Africa “I am a strong advocate for enabling my team to fly and to be innovative; I always motivate them to push beyond mediocre performance; and I lead from the front by good example. I believe that since those who report to me are qualified they know their objectives, deliverables and deadlines – then why interrupt their creative minds? I give people clear objectives and communications and provide the required tools. Off course, there are younger or inexperienced team members who need coaching and mentoring; they deserve more attention to realise their strengths and capability – I always make time to guide them. I am known as a man who strives for integrity and who is not prepared to act hastily or to sign documents that are put in front of me without proceeding with absolute caution. I expect a similar standard from my team.”

CFO MAGAZINE • CFO.CO.ZA

Jan Hofmeyr

Silindile Kubheka, CFO at National Treasury “I’m a firm person but a democratic leader. I listen to what my team is saying – we have a discussion as opposed to me dictating to them. I don’t micromanage but I understand the personalities within my team and how they are likely to react to various tasks.” I’ve learnt to better manage my relationships with those above me. It used to be a case of what they say, goes, and this impacted my ability to reach my targets. I now communicate my deliverables and challenges, and prioritise. I also have to coach my team quite strongly, in terms of them understanding my working style. I encourage group coaching as means of improving working relationship with my team.”

Osman Mia

Osman Mia, CFO at AstraZeneca South Africa and Sub-Saharan Africa “Team management across the organisation cannot be achieved sitting behind one’s desk. You have to be curious and want to understand the whys and hows across your team network, as well as across the entire organisation. This is how you build your financial and business acumen, which you then translate into coaching and mentoring your staff to be business partners and financial controllers who are valued and trusted. I always have the best interests of my team at heart.”

Silindile Khubeka

CFO MAGAZINE • CFO.CO.ZA

GROWTH

CFO MAGAZINE â&#x20AC;¢ CFO.CO.ZA

An interview with Elvin de Kock, CFO of the recently rebranded Etion Limited

PLAYING IN A NEW

(CYBER)SPACE

“Everybody is considering how to use FinTech to improve their businesses. More and more companies are looking at how they can exploit technology to increase their competitive edge. In the finance community it is still early days, but I think technology is going to be majorly disruptive,” says Elvin de Kock, CFO of Etion Limited. By Toni Muir

lvin de Kock, who took on the role of CFO of Etion Limited in January this year, believes that while the use of technology in decision-making will add immense value to businesses, South Africa is not yet on par with other, more developed countries. “If you take artificial intelligence (AI) for example, South Africa is still some way away from complete AI. Globally, the level of adoption of complete AI will be earlier. Certainly, some of the bigger banks are already looking at AI, while some of the

insurance companies are looking at blockchain and how they can use this to improve their reinsurance processes.” Will technology replace the finance function – or the CFO? No, says Elvin: “There’s a continuous pressure to optimise cost structures in business, so I can see AI being a natural progression of some processes and it will certainly increase value because routine tasks are automated, but it’s about using AI to add value to the business. In the longer-term, do I see the role of the CFO becoming defunct? Not at all.”

Juggling Elvin joined Etion at a very interesting time, as the business has recently finalised the acquisition of LAWtrust and has also rebranded from Ansys Limited to Etion Limited. He had to hit the ground running. “It was also financial year end,” he laughs, “but luckily most of the finance team that was here before my arrival is still here, as is the person who acted in the role of CFO, who moved back into the role he was in previously. ”

CFO MAGAZINE • CFO.CO.ZA

GROWTH

“You have to ensure that what you put in place is proportionate and fit for purpose in the business. You don’t want to use a sledgehammer to crack a nut!”

Why finance “You meet these people who say, I’ve got my calling. To be honest, I’m still waiting for that calling (laughs). I left school without much – that was back in the 70s during apartheid. I soon realised that I wouldn’t be able to afford a family or do all the things I’d like to do on a clerical salary like I had at the time. I thought, I’m reasonably good at numbers, so I considered what career path I could use to leverage that competency. My lucky break came when I worked at Reuters Limited. They invested quite heavily in their people and gave me the opportunity to not only finish my CIMA, but also to travel to the UK – all at their cost – to attend advanced courses. Would I do it differently? I don’t know. Maybe I would’ve started earlier instead of going through the trial and error of different roles over the years."

CFO MAGAZINE • CFO.CO.ZA

So, there’s continuity in the dayto-day finance function, which is ideal, and which has allowed me the space to get more involved in the acquisition.” Etion is currently driving a much bigger strategy than previously, transforming itself from a technology engineering business to a digital technology solutions provider, he adds. Etion, a wholly owned South African company operating in the digital space, has been around for more than three decades, and has a strong history of design and manufacturing, having developed world-class expertise in rail, mining, telecoms, defence, and online security. The organisation currently operates in the areas of safety and productivity, Digital Network Solutions and Original Design

Manufacturing, which houses the group’s current cyber security and defence offerings. The acquisition of LAWTrust is thus very complementary and will bolster Etion’s cyber security offering. Work on the LAWtrust acquisition started last year, prior to Elvin’s arrival, and he says current efforts are centred on meeting the conditions of the precedent and integrating that business into Etion. LAWtrust, a well-established company, provides commercial and in-house encryption solutions. It is one of only two entities that can issue electronic, digital certificates, explains Elvin, and also runs the ID card system for Home Affairs. “It’s a really exciting acquisition; a game-changer,” he says enthusiastically. “It will catapult Etion into a

Golf and Pilates “Every time I get onto the golf course I say, ‘Why don’t I do this more often?’. It’s so nice to be outdoors; it’s so relaxing. About two years ago my wife dragged me along to her Saturday morning Pilates class. It was a grudge participation. After my first day, needless to say I was sore all over. But I’m sold on it now – it’s so good for the body. I now go every week, Saturday mornings 8 o’clock, that’s part of my routine.”

new space. It will allow us to take what we already do and build onto it. The opportunities on the horizon are so much wider now.”

Fit for purpose Elvin’s experience lends itself well to his new role. Over the course of his career, he has been a CEO, a CFO (twice) and a CRO, and run technology operations in a large bank. He says that after his first meeting with Etion CEO Teddy Daka, he was sold. “It felt good,” he says, adding that the strategic thrust at Etion is very important. “When you listen to most companies, their strategic thrust is about shareholder return, which it is all good and well, but Etion has a greater goal. The company is driving an accelerated growth strategy, which will see it operating in a much larger turnover bracket by 2023 and the most important reason for this is that it will create 1,000 to 1,500 direct jobs and make the various businesses within the Etion umbrella sustainable. That’s pretty powerful and something which resonates with me.” Elvin says that the journey to get to this target is critical and will be done by both acquisitive and organic growth. “The key question is, how do we develop an organisation of competencies that will take the company to this point?” he says. He admits that he has had to apply himself to the matter of creating the right structure and processes to enable the business to deliver on its strategy. “I’ve had to consider how I,

as CFO, go beyond the traditional accounting role and move to adding business value. It’s about communicating growth insights, scanning the horizon and analysing this effectively, and adding commercial value.” His new role has, however, been challenging at times, Elvin says. “When you’re coming from large multinationals to a smaller company where the processes and governance you’re accustomed to perhaps aren’t there, it takes some getting used to. We are a listed entity on the AltX, so there are things we have to do, and then there are things which are appropriate for the business. You have to ensure that what you put in place is proportionate and fit for purpose in the business. You don’t want to use a sledgehammer to crack a nut!”

Finance under fire Asked what he thinks is the most pressing concern currently faced by those working in the finance sector, Elvin answers without hesitation: “The impact of all of the corruption issues that are surfacing now – and surfacing quick and fast. Also, the impact on the reputation on financial professionals overall. Once upon a time, South African CAs were highly sought after, now there’s this stigma. How do we collectively recover and what actions do we put in place to restore that trust in the South African finance community as a whole? I don’t have the answers. I think we all need to ensure that in the spaces where we operate, that we uphold governance and ethical standards without fail. It’s a very difficult time.” l

Traits of a great CFO “The CFO role is about financial stewardship and building trust with your stakeholders – this being your board, the shareholders and the investment market. I think what’s key to the role is how you add value delivering on the strategy of the business and give input to not only the delivery and execution thereof, but also the development. And that’s in an environment where governance is adhered to and exercised appropriately.” As for the skills, I think it’s different for everybody. There’s certainly something about being a team player. I also believe that integrity is a key attribute. You need to be able to stand independently, even if you’re the lonely voice out there; it’s that iron-clad integrity that says we can’t do this. From a people management perspective, it’s important to know how to listen to people because, to lead effectively, you need to listen effectively and can get perspective on other people’s insights. You have to realise that you don’t have all the answers.” “My strongest attributes include being a team player and listening well. I also make up my own mind and am very independent about that. I think I’m a natural mentor, because I’ve seen the value of this in my own life. So, I do invest in that. I don’t like the formal process, but my door is always open to others. I believe we don’t all have to make the same mistakes and if we can shortcut that learning, then we all benefit, including the organisation.”

CFO MAGAZINE • CFO.CO.ZA

GROWTH

CFO MAGAZINE â&#x20AC;¢ CFO.CO.ZA

Curro CFO discusses what it takes to create 80 schools in 21 years

TIME FOR

SCHOOL

Curro has proved to be so successful at opening new schools that they doubled their target for 2030 from 40 schools to 80. CFO Bernardt van der Linde discusses how they identified a gap, and how the finance team is navigating such rapid growth. By Georgina Guedes

fter completing his articles at PwC, and working for two years as a financial writer at Finweek, Bernardt van der Linde joined PSG. He worked there for three years, ultimately taking on responsibility for the company’s investment into Curro, the growing private schooling group. Then, in 2011, Curro’s CFO became the CEO, and Bernardt was given the opportunity to take the reins as CFO at the group. Growth was the name of the game at the time, and what happened next was owed to the hard work of Curro’s whole finance team and workforce. “There was a window of opportunity to invest into schools. Curro was a small company with big scope and potential in the market. So we were trying to make sure we made good investments, and to expand successfully,” he says.

They do this through a strategy of developing, acquiring and managing independent schools. The strategy

“We’d grown so rapidly, we changed our vision to achieving 80 schools by 2020.” has yielded impressive results. “In 2009, when PSG invested into Curro, there were three campuses. PSG invested the capital to grow the number of schools. At the time of listing in 2011, we had around 12 campuses, and we adopted a vision to have 40 by 2020.” Two years later, they had to rethink their vision. “We’d grown so rapidly, we changed our vision to achieving 80 schools by 2020.” While this growth is an impressive indicator of success by anyone’s standards, Bernardt is not one to rest on his laurels. “Hopefully we’ll be having successes, but unfortunately, it’s not possible all the time. We’ve made some mistakes.”

GROWTH What they got right The largest part of Curro’s development strategy is starting schools from scratch.

“Government has a big backlog of building schools, especially in rural areas, so they don’t always focus on middle to higher income areas in terms of establishing schools. ” “We process a lot of quantitative data, and we look at the demographics of the area, including income levels, whether there are other schools there, and what they are charging. We put that all in a big calculation to see what school fees we could charge to get an appropriate investment return, to see if it’s viable to build that campus, in our opinion,” says Bernardt. “Or, to put it more simply, we build campuses on pieces of land in good locations, at reasonable prices.” The other aspect of their growth strategy is acquisitions. “Wherever there are existing schools that we can acquire in terms of ethos, culture and the right price, we’ll do it. But there are obviously only limited schools that can be acquired at any time, so we can’t make that our primary focus.” Curro schools charge between R1,700 and R8,000 per month in fees, depending on the area, the grade, and the product that’s on offer. “Broadly, we have two divisions in the market. We’ve got Curro Traditional, which are pitched at around R4,000 per month on average, and have a maximum of 25 learners and a balance of sports and culture. Then we’ve got the Curro Academy market, which averages at around R2,500 per month, with 35 learners per class. They have slightly less subject choices and sports and extramural activities, but there’s no quality difference in the academic outcomes.” The company targets areas of rapid new development where government isn’t delivering new schools.

CFO MAGAZINE • CFO.CO.ZA

“Government has a big backlog of building schools, especially in rural areas, so they don’t always focus on middle to higher income areas in terms of establishing schools. Their focus is on the rural areas, where people can’t afford to pay school fees. That leaves an opportunity for private providers in higher income areas.” Bernardt says that this means that Curro has developed a good relationship with government, working together with the state as far as possible to see how they can assist one another. “Whenever we build a school, it relieves the pressure on government.”

In the staff room Bernardt says that Curro is a great place to work. “People joining us tell us that we have a good culture here. Overall, people in education are really good, helpful people, who are focused on development, so I think we’ve got a good and safe culture in order to operate.” He says that the organisation was founded by Chris van der Merwe, who was the CEO until last year, and even with the rapid growth, they have managed to retain their entrepreneurial spirit. “We can still make

quick decisions without getting caught up in too much red tape to overcomplicate matters.” He says that his team is agile, having learnt to cope with rapid expansion. “There were processes that we had to establish almost from the start, but going from three campuses to 60, we’ve had to change or convert them to be more appropriate to keep up with the growth of the organisation. We try to keep our agility but be able to cope with the volumes. With 53,000 learners and 5,500 staff members, we’re quite a big organisation now.” Bernardt says that the executive heads of the schools are empowered to make their own decisions. “They must be in charge of their school. We can’t sit here at head office and micromanage 60 different campuses, so for us it’s really about empowerment and enabling an environment where people can make their own decisions, operate and do their best. Obviously, they are sitting there in front of the school, in front of the parents and they need to be able to make decisions. They can’t wait for us to come back to them.” There are about 120 people at head office, and 25 in the finance department. Some of the functions are kept locally at the schools and some are centralised. “We’re now moving to more of a shared services environment, so that we can improve quality and reduce costs by having more of the processing and accounting done centrally. We’re centralising, developing systems and improving processes continuously, looking at any area where we see that there can be an improvement.”

In fact, Bernardt describes himself as a lazy person. “I’m always looking for shortcuts or a better way to do something. It irritates me if people are still typing invoices by hand. Why should someone type something in on a computer, print out an email,

“We can’t sit here at head office and micromanage 60 different campuses.” print it again and capture it again? I always say what machines can do, they should do and what humans can do, they are better at. Humans are not best at mundane repetitive tasks. Machines are. So I always look for ways to improve, to make the model better and cleaner, so we can afford more people or deliver private school education at lower prices.” Sounds less like laziness and more like efficiency...

A school of his own Bernardt has four children of his own, a daughter of ten and sons of seven, five and three. His friends joke that he’s trying to fill a school of his own. He says that hic children keep him very busy, so he comes into the office for relaxation. When he can get to it, he mountain bikes, and manages to get in a round of golf once or twice a year. l

THE GROWTH OF CURRO’S INDEPENDENT SCHOOL EMPIRE 2011 – 12 campuses 2012 – 22 campuses 2013 – 26 campuses 2014 – 31 campuses 2015 – 41 campuses 2016 – 48 campuses 2017 – 51 campuses 2018 (to date):

60 campuses with 53,000 learners Vision for 2020

80 CAMPUSES CFO MAGAZINE • CFO.CO.ZA

GET SMART

CFO MAGAZINE â&#x20AC;¢ CFO.CO.ZA

HOW TO

RULE THE ROOST Nando’s founder, entrepreneur and now passionate anti-malaria activist Robbie Brozin is one of the most-anticipated speakers at CFO Day 2018. In a conversation with CFO Magazine, he talks founding an international brand on instinct, values and fun – as well as sound principles for ensuring longevity. By Kate Ferreira

t’s hard to say precisely which Nando’s advert first cemented their reputation as a gutsy, cheeky brand. Over the years, the restaurant chain has taken on politicians, race relations, gender norms, corruption, and sport – making bold statements and poking fun with just enough edge to land a lesson. So much so that when a particularly juicy scandal hits the headlines, the ‘twitterverse’ is quick to ask “when’s the Nando’s take on this coming?” Founder Robbie Brozin is just as sharp and bold; he's happy to call a spade a spade, and keen to get on with the job at hand. He is also the first to admit that the birth of Nando’s didn’t play out as planned. Robbie and co-founder Fernando Duarte bought the Rosettenville corner café called ChickenLand in 1987, and Robbie jokes that he had visions of being the kind of investor that just pops in to

collect the money on Monday mornings. Instead, he found himself increasingly drawn to the business, a business that would grow into a thriving international chain that dominated the last 30 years of his life. “My background was more commercial. Fernando and I were both in electronics. We didn’t know much about the restaurant business; I just loved food and I loved eating,” says Robbie. “What we found was that the restaurant business was hard and detailed, and a lot of work went into it. But I found that I really enjoyed this business. And the more I worked in the restaurant the more I loved it, and the more I found that I could be comfortable in it.”

People over poultry After rebranding, Robbie says rolling it out to further locations was just “pure instinct to start off”, but that he and Fernando

knew they wanted to create something different, to create a brand. “And that morphed into wanting to create a movement. It wasn’t just about selling chicken,” he says. “Because it is a hard business, we needed to create an environment for the people that worked there to enjoy themselves, and not be treated like numbers but as individuals.” Hiring the right people is just as much a key element of the brand as its obviously strong sense of design. Robbie talks equally proudly of both the quality of the chicken they serve and the people they bring into the fold. “We ensure that we keep food standards high, and that we hire the right people. We have always hired people ahead of growth. It was just one of the kind of fundamentals that we had from the start.” And they haven’t strayed far from those fundamentals in

CFO MAGAZINE • CFO.CO.ZA

GET SMART

three decades. “If I look back and ask what Nando’s is all about, it’s quite simple. The first idea was to ‘have fun and make money’. You can’t just be about fun, because making money enables the sustainability of your business. And you can have fun and have operational excellence at the same time. In fact, we found that the more fun we had in doing the operational excellence side of things, the more we tended to make money. The second part is about changing lives one chicken at a time.” Changing lives really is an outcome that Robbie believes they can and do achieve. Not every time, he admits, because “you can’t force people to participate or to come along with you”. But he believes this part of the vision reflects the deepness of what Nando’s wants to do – the longevity of the model, of their interaction with staff, their engagement in a community, and so on. “We’re not in it for instant gratification, but the longer term. We grew slowly, and we look for people who share our values of pride, passion, courage, integrity and family.”

BITING BACK AGAINST MALARIA With the Nando’s brand at a mature level, these days Robbie is applying much of that famous energy to fighting different fights – specifically tackling malaria. At the time of this interview. “We’ve worked in the fight against malaria for about 12 years. What started as a plan to visit all the Nando’s in Africa became an adventure in handing out malaria nets, and when I did that I began to understand the impact the disease has had on the continent and that we’ve never really won a battle against it.” The seed for Goodbye Malaria was born in that moment. Goodbye Malaria is an initiative started by African entrepreneurs (including Robbie) that – among other things – supports indoor residual spraying as a key elimination method. In 2015, for example, the World Health Organization (WHO) recorded 212 million cases of malaria and 429,000 deaths – 90 percent of cases and 92 percent of deaths occurred in Africa. The toll in sub-Saharan Africa is huge, with 75 percent of malaria-related deaths stemming from the region – with under-fives accounting for 70 percent of all malaria deaths. Mozambique is considered a high transmission country, shouldering approximately 3 percent of the global malaria burden – making it a strategic focus for regional elimination. “We’ve had huge success particularly in southern Mozambique. This past ‘spray season’ (2017), we protected over 700,000 lives spraying over 200,000 houses in southern Mozambique. This year (2018) we are expected to protect over 1.25 million lives, spraying over 450,000 houses,” says Robbie.

CFO MAGAZINE • CFO.CO.ZA

A compass for flying the coop These five values continued to guide them in terms of their international expansion too – into over 23 countries as diverse as the UK, Canada, India, Australia and Qatar. Robbie says that they have put tremendous effort into unpacking core values and understanding how they apply across the territories and cultures in which they operate. “There’s no value in there that doesn’t ‘translate’, and there’s no question that the companies in each of the countries respect and adhere to those values. There may be locally specific understanding of, for example, how you understand integrity in Malaysia versus how you understand integrity in the United States, but the essence of being an upright citizen and living your life with integrity is universal. It’s what everybody aspires to; what your grandmother taught you. And everybody enjoys working within that framework.” About five years ago, Nando’s started a process called the Compass programme. Through facilitated workshops, each country works on defining these values within the corpo-

rate framework. This bottom-up process, Robbie says, means that there is a true sense of ownership and inclusion when it comes to the principles – rather than this being something imposed on each country team from head office. “That approach has been a real breakthrough for us,” he says. “It’s about localisation, not colonisation.” How this plays out practically for expansion into new territories is then also about finding the right leadership to partner with. Robbie is very keen on working with “thinkers, not cookie cutters”. The CEOs they want to work with need to understand that Nando’s is not just about profitability, but also about impacting and changing people’s lives.

Financially fit for purpose “Ultimately,” says Robbie, “people make our chicken, so the success of the business depends on how you treat your people.” This ethos means be prepared to take longer to settle into an area, longer to make a profit, and this is where the right shareholder or investor mix is critical. Robbie says: “We need patient capital. It’s not a business with a licence to print money from the get-go. If you’re private equity firm or a listed company that needs to show profit in the short term, Nando’s in a new territory is probably not the right investment for you. Certainly in our mature markets, these restaurants are very good investments. But we are privately-held and do things on our terms.” This is a matter in which alignment between leadership and shareholding becomes critical. “Your shareholders will need to understand what your investment strategy is. That’s the first part of any kind of investment relationship – understanding what your shareholder’s intent is.” Internally, this alignment is just as important.

Robbie believes that there must be a close relationship between CEO and CFO, and that both must have a clear understanding of the vision of the shareholders, and the vision of the organisation. Robbie, who frequently advises younger business people, cautions his mentees that it is best to wait for the right investor: “It's a discussion I am having with a lot of young entrepreneurs now that are starting out. They are so hungry for money that they’ll sign any document. They’ll say to me ‘we've got this funding and that funding’, but I tell them to go and ask what the intent is, because if your investor wants to make money in three years and get out, that might not suit your timeframe. You’ve got to understand what their capital is worth.”

Having a heart

Another example is the Nando’s art programme that sees them procuring art for offices and restaurants around the world directly from talented young South African artists. “We believe their beautiful art makes our chicken taste better, makes our restaurants more vibey. But it’s got to work in both directions. We are not just dishing out cash. If we were, it wouldn’t be a sustainable way for these artists either.” Nando’s employs a curator to oversee this and to establish that the artists brought into the collective both fit the criteria and are world-class. In broader procurement too, there is a required South African plug-in of about eight percent, no matter where that restaurant is ultimately located.

In 2010, Robbie stepped back from the role of CEO to concentrate on the philanthropy and culture aspects of the business. Being purpose-driven or committed to social good need not hold you back financially, he argues. It certainly hasn’t for Nando’s. “In a business like ours, where we aim to change lives and leave the world a better place than before, you need to understand that that aspiration shouldn’t be at the cost of the business.”

The roots of Nando’s clearly run deep in the South African soil. And Robbie remains optimistic about the country – especially in 2018. “I'm hugely enthusiastic and excited about what's going on in South Africa at the moment. I think we are on the brink of some really good things, and that the next ten years are going to be the best in South Africa's history. If Cyril [Ramaphosa] can maintain the kind of integrity that he's doing at the moment, I think it's going to be brilliant.”

It was a lesson learnt for Robbie, who says in their early phases, corporate social investment (CSI) was just a cheque the CEO or CFO signed to tick a compliance box. “Well integrated, strategic CSI can actually create a much better business for you. We’ve got various projects that we run that are completely integral to the Nando’s brand and our performance. A great example is our partnership and support of the Harambee programme, which focuses on youth employment – arguably the biggest challenge facing South Africa.”

It’s a belief reflected in one of Nando’s latest campaigns – the tongue-in-cheek ‘We can fix our s#*t’ campaign that’s typical of the provocative and thoughtful briefs they made their name on. This ad spares almost no one from a solid ribbing, but builds towards an uplifting end that recognises the nation’s resilience, and plays on our collective ability to laugh at ourselves. Thirty years on, and Nando’s are still having fun and changing lives: one restaurant, one advert, or one chicken at a time. l

CFO MAGAZINE • CFO.CO.ZA

GET SMART

Marble restaurant

Sibanye-Stillwater CFO Charl Keyter

Energy efficiency insights for CFOs from CFOs

CFO DINNER ENERGISES

BUSINESS LEADERS

CFO South Africa’s second CFO dinner at Marble restaurant gave CFOs the opportunity to swap notes on important issues around energy efficiency.

eading CFOs Charl Keyter, Mark Kathan, Glen Pearce, Neil Crafford-Lazarus and Wayne Koonin, joined by Deloitte leaders, were guests at the second CFO South Africa Dinner at Marble in Rosebank, where they shared their energy experiences over fine food and wine.

After the 2008 Eskom energy crisis, many businesses faced energy-efficiency challenges. Before then, energy had been relatively cheap and supply was constant, and so business leaders had to take drastic steps towards improved energy efficiency when the situation changed.

The discussion centred around whether energy efficiency is just fuzzy maths or a real value creator for businesses.

“It was a real wake up moment for us and in retrospect a blessing for our business as we had no choice but to get smart,” Sibanye-

CFO MAGAZINE • CFO.CO.ZA

Stillwater’s Charl Kater said, referencing the effect of the crisis on the Driefontein mine. Energy efficiency projects and initiatives make an enormous difference in the long term, he said. “Together with the 12L incentive, we’ve returned over R120 million to the business, not to mention the leap forward in our overall approach to efficiency. It’s not easy and often you have to push people towards these initiatives, including

Omnia CFO Wayne Koonin

them in their KPIs if necessary. But once people see the benefits of the efficiency initiatives to their own work and outcomes, it becomes second nature.” AECI’s Mark Kathan agreed with him, saying that leaders have to push the status quo, even if that makes them somewhat unpopular. “Allowing things to stay the same, especially on energy issues, will cripple our business really quickly,” he said. Omnia’s well-respected CFO Wayne Koonin had a fascinating perspective on the rate of change in technology, giving some very clear examples of how new technology has helped him and his team become increasingly efficient around energy consumption. Technological energy savings through vastly improved crushing technology also gave Sephaku’s newer plants outstanding competitiveness. “You have to keep investigating the new technologies, because what

was good and new just three years ago has often been improved or completely replaced. If you aren’t alive to this rate of change, you can very quickly lose your edge in the market,” Wayne said. The vastly experienced Neil Crafford-Lazarus (Sephaku) shared an example of how significantly improved crushing technology gave their newer plants outstanding competitiveness due to the energy savings that the technology brought them. “The long-term nature of plants often means you’re tinkering to keep up when a real investment to upgrade might well give you far more value. These are not just finance decisions – they are decisions which must be tied to your overall strategy and the culture,” he said. Mark and Glen Pearce agreed that together with energy efficiency they need exceptional engineering talent, operations, logistics, IT, HR and finance to “come together meaningfully”.

Deloitte’s Sebastian Carter

Glen stressed the value in measurement. “Sappi measures everything – you could say we’re a little obsessed. The truth is we make much better decisions when we have quality data and with good data you can often join the dots on opportunities that didn’t at first appear obvious. As an example, our drive to reduce consumption in our South African operations was matched by an overall view to managing waste, and we realised that waste in our business offered a chance to actually produce bio-energy. This seems really obvious today but getting to this point required us to have the ‘measure everything’ attitude.” The unequivocal conclusion regarding the role of government was that it was essential for the interaction between government and the private sector to nurture and develop insights and solutions around energy. All the CFOs had power independence on the agenda, expressing their concern with the current state of Eskom

CFO MAGAZINE • CFO.CO.ZA

GET SMART

Sephaku CFO Neil Crafford-Lazarus

and government bodies responsible for energy, though some agreed that total independence from the grid was unlikely, given the high demand of their industry. The frank and robust conversations made for a stimulating evening, and Graham Fehrsen, the MD of CFO South Africa, was delighted with the outcome. “CFOs don’t regularly get the chance to swap notes with their peers or industry leaders on important issues that impact their business and every CFO left this evening thanking us for the opportunity. We’ve done our work when we can create these platforms and CFOs leave with new insights or perspectives,” he said. Deloitte’s audit partner Sebastian Carter also had high praise for the dinner and the opportunity to network with finance leaders. “It was a most enjoyable dinner and a discussion which is globally relevant and shared by leaders of businesses which form the cornerstones of our economy.” l

CFO MAGAZINE • CFO.CO.ZA

KEY TAKEAWAYS FROM THE CFO DINNER The CFOs’ key takeaways from the evening were: 1. Don’t wait for a crisis before tackling the energy-efficiency challenge. 2. Start the energy-efficiency journey as soon as possible – big projects and small projects eventually snowball and become part of your DNA. 3. Find ways to keep up with the technology and ask whether you’re keeping up – the rate of change means you can no longer wait five or more years to check your position. 4. Partnerships are essential – from engineering to operations, HR and IT; finance must empower and drive the partner mentality. 5. Leaders need to push the organisation to change, even if it means making people uncomfortable or re-calibrating their KPIs.

BLE FO

P OI

ELI

WORK SMARTER, NOT HARDER 20 & 21 September 2018 | Cape Town 25 & 26 September 2018 | Johannesburg How will you benefit?

• Avoid information overload, procrastination and stress • Maximise your energy, concentration and motivation • Spend dramatically less time on email and distractions.

CFO.co.za/training

• Increase your personal productivity • Work smarter and faster with useful tools, software and apps

Why should you sign up your team? Do you want to achieve better results than you ever thought possible? Equip your team to be more productive without stress? Sign your team up for the ‘Work smarter not harder’ training and you’ll ensure they: save at least 20% of their time, avoid stress and trivial interruptions and rein in the continuous stream of emails, phone calls, social media and meetings.

Experience calm and oversight. Sign your team up today. Contact our training advisor on info@cfo.co.za or +27 11 083 7515.

GET SMART

The weight of the wait If you’re going to be late for a meeting, let the person waiting know. But if you’re the person waiting, there are a few things you can do to cope with the stress. By Lullu Krugel. Additional research by Maura Feddersen and Nina Kirsten, Economists at PwC’s Strategy&, the global strategy accounting team at PwC.

couple of weeks ago, while waiting for someone to show up for a meeting, I asked a question on social media: How long are you willing to wait for someone that you are meeting? The average seems to be ten minutes, no longer. There were a few more patient individuals, myself included, that were willing to make it fifteen minutes. However, what was also clear is that having to wait for someone who is late elicits powerful emotions. For most people, waiting for others running late feels like a waste of precious time. While in the age of smart phones we can usually let each other know if we are running late, sometimes things still go wrong. The psychology of waiting is more important here than the statistics of the wait itself. To understand why we respond strongly to having to wait for others, or being stood up, we can draw on insights from behavioural economics and queuing psychology. Luckily, there are also some damage control strategies we can adopt when having to wait for others, or when we are running late ourselves.

CFO MAGAZINE • CFO.CO.ZA

Why waiting drives us up the wall When arriving early for a meeting, we do not mind waiting until the scheduled time arrives. However, every additional minute after the scheduled time might feel like two. This is known as the ‘appointment syndrome’. Running late can happen to the best of us – then why do we find waiting for others so frustrating? Three cognitive characteristics help us understand our waiting behaviour as well as our annoyance:

The uncertainty of the wait The uncertainty of the wait is crucial

to driving our sense of frustration, according to insights from queueing psychology. Estimating the wait time and substantiating it through explanation can do a lot to make any wait feel finite and more reasonable. isney World has mastered the art D of queueing psychology and not only shares estimated wait times for rides with queuing visitors, but also deliberately overestimates

them. Visitors who are told their wait time is longer than it actually is are positively surprised when the queues move faster than expected. ur expectations therefore drive O how we feel about waiting. Beating expectations can lift our mood. If we know that the person we are meeting is generally ten minutes late and he or she arrives only five minutes after the scheduled time, we might almost feel delighted.

Sunk cost Sunk cost indicates the time, money or effort already dedicated to a task, which we cannot recover. Intensive preparations and an arduous journey to the meeting might convince us to wait longer than we would have otherwise. Else, what was the point of all the effort? Similarly, having already spent some time waiting for someone can lead us to wait even longer to avoid the feeling of losing our initial investment. We tend to avoid losses at all costs, although sometimes we are better served cutting our losses and moving on.

Social proofing Lastly, we often adopt the behaviours of others in an attempt to conform to a socially acceptable way of acting – a common characteristic termed social proofing. Through what we perceive as acting in a socially acceptable manner, we hope to avoid offending others. Plus, if everyone else is doing it, surely we cannot be faulted. As a result, we might wait longer or shorter periods, depending on how people around us might behave in this situation.

Waiting well The frustration that builds in us when having to wait for others can tarnish our personal and business relationships. There are some tips we can consider while waiting for others, or some damage control strategies to employ if we are running late ourselves. The bottom line is that occupied time feels shorter than unoccupied time. To quote philosopher William James, “Boredom results from being attentive to the passage of time itself”. Some organisations have taken this to heart: After numerous complaints from their passengers having to wait too long for their luggage to arrive at the carousel, an American airport extended the distance passengers had to walk from the plane to the carousel. Complaints dropped to almost zero, even though passengers were not saving any more time than before. Walking felt like productive time, while waiting did not. It just goes to show that while we are occupied, the passing of time does not feel as lengthy as it would otherwise. Therefore, in the instance where we find ourselves waiting for someone who is late, we can do something to keep us busy, like reading an article, listening to a podcast or attending to some admin.

Happy moments The final moments strongly influence our overall memory of the waiting experience. If a long wait ends on a happy note (the person arrives) we tend to look back on it positively, even if we

experienced negative emotions while waiting. However, if negative emotions dominate in the final minutes (the person never arrives), thinking back on the experience will skew our memory towards the negative outcome. This skewed memory might explain why people will queue for hours for a thrilling ride at a Disney Park or to taste the food at an acclaimed restaurant. Social interactions can improve our feelings about the waiting experience. To enhance the time we spend waiting, we can try to make conversation with the person at the table next to us, with the bartender, or receptionist – depending on the context. This might improve our overall experience and even end our waiting experience on a high note.

What to do if YOU are running late To battle the prospect of anxiety in the person waiting for you, it is best to set the right expectations and even overestimate the time it will take you to arrive at the meeting. Furthermore, it helps to explain why you are running late, as evidence suggests that explained waits feel shorter than unexplained waits. Effective expectation management is a great damage control strategy: prepare them for a longer wait and arrive before that threshold. It is important to keep the person in the loop. It is never advisable to tell someone ‘soon’. Telling someone you will be with them ‘soon’ is only a little better than telling them you will not meet with them at all. This is not what someone anxious to meet with you wants to hear. Uncertainty breeds nervous anticipation, combined with the feeling of powerlessness. It is therefore sensible to be specific with someone you have kept waiting, otherwise the wait time might feel like forever. So, when disaster strikes and you have to make others wait for you, you can employ the best that behavioural economics and queueing psychology have to offer to protect your relationships. l

CFO MAGAZINE • CFO.CO.ZA

ACCOUNTING

CAs with surprising careers in sports, cooking and small business share their stories

CAs who went their own way Some CAs don’t make a bee-line for the corporate world. Instead, with their credentials under their belts, they take an entirely different path to professional fulfilment and personal success. These CAs who’ve gone “their way” have interests ranging from cooking to sports to literature. We interviewed some of South Africa’s CAs who followed their non-finance dreams and have the accolades to show for it. By Georgina Guedes and Joël Roerig

NOT DROPPING ANY BALLS On the advice of his parents, Chris van Zyl went to Stellenbosch University to study accounting, and started playing rugby there as well. “I played in the Varsity Cup, which is the university’s flagship tournament and got a taste of the professional environment. As soon as I had a taste of that, I knew it was something I really enjoyed.”

“A professional rugby player needs to have massive amounts of self-discipline, and in the corporate world, it’s important to be a team player.”

He was due to start his articles in Johannesburg the next year, but realised he wanted to be a professional rugby player as well. He broke it to his parents, who were supportive but also concerned

CFO MAGAZINE • CFO.CO.ZA

about how he was going to do balance two demanding pursuits. “So I came up to Joburg, and continued to play very hard. I got involved in club rugby at Pirates Rugby Club and I was invited to join the Golden Lions. Deloitte were unbeliev-

able in supporting me and I had a great mentor in Gavin Comrie, who helped me to manage the whole process. Johan Ackerman at the Lions was also very accommodating. The important thing was not to drop the ball on either side, and to ensure that I was still giving the contracted time to Deloitte.”

Then, his rugby team wanted to step up his contract. So Chris decided to pause his SAICA contract, and get fully involved at the Lions. But about eight months in, he started to get anxious about his unfinished articles, so he asked Deloitte to take him back.

“They were once again very accommodating, but they couldn’t take me in Johannesburg, though they said they had capacity down in Cape Town.” He made contact with John Dobson, Western Province Currie Cup coach, who agreed to take him on, and in 2015, he moved down to Cape Town. In March 2016, he completed his articles at the Cape Town Deloitte office, again Chris says with the support of a great mentor, Zahid Bardien. Even so, he had new plans to keep himself busy off the field. “I decided that I would like to launch my own accounting and business support practice. I have so many friends in the entrepreneurial space, and everyone has great ideas and passion, but they don’t always have the governance and accounting control. So in May 2016, I registered Walworth Consulting, targeting SMEs and start-ups.”

In the meantime, his rugby career is still going strong. He was the Western Province Captain who inspired the team to victory in the 2017 Currie Cup, and has been a starting player for the Stormers for the past two years. He says there is a lot that he has learnt in rugby that he can apply in business, and vice versa. “There’s so much that coincides. A professional rugby player in today’s world needs to have massive amounts of self-discipline, and I think that in the corporate world, it’s important to be a team player. The training opportunities I’ve been getting in the rugby space have developed me as a leader and a person and I use that in the business space as well. And I am convinced that the stimulation I receive from running the business while playing rugby keeps me refreshed on both sides.”

CFO MAGAZINE • CFO.CO.ZA

“Our vision was to create a proudly South African lifestyle brand.” Lean and Roal Boezaart launched Freedom of Movement to forge their own destiny.

CA IN THE BAG “A girl had something to do with it…” says Lean Boezaart, of his move to Stellenbosch from Pretoria to complete his accounting studies. The move turned out to be well advised, because he’s now been happily married to that girl – Janina – for more than five years. After completing his honours, he moved to Cape Town to do his articles at Deloitte, but he’s always had interests outside of accountancy. “After completing my articles in 2011, I took a bit of a detour. I was a decent golfer back in the day so Deloitte sponsored me to play on the Sunshine Tour to chase a childhood dream of mine.” During his time as a professional golfer he also worked as a CA on flexi time for eight months at a corporate finance company, and then in 2013, he started a business with his brother Roal. “For us it’s always been a case of wanting to shape and create our own destiny,” he says. So, what sort of business does a qualified CA with a side interest in golf start with his engineer brother? Leather bags, apparently.

CFO MAGAZINE • CFO.CO.ZA

“Our vision was to create a proudly South African lifestyle brand, and from there we decided to start with leather as our core raw material. We have good quality leather in South Africa and it is known for its robust and timeless appeal.” They had no clue how to make a bag, so they hired Benjamin, an artisan from Port Elizabeth who worked in a big leather factory, to move his whole family to Stellenbosch. They worked out of a small room at the University, “with Benjamin, a very old leather stitching machine and a big dream.” They initially made only a few bags (it took about six months to get the concept right) then tested the product on their friends and connections in res at the university. The feedback was that leather products were definitely something that students wanted. And Freedom of Movement was born. Today, the company has expanded into a lifestyle brand with bricks-and-mortar outlets and an online presence, selling shoes and sunglasses as well as the original bags.

“We now employ 20 people, and a lot more through the local factories we use for shoes and leather bags. We have six stores and we’re opening our seventh and eighth in South Africa in September 2018. We also have a large online presence and a significant portion of our revenue is driven through our own online platform – www.freedomofmovement.co.za. We’ve also started exporting to Europe and Australia, and will continue to explore International opportunities going forward” Lean says. Lean’s CA qualification helps him to run the business, even though Freedom of Movement has its own accounting team. “My role is a lot more strategic, but I can oversee and understand the numbers, and do the required high-level forecasting and cashflow management.” He says that Freedom of Movement is his career, and he believes he’ll always want to do his own thing. “I’m not completely against the idea of working as a CA, but I probably wouldn’t go back into the corporate world in a financial role.”

THE FINE ART OF BALANCE “Despite your circumstances, you always have choices.” That’s Annah Watkinson’s mantra, which has helped carry her to professional and sporting success, even after her tumultuous upbringing. Her mother was a drug addict, and she was raised by her divorced grandmother, who did her best in less-than-ideal circumstances. Annah had friends whose parents were chartered accountants, and their lives seemed steady, which was what Annah wanted. Since she was good at maths, she decided that accountancy was her future.

incredible sense of achievement. I couldn’t believe my body had carried me for 21km.” Thus converted, Annah started running every weekend. She met a guy in a running group, and they started dating. He was very keen on triathlons, and with his encouragement, she signed up for the Ironman 70.3 South Africa in East London. After she crossed the finish line, her boyfriend told her that she’d beaten him. And that, she

SA 2015: “When are you going to turn pro, after tomorrow you are just going to be the age grouper in South Africa to beat. I think you should turn pro.” She won in her age group and got her slot to go to Ironman World Championship in Kailua-Kona in Hawaii, the home of Ironman. She told herself that if she won in her age group there, she would go professional, but she came third. Although she was disappointed, she thought very deeply about it and talked to a lot of people, and decided to take the plunge.

“One hour, I’ll be in the office doing my office thing and then the next hour I’m in lycra flying down the highway on a time-trial bike”

She graduated from the UJ (then RAU) with a PwC bursary and then did her articles at PwC. She then opted to work for Absa, ultimately ending up as head of Global Finance for the Coastal Regions. During that time, she also completed her CFA, because she wanted to continue learning. But this story isn’t about her finance work, it’s about something that started when she was on secondment in New York with PwC. “I took the opportunity to travel a lot within the States while I was there exploring the country, partying and seeing concerts, and although I had always been a gym person, I gained a bit of weight having all that fun,” she recalls.

She decided to take up running and loved it – even though she was running mostly on a treadmill in the New York winter. She carried on when she got back to South Africa, and a friend suggested she try a 21km road race that goes up and over Northcliff Hill. “I thought to myself no way, but I did it. And when I got to the end, running on to that field, I just had the most

says, was the beginning of the end of their relationship. But it was the beginning of a new love affair for Annah. In 2012, she went back to the race, and won in her group. She found a training partner to support her in her mission to push it to the extreme, resulting in a great race, winning in her age group. She went on to the Ironman 70.3 World Championships in Las Vegas, but was “over-confident and under-prepared”. “I had a terrible race. The international level was very tough.” After breaking her collar bone and shattering eight bones in her wrist at the 94.7 cycle race, she had to miss the 70.3 in 2013, and aimed instead for Ironman, five weeks later. She took it conservatively, which meant that when she hit the 28km marker, where people usually start to suffer, she was strong for the end of the race. She ended up winning in her age group in Port Elizabeth. So, she signed up with a coach Raynard Tissink, who said to her the night before Ironman

She had a “phenomenal” first professional year in 2016, coming second at Ironman Lake Placid and third at Ironman Barcelona. But then 2017 proved to be a tough year. She moved to Cape Town for her current banking role, and found the demands of the move and establishing a new ecosystem, coupled with travelling around the world and racing against the best, to be challenging. Then, at the close of the season in Taiwan, she tore her calf on the bike. But forever aiming to top her personal best, she’s back in the game in 2018. “I’ve had some OK races and some not great races, but I am feeling more positive,” she says. She has become adept at balancing all the demands on her. She works seven days a week to juggle both her athletic and corporate career. She’s even been in race briefings and on conference calls simultaneously. “One hour, I’ll be in the office doing my office thing and then the next hour I’m in lycra flying down the highway on a time-trial bike. I feel like a superhero, living a dual life!”

CFO MAGAZINE • CFO.CO.ZA

ACCOUNTING

COOKING – BUT NOT THE BOOKS After matric, Avhaathu Ntsho signed up for a three-year diploma called Financial Information Systems at Pretoria Tech. She completed the course, but realised in the process that her interest lay in finance, not computers, so she applied to UJ (then RAU) to covert her diploma into an undergraduate degree. “From day one of being at RAU, I felt that I belonged. I felt like I had found my calling. It was so different from being at technicon, where we focused on practical stuff without understanding why we were doing it,” she says. After two years at RAU – the bridging course and an honours year – she joined PwC to complete her articles. “I enjoyed my time. PwC was great and I had nice exposure to listed clients, but auditing wasn’t really for me,” she says. She then joined Standard Bank, which had a programme for newly qualified women CAs, and was exposed to various aspects of banking and finance within Investment Banking. She ended up in Business Banking, which is where she says the magic really happened for her. “I was working with people that were starting businesses in a deal-making role, funding investor transactions, looking at whether the entrepreneurs were going to be able to repay the bank. I was fascinated by it all,” she recalls. Even so, she left Standard Bank and moved on to a property company, but when that didn’t work out she took the surprise decision to sign up with the Prue Leith Chefs Academy, and ventured into the kitchen as a junior sous chef. “I blame it on having babies,” she says. “When I had my first baby in 2011, I became very domesticated. I watched 74

CFO MAGAZINE • CFO.CO.ZA

a lot of Food Network and started to experiment in the kitchen.” When she fell pregnant again in 2013, she says she’d had a sudden urge to be in business. So she bought herself a vending machine business. “I was literally pushing a trolley with stock, while also pushing a belly in front of me.” And then, when her third child came along in 2016, she felt an urgent desire to be creative. “I was sure I wasn’t just meant to be an accountant, so I thought why not give this chef thing a go?” She had planned to go into the restaurant business in Joburg, but her husband was offered a job in East London, so last year, she packed up her family and moved down to the Eastern Cape. “I had done all my planning for Joburg, and all of a sudden, I was in a new environment, and I didn’t think that the same thing would work down here,” she says. Now, while she’s settling down and getting to know the lay of the land,

“I bring more to the table than someone who is just a chef, because it’s not just about the food.” she’s working for herself as an accountant again. She has also created a blog, accountantinthekitchen. co.za, where she shares her journey from the office to the kitchen, her love of food, personal finance tips and reviews of restaurants in East London. She believes that her accounting background will make her a better chef and restaurant owner. “Most restaurants go out of business because the owners don’t understand the finance side of the equation. If you want to be a chef, you need to be creative, but you also need to understand finances like recipe costing and food waste, and the impact that will have on the business. I bring more to the table than someone who is just a chef, because it’s not just about the food.”

SAâ&#x20AC;&#x2122;s best Financial Modelling Courses

CFO.co.za/Training

Financial modelling fundamentals is a three-day, entry level course that focuses on the core principles essential to building efficient, effective financial models. What this course offers: - Tailored to meet the modelling needs of all aspiring financial modellers; - An in-depth understanding of engineering â&#x20AC;&#x201C; all essential Excel functions and techniques for financial modelling success; - Distilling the key elements of the business case; - Best practice modeling methodology, structure, process and sequence; - Experience in building a complex model from first principles; - Analysis of the model output â&#x20AC;&#x201C; understanding the insight; - Model output analysis consisting of returns and ratios, sensitivity analysis, scenarios, data tables; - Finalising and protecting the model.

4 Day Advanced Financial Modelling for Investment Evaluation - 20 August 2018 4 Day Financial Modelling Masterclass - 23 August 2018 3 Day Financial Modelling Fundamentals - 13 September 2018 4 Day Project Financial Modelling Masterclass - 17 September 2018

ACCOUNTING

PHYSICAL STRENGTH DRIVES MENTAL STRENGTH “Sports like powerlifting are good for your brain, as your brain will receive a bit more blood and oxygen when you exercise,” says Mariska Casey, who was recently crowned world champion powerlifting in the weight class below 47kg in the masters 1 category (40-49 years of age). “It is is also important for CFOs, because if you are fitter, you can think clearer and deal better with stress and crunch times like month end.” The diminutive lightweight who hails from Ermelo in Mpumalanga talks about what it takes to be a CFO on a daily basis, as she lectures her accounting students at the University of Johannesburg (UJ). After a CA career at KPMG, FNB and Investec, she moved back to ‘her’ university in 2009 and hasn’t looked back. “I teach financial management: long-term decision making, capital budgeting, looking forward into the future and tying that in with entrepreneurship. It is what I love,” says Mariska, who also serves as a pre-issuance reviewer

CFO MAGAZINE • CFO.CO.ZA

for the Auditor-General and is a member of various audit committees of the Limpopo provincial government. That she loved powerlifting, she only found out six years ago, at the age of 35. That she was incredibly good at it, she found out only a little bit later. “My husband started going to the gym and I saw he was losing weight rapidly. I thought ‘I want to look good in front of my class’ and started going as well. It has been quite amazing to discover a hidden talent like that. I saw myself as a nerdy individual who wanted to be a ballerina. I never knew I was so strong. Being a strong woman has been very empowering. And physical strength drives mental strength.” Powerlifting is a strength sport that consists of three attempts at maximal weight on three lifts: squat, bench press and deadlift. Once Mariska realised her talent, she went for it and started a Spartan training ritual under coach Rodney Anthony, globally recognised as one of the best in the business. “A small percentage is

talent, but a lot of work goes into it. For my 40th birthday, I just ate a few strawberries, as weight management is crucial,” says Mariska with a smile. “That feeling of winning for your country is great and singing the national anthem is fabulous,” says Mariska, who professionally also used her maiden name McKenzie. “It also made me realise how blessed I am, with many people in South Africa, 12,000km from Calgary where the tournament was held, staying up until 2am to watch me perform, as the tournament was streamed over the internet. It was a ‘wow’ moment.” Mariska says she hasn’t encountered any raised eyebrows at UJ for the time she commits to powerlifting. “On the contrary, everyone, including Prof Ben Marx, have been very accommodating. As a member of TeamSA, I get 15 days sports leave every year and my colleagues are happy to fill in for me when I am away,” says Mariska, who calls her powerful talent her Godgiven “lucky packet”. l

ACCOUNTING

CFO MAGAZINE â&#x20AC;¢ CFO.CO.ZA

FORGING A PATH A journey with many twists and turns makes the ride – and the wins – all the sweeter for keen mountain biker and Deloitte finance transformation expert Carryn Tennent.

inance transformation is more than ‘moving the furniture around’ or installing tools that streamline processes – it’s an imperative for the contemporary finance function, and inherently strategic. For Carryn Tennent, director for consulting and finance transformation lead for Deloitte Africa, a fortuitous exposure to this transformation process almost two decades ago unlocked not only a new career direction, but also a deep passion for the power of finance as a function in a business.

Following her first taste of large scale-finance transformation, together with a few partners, Carryn played a critical role in building a successful niche consultancy, focused on enterprise performance management and finance transformation that was ultimately acquired by Deloitte UK. She returned to South Africa in 2012, still within the Deloitte fold, to lead the finance

transformation market offering and consulting capabilities within the African market. “Deloitte is recognised globally as number one in finance transformation, which we are very proud of. I believe this is because we offer a full breadth and depth of capability – from setting the finance strategy through to operational excellence, enabling technologies (including robotics and cognitive) and the all-important delivery capability to achieve sustainable impact. It is exciting to be able to walk with the CFO and their team through their full journey, particularly now in a digitally disrupted world.” The potential is huge – and even more so on the African continent. Rather than focusing on challenges, Carryn prefers to see opportunities – especially where outdated legacy systems still abound. In her view, outdated systems or underinvestment in technologies are opportunities to

leapfrog and make bold strides to a better finance future. It is a worldview that might just be informed by Carryn’s other great passions: mountain biking and being a mom. Both of these seem like natural metaphors for finance in a digital world: navigating a winding path towards an unknown but bright future, leaping obstacles, and raising your game to meet ever-greater challenges.

Navigating the turns Having spent 17 years working in the space of finance transformation, Carryn has seen a significant shift in the role of the CFO and finance: “Working with CFOs in the Deloitte Executive Lab provides real insights on these changes and the impact this is having, which differs across industries. At the macro level, while finance needs to continue to be the safe pair of hands at the rudder, it also needs to create value for the organisa-

CFO MAGAZINE • CFO.CO.ZA

ACCOUNTING

tion through their role as a strategist and catalyst – an important partnership with the CEO to shape the direction and the performance of the business,” Carryn explains. “The day of the strictly technical CFO, I think, is going to fade away. We already see many CFOs who also hold the title of COO, president or something else (such as the emergence of the chief performance officer role). "'Real time’ is where finance is headed: By 2025 there won’t be a need for a monthly or quarterly close process in my opinion; financials will be closed in real time.” Along with the role of the CFO we are also seeing significant change in the profile of finance leaders, she argues. “A qualified accountant is no longer the starting point and the role calls for ever-growing commercial acumen, business exposure and an ability to handle large amounts of data.” This is why Carryn believes that CFOs need to start recruiting a different team profile and managing the talent journey differently to embrace the new role of finance. “We will see traditional finance teams augmented with data scientists, cyber experts, forensics, business analysts, technical specialists.”

“‘Real time’ is where finance is headed: By 2025 there won’t be a need for a monthly or quarterly close process in my opinion; financials will be closed in real time.” Consequently, she says, we are also seeing a shift in the number of CFOs who go on to take the CEO role – given the pace of change and near constant volatility that seems to be the new normal in business in the digital age. “You need an inherent understanding of financial insights to underpin the rapid decisions that need to be taken in business today, so the people who are thriving these days tend to come from a finance leadership role. This is an immense opportunity for finance, which has traditionally not been the hero of the business story. Today, the CFO is absolutely at the forefront, right alongside the CEO at the helm.”

Driven by thought, powered by tech There is currently a large focus on digital disruption 80

CFO MAGAZINE • CFO.CO.ZA

across industries and this is just as true for finance. In responding to the ‘new normal’, Carryn says, finance must embrace digital and technologies to rise to this challenge: “It is no longer a differentiator but an urgent need.” Carryn cautions against the idea of developing a digital strategy – “there’s no such thing”, she says. “A transformed finance function needs to have clarity on how they add value within the broader business strategy and then how digital enables this. “But importantly, ‘Are you thinking about the next horizon?’” she asks. “If you’re currently behind on automation and on adopting cloud technologies, you’re going to fall even further behind as digital leaders move into AI.” “We are seeing that any organisations have embarked upon their robotic process automation (RPA) journey. Deloitte have seen how companies have already achieved either moderate or substantial benefits from their work with these technologies. “RPA delivers value for business leaders, with payback reported at less than 12 months, with an average 20 percent of fulltime equivalent (FTE) capacity provided by robots.” Still scaling RPA is proving more difficult than anticipated, according to Carryn. The key challenges for those who had implemented and scaled RPA that they typically see include: l Process standardisation l IT buy-in and support l Integration and flexibility of solution l Stakeholder buy-in and expectations l Employee impact. “In terms of the broader digital environment, cognitive technologies are still maturing. The vendor landscape is fragmented and there is still a shortage of talent. Integration with existing systems remains a principal challenge.” Being surrounded by smart technologies does keep it fresh for Carryn. “If I had described today’s workplace to you 15 years ago – using visualised, continuous daily performance management with cognitive analytics running your forecasting, automated processes, paperless finance run by robots with no month end – people would have thought I was stark raving mad. So to have access to that, and to be immersed in the world of these disruptive tools that are becoming ever more accessible and affordable… I absolutely love what I do,” she says. l

Crunch Time IV | Blockchain for Finance Business blockchains are being used today to help reinvent how transactions are managed. They can take time and costs out of almost any process, enabling near real-time operations. They deliver a high degree of accuracy and control, with much less risk than many alternatives. Blockchain has the potential to reshape processes that are defined inside finance, primarily because of its cost and control benefits. Even more interesting, is the impact on broader business processes that intersect with finance such as supply chain management. For more information please contact Carryn Tennent, Finance Transformation Leader, ctennent@deloitte.co.za. www.deloitte.com/za

FROM THE MD

Collaborate and adapt – your future might depend on it Three engagements this year have significantly impacted my perspective and understanding of the future of the accounting profession. I am no accounting expert, nor do I claim to have a clear horizon on the profession, but each of these moments gave me a chance to reflect on whether AI and machines will replace or supplement human beings in the finance and accounting world.

The CFO who said “It’s far away” I sat down with a top CFO recently, one with a lifetime of success and top jobs behind him. When I asked about what impact AI and robotics might have on the profession this CFO said: “I don’t see a significant impact in accounting or auditing for some time still.” I was a little surprised given other interactions with CFOs who were busy with significant projects in this area. This CFO is entering the last third of their career and is trusted by shareholders, boards, employees and customers to lead the organisation forward every day. Executives might be getting younger but we still don’t see many people leading the largest organisations during the first third of their career so this “last third” group of people remain important.

The auditor who said “We have to embrace the technology” My next opportunity to further my understanding of the accounting profession came through a meeting with an audit executive inside one of South Africa’s most exemplary and successful entrepreneurial businesses. Through a combination of circumstance, “Ah ha!” moments and surroundings, she has launched a bot that is certain to change the auditing landscape. “A number of people followed me when I took this role and I felt a sense of responsibility. I was at a Singularity event when the idea really came together that I simply had to embrace tech for my team to have a viable future as auditors – robot-building auditors!” she says. 82

CFO MAGAZINE • CFO.CO.ZA

This executive has reached the mid-point of a 30-year career and has a clear desire to embrace newness and adapt. In a sense, her professional survival depends on it and although it’s clear the technology is doing some of the work, the drive of this group of “middle third” careerists is still important to business.

The educators who said “there must be a better way” Then, I met two educators who passionately and separately declared their commitment to finding a better way to educate young people to navigate the world of work they will be entering. “These kids face a completely new world where their education will have to prepare them not just to think, as schools have traditionally done, but to do and to collaborate.” The last point was emphasised by both educators and when asked why, both suggested that the key to success in an increasingly complex and dynamic future working environment will be the ability to keep learning and collaborate. For as long as people continue to enter the workplace, this group of “first third” careerists will be important to the success of organisations for their fearlessness and connection to technology. While I don’t see accountants losing their relevance, I firmly believe that their future value will depend on how they accelerate their ability to collaborate and adapt. Graham Fehrsen gfehrsen@cfo.co.za +27 79 898 0227

The preferred community of

SAâ&#x20AC;&#x2122;s leading CFOs 17 July 2018 CFO Day - Marble, JHB (limited seats) 3 & 4 October 2018 Finance Indaba Africa - Sandton Convention Centre, JHB 8 November 2018 CFO Summit 3 - JHB

Book your seat today

CFO.co.za | CFODay.co.za | finance-indaba.co.za

The C-suite is singing a new tune. Whether you’re a midsize business or a Fortune 50® enterprise, a finance and HR system from Workday just works, as planned and as promised. And that sounds pretty great.

www.workday.co.za