CFO Magazine 2017 - 3rd issue

MAG AZINE FOR FINANCE PROFESSIONALS IN SOUTH AFRICA 3 • 2017 CFO.CO.ZA

Stan. Vusi. Martijn.

World-renowned speakers on #findaba17 stage Arno Daehnke FD Standard Bank Outside the box Nishlan Samujh CFO Investec The next big thing

Deloitte’s Sihlalo Jordan CFOs should be a leading voice The art of acquisition Insights from CFOs of Telkom and Omnia

Nonkululeko Dlamini CFO IDC Uplift and empower

BUILD A BETTER FUTURE

Finance Indaba Africa 12 & 13 October 2017

Public sector CFO of the Year 2017

Ramasela Ganda Serving the nation

Independently owned private hospital group Busamed, continues to transform the South African health sector by providing more accessible, world-class healthcare. When they wanted to grow by acquiring Hillcrest and Gateway hospitals, they realised that they would need an innovative advisory and financing solution, tailored to their unique needs. As sole investment bank, we matched our expertise with their ambition, enabling them to expand their footprint and continue their journey of success. Let us be your partner for growth on this continent we call home. standardbank.com/CIB

Corporate and Investment Banking Authorised financial services and registered credit provider (NCRCP15).

The Standard Bank of South Africa Limited (Reg. No. 1962/000738/06). Moving Forward is a trademark of The Standard Bank of South Africa Limited. SBSA 262626 07/17.

“How do we fulfil our vision of transforming healthcare?”

“With expertise and precision.”

R1.7 Billion Transaction Investment Bank > Financial Advisor > Structuring Advisor > Equity Financing > Asset Financing

FROM THE EDITOR IN CHIEF

Making a difference

Y

ou can make a difference. If that sounds to you like something a Miss World contestant would blurt out, then this issue of CFO Magazine will challenge your cynicism. If it sounds to you like sugar-coated PR speak covering up for money-grabbing corporates and corrupt governments, you can consider the next 80 pages a personal truth-AND-dare: what are YOU doing to build a better future?

“Somebody has to work for the people. Somebody needs to rise up. Who is it going to be? What kind of country do we want to live in?” In our cover story (page 24), award-winning CFO Ramasela Ganda speaks about serving the nation and choosing achievements over bonuses. You can read the story of her transformational tenure in Ekurhuleni as a passionate plea for public sector duty.

Businesses also have an enormous opportunity to make a difference, argues Standard Bank FD Arno Daehnke in a wide-ranging interview about the bank’s drive to become more future-focused and client-centric (page 14). Another banker, Investec CFO Nishlan Samujh, reflects on the technological revolution and the need for South African talent to become problem-solvers (page 36).

Because the times are a-changin’... It’s the end of the world as we know it, as the establishment is being challenged by new firms like Nkonki (page 48), new technology like ThisIsMe’s nifty verification software (page 52) and new stock exchanges like ZAR X (page 58).

Acquisitions, like recently at Telkom (page

4

CFO MAGAZINE • CFO.CO.ZA

72) and Omnia (page 80), are also shaping new realities.

All of this urgently requires us to rethink our education system, says the former Telkom and FirstRand CEO Sizwe Nxasana (page 34), while world-of-work expert Raymond de Villiers outlines eight elements all future-proof business plans should contain (page 41), and global culture guru Stan Slap (page 44) explains why professionals should aspire to do GREAT things.

Stan will be a keynote speaker at Finance Indaba Africa 2017 on 12 and 13 October, while Ramasela, Nishlan and visionaries like Martijn Aslander, Vusi Thembekwayo and the country’s first black female CA, Nonkululeko Gobodo, are also preparing incisive contributions for the biggest finance expo in Africa (see page 32). The theme ‘Build a better future’ is the inspiration for this magazine. With the richness of insights, tools and tips on offer at #findaba17, it is obvious that finance professionals who want to make a difference cannot afford to miss this event.

It is the CFO who has to be “the leading voice” in a world of change, says Sihlalo Jordan (page 55), deputy chief executive at Deloitte Africa, reflecting on finance leaders’ responsibility to promote an aligned strategy, future-focused technology and shining integrity. In a remarkable double-interview (page 66), IDC CFO Nonkululeko Dlamini and ‘her’ financial manager Nozibele Tshobeni explore the role of mentorship, the most intimate and perhaps most effective way to make a difference and build a better future.

BUILD A BETTER FUTURE Finance Indaba Africa is the biggest annual expo and Build the future alongside expert speakers, trail blazers, conference for finance professionals. Network, learn and South Africa’s leading CFOs, a special FinTech arena and build your career with 5 000 of your peers from different world-class entertainment. industries.

Martijn Aslander, Vusi Thembekwayo, Nonkululeko Gobodo, Nishlan Samujh, Stan Slap and many more.

Register for free: www.finance-indaba.co.za/register | Graham Fehrsen (gfehrsen@cfo.co.za) +27 79 898 0227

TABLE OF CONTENTS Arno Daehnke

Sihlalo Jordan

“High return on equity is one thing,” says Standard Bank FD Arno Daehnke, "but with R2 trillion of assets the bank can really make a difference in people’s lives and the economies in which we operate.” A conversation with one of South Africa’s best seismologists, who is now guiding Standard Bank’s brave new world.

CFOs should champion the rise of disruptive technologies within their organisations, says Sihlalo Jordan, deputy chief executive at Deloitte Africa. He chatted to CFO Magazine about finance leaders’ responsibility to promote an aligned strategy, future-focused technology, and shining integrity. “The CFO has to be a leading voice.”

24 Ramasela Ganda

14

At the 2017 CFO Awards, Ramasela won the Public Sector CFO of the Year Award for her incredible accomplishments at Ekurhuleni Municipality. She dedicated the prize to “all public servants that serve us diligently and with honesty”. We spoke to her about her rise-and-rise, her move to Barloworld and her passion for serving the nation.

CFO South Africa is the organisation for finance exec-

MANAGING DIRECTOR

utives in South Africa. Our goal is to connect finance

Graham Fehrsen

professionals online and off in order to share knowledge,

gfehrsen@cfo.co.za

EDITOR IN CHIEF

exchange interests and open up business opportunities.

+27 (0)79 898 0227

Joël Roerig

CFO South Africa

Johannesburg

HEAD OF OPERATIONS

CFO Enterprises PTY ltd

South Africa

Sarah Chalmers

33 Impala Road

+27 (0)11 083 7515

schalmers@cfo.co.za

SENIOR EDITORS

Motylska, Raymond de

Chislehurston 2196

CFO.co.za

+27 (0)82 570 9482

Toni Muir

Villiers, Sungula Nkabinde,

tmuir@cfo.co.za

William Smook

+27 (0)82 570 9482

PHOTOGRAPHY Patrick Furter, Liezel Badenhorst

jroerig@cfo.co.za

OTHER CONTRIBUTORS

+27 (0)76 371 2856

Dianne Tipping-Woods, Georgina Guedes, Iga

© 2017 CFO Enterprises PTY Ltd. All rights reserved. No

MARKETING MANAGER

part of this publication may be reproduced, distributed or

Judith Kamffer

transmitted in any form or by any means, including pho-

jkamffer@cfo.co.za

Ebrahim Moolla

Novus Holdings

tocopying, recording, or other electronic or mechanical

+27 (0)82 859 1245

emoolla@cfo.co.za

coenraad.pretorius@

+27 (0)79 506 4840

novus.holdings

methods, without the prior written permission of the pub-

6

55

+27 (0)82 908 8687 PRINTING

lisher, except in the case of brief quotations embodied

HEAD OF SALES

in critical reviews and certain other noncommercial uses

Ashik Ramkelawan

DESIGN

permitted by copyright law.

aramkelawan@cfo.co.za

Cor Lesterhuis

CFO MAGAZINE • CFO.CO.ZA

+27 (0)11 201 3460

TABLE OF CONTENTS Leadership 20 From Benoni to Boeings: CFO Comair 22 Operating at the coalface: July’s CFO Summit

Build a better future 32 #findaba17: two days of inspiration 34 Rethinking education: Sizwe Nxasana

20

36 Investec CFO Nishlan Samujh talks

36

career, tech and the future 41 Future-proofing your business model 44 Stan Slap: Indaba keynote + culture guru

59

Governance 48 Nkonki, the firm of the future 52 The compliance opportunity: insight from ThisIsMe founder David Thomas 58 ZAR X: taking stock

Empowerment 64 The elephant in the boardroom 66 Uplift and empower: an interview with mentor and mentee 70 CFO SA’s Women’s dinner report

Growth 72 Interview: Telkom’s BCX acquisition 76 Optimising versus cutting costs 78 The Great Annual Assistants’ Breakfast 80 Interview: Omnia CFO Wayne Koonin

And further 04 From the Editor in Chief: making a difference 08 CFO Awards 2018: nominations open

66

72

10 From the MD: lessons for the future 11 On the move: new CFO appointments 83 Membership CFO South Africa CFO MAGAZINE • CFO.CO.ZA

7

CFO AWARDS

MMI deputy CEO Mary Vilakazi joins judging panel

Shortlisting South Africa’s best CFOs Who are the best finance executives of the moment?

Which CFO or FD has been a catalyst for spectacular results, guided an organisation through testing times or has made a crucial difference in any other way? CFO South Africa will again be celebrating the best of best at the annual CFO Awards on 10 May 2018 – and we are calling on the finance community to submit nominations.

Aarti Takoordeen, CFO of JSE Limited, Winner Young CFO of the Year 2014 Deon Viljoen, Group CFO Alexander Forbes, Winner CFO of the Year 2015 Ben Marx, Head of Accounting Department of the University of Johannesburg Brett Tromp, CFO of Discovery Health, Winner Young CFO of the Year 2015 & High Performance Team Award 2015 Carel Smit, Executive Committee member of KPMG Christo Els, Senior Partner of Webber Wentzel Claudelle von Eck, CEO of The Institute of Internal Auditors South Africa

I

n 2018, the panel of judges will be joined by Mary Vilakazi, a former CFO Awards nominee who was recently promoted from CFO to deputy CEO at MMI Holdings.

The panel convened on 4 September during a dinner at the Saxon Boutique Hotel to discuss the process and criteria for next year’s CFO Awards. With businesses feeling the heat of public scrutiny, the panel agreed that the role of the CFO is more crucial and pivotal than ever.

After all nominations have been gathered, up to 30 finance executives will be shortlisted to go through a thorough interview process with the judging panel.

Nominations for the 2018 CFO Awards can be submitted to Graham Fehrsen at gfehrsen@ cfo.co.za until 31 October 2017.

8

PANEL OF JUDGES

CFO MAGAZINE • CFO.CO.ZA

"It's rewarding to interview and judge these highly professional CFOs. It's wonderful to see how the awards have grown and really become the face and prominence of the CFO in South Africa," said UJ professor Ben Marx, who has been part of the CFO Awards since its inception in 2014. Besides the important recognition for finance leaders, the event itself has also become the highlight on the annual CFO calendar. "It is important for CFOs to network because in that way they exchange views, they share experiences and they also learn from each other,” says Wiseman Nkuhlu, Chancellor of the University of Pretoria, who joined the judging panel in 2016.

Visit CFOAwards.co.za for more information.

David Fine, Partner at McKinsey South Africa Kevin Black, Africa Clients & Industries Leader, Deloitte.

Leon Crouse, Former CFO of Vodacom and Remgro and winner of a CFO Lifetime Achievement Award Mary Vilakazi, Deputy CEO MMI Holdings Sneha Sanghrajka Shah, Managing Director Africa of Thomson Reuters Simon Ridley, Non-executive Director at Standard Bank, Winner CFO of the Year 2014 Victor Sekese, CEO of SizweNtsalubaGobodo Wiseman Nkuhlu, Chancellor of the University of Pretoria

Book your seat for the 2018 CFO Awards today

Meet 450 CFOs, share knowledge and boost your business 10 May 2018 | Johannesburg | CFOAwards.co.za

Buy a table, sponsor an award.

Attendance is free of charge for Platinum, Corporate and Board Advisor Members.

CFOAwards.co.za | +27 (0)11 083 7515

Nishlan Samujh, Group CFO Investec accepting the 2017 Compliance and Governance Award

FROM THE MD

Five lessons for a better future

T

hrough the course of a tumultuous 365 days since the launch of the inaugural and extremely successful Finance Indaba Africa, I’ve been fortunate enough to learn alongside finance leaders and exceptional professionals. I’ve learned some great lessons along the way. In keeping with our theme for the 2017 Finance Indaba Africa, Build a better future, I am sharing some of the lessons that resonated for me. Of course, some are familiar cliches and almost all would seem like common sense, but in my experience it’s the obvious and common sense advice that is often hardest to live by.

1. The elephant in the room You need to deal with the elephant in the room. That thing everyone knows and feels but few say, or want to talk about, is the challenge or issue you must address immediately. Whether you deal with it as slowly as a parliamentary enquiry or as fast as a Caster Semenya record, you must have a process in mind and tackle it deliberately.

2. Who not what No matter what you want to accomplish, you still need to work with people. We face increasingly smart technology, but human beings still dominate workplaces, and so who you are and how you treat people significantly sways the outcome of your work.

Interestingly, when asked about how to choose between providers, CFOs discreetly but overwhelmingly recommend that leaders should work with people they trust, not necessarily with a specific brand.

3. Know your why Having some sense of why you do what 10

CFO MAGAZINE • CFO.CO.ZA

you do can power your efforts exponentially. Whether it’s for your family, because you believe in your business or simply for the opportunities your pay cheque provides, your why is one of the most powerful tools at your disposal.

4. Be present Focus on Zen. In a world where we never switch off and where the demands of our jobs and lives are omnipresent, the only way you can ever strike a balance and keep up is to practice being present.

A CFO I hold in high regard shared this insight as her secret to ensuring she pursued her career ambitions and balanced the desire to be a great mother and wife.

It might sound easier than it is, but those who learn to be truly present find they’re able to create great value in every activity without losing energy and attention to either the past or the future. CFOs that are succeeding have Zen-like qualities.

5. The pursuit of excellence Realise that you can only ever pursue excellence not perfection. Be sure of what goals you’re pursuing and set the bar high, but don’t let the failure to achieve perfection be an impediment to your efforts.

Help others celebrate the effort of getting close to the goal and be relentless in measuring your own efforts.

I hope that some of these lessons are helpful to you as you navigate your career during challenging times. I look forward to seeing you at the Finance Indaba Africa on 12 and 13 October. With an incredible range of opportunities to learn among peers and industry leaders at the event, I am sure we’ll be able to add many lessons to this list.

APPOINTMENTS New CFOs for Cell C, Kumba and Afrox

On the move The surprise move from Tyrone Soondarjee to Cell C was one of the most notable CFO appointments of the last few months. The finance stalwart had earlier announced his retirement at Sasfin Group, where CFO Awards 2017 nominee Lushen Pather is currently in charge of finance as acting CFO. Banking (CIB) Global Market at Standard Bank, a role she has already been acting in for 12 months. Bulelwa’s career has come full circle after starting at Standard Bank, but moving to MMI as the CFO of the Rewards Programme in 2014.

n an interview as far back as 2014, Tyrone spoke about his support for CFO South Africa’s events. “Interacting with other CFOs is important,” he said. “It is the best way to keep abreast of what is a constantly-evolving profession.” At Cell C, Tyrone will be taking over the reigns from Robert Pasley, who will return to his original role as chief strategy officer.

A much-anticipated appointment came at Kumba Iron Ore, which was looking for a new CFO since Frikkie Kotzee resigned earlier this year. The job went to Bothwell Mazarura, who had been working as CFO at Wescoal Holdings Limited, a company he joined after holding various senior financial roles at Lonmin since 2010. “His extensive knowledge and experience make him an ideal fit. With a track record of working across a broad range of sectors, he is a welcome addition to the team and I look forward to working with him,” said Kumba CEO Themba Mkhwanazi.

Another banking executive, Bulelwa Mdlophane, was recently appointed as CFO for Corporate and Investment

Abigail Mukhuba has been promoted to Group FD at African Rainbow Minerals, effective 11 December 2017. Abigail is cur-

Tyrone Soondarjee

I

rently CFO, a function that reports to the FD at ARM. She will replace Mike Arnold, who reached ARM’s retirement age of 60 in July. Mike will remain on the ARM board of directors as a non-executive director and will also provide consulting services to the company.

JSE-listed African Oxygen (Afrox) appointed Matthias Vogt as its new CFO and executive director. Matthias joined Afrox as finance GM in July 2015, and has held several senior finance positions within Linde Group, Afrox’s holding company, since 2010. He replaces outgoing CFO Dorian Devers.

Senele Mbatha was promoted to CFO of American International Group Inc (AIG), a leading global insurance organisation. Mbatha, a CA, has held several senior positions at AIG, the most recent of which was that of regulatory controller for Africa, which saw him looking after the full finance function of South Africa, Kenya and Uganda.

Umar Banda

CFO Awards 2017 nominee Umar Banda has finally been permanently appointed to the position of City of Tshwane CFO, a role he CFO MAGAZINE • CFO.CO.ZA

11

APPOINTMENTS

Hansal and Wits

has filled in an acting capacity for the last three years. “It does get a little tricky at times but if you stick to your values it makes life a lot easier,” Umar said in a previous interview with CFO. co.za, the online hub for finance professionals.

Broadband Infraco named Ian van Niekerk as its new CFO and to complete the shake-up, the state-owned company also announced the appointment of a new CEO, Andrew Matseke.

CFOs becoming CEOs

Robert Katz

Hansal International recently launched its expansion into South Africa, Ghana and Kenya, simultaneously announcing that it has appointed Jo-Ann Pohl as the company’s chairperson for Africa. Jo is currently a consultant at property investment fund, Texton, a role she took up in May this year. Before that she fulfilled high-profile CFO roles at Standard Chartered Bank and Telesure.

Peregrine CFO Robert Katz, who was nominated for both the 2016 and 2017 CFO Awards, has taken over as interim CEO at Peregrine, with industry insiders expecting he will hold onto the job permanently. Peregrine’s previous CEO, Jonathan Hertz, stepped down in June. Dispensation was obtained from the JSE for Robert to continue in his role as CFO during the interim period.

Jo-Ann Pohl

Mary Vilakazi

A number of high-profile CFOs recently also made the step up − or sideways − to CEO. MMI promoted Mary Vilakazi, nominated for the 2017 CFO of the Year Awards, to the role of deputy CEO. In her new role, Mary will be responsible for driving the effective implementation of MMI’s plans. She will be replaced by the new group CFO, Risto Ketola, who joined MMI last year as an Investor Relations and Business Performance Executive. Before this, he was a top-rated insurance analyst in the industry.

12

CFO MAGAZINE • CFO.CO.ZA

BP Southern Africa has appointed CFO Priscillah Mabelane to the role of CEO, taking over from the outgoing CEO Daniel Odogwu.

Prior to joining BP as CFO in 2011, Priscillah held various executive roles in a number of large South African companies, including Airports Company of South Africa (ACSA), where she was CFO; Ernst & Young, where she was a tax director; and Eskom, where she held various roles in finance, tax and general management.

Net1 CFO Herman Kotzé has taken over from founder and CEO Serge Belamant, who has retired.

Former Finance Minister Nhlanhla Nene recently took on the role as head of the Wits Business School (WBS). He will serve as the school’s interim director until a new leader can be appointed ahead of the start of the next academic year. Once a new head is appointed‚ Nhlanhla will continue to serve as an Honorary Professor and a Scholar in Residence at the school.

Nhlanhla is also a non-executive director at Allan Gray and a resident adviser at Thebe Investment Corporation. l

Is Africa on your agenda?

Africa is a continent of contrasts, unique challenges and amazing opportunities.

To succeed in a business landscape that’s increasingly driven by data, organisations have to look closely at the data they collect, how they manage it, and what insights it can unlock. Our data and analytics teams help business leaders create an environment where data is used to unlock future growth, optimise operations by removing complexity and achieving efficiencies and manage business risk.

Let us help you reimagine business in the digital age. #OpportunityAfrica

www.pwc.co.za/data-analytics ©2017. PricewaterhouseCoopers (“PwC”). All rights reserved. (17-20924)

LEADERSHIP

Leading seismologist Arno Daehnke now guiding Standard Bank’s brave new world

Outside the box “High return on equity is one thing,” says Standard Bank FD Arno Daehnke in an exclusive interview with CFO Magazine, "but with R2 trillion of assets, the bank can really make a difference in people’s lives and the economies in which we operate.” By Joël Roerig

L

ast year, soon after he was promoted to finance boss, Arno Daehnke walked into Standard Bank’s boardroom to do a presentation.

Like any incoming executive worth his salt, he wanted to set the tone for his tenure from the word go. Of course, the new FD had presented to these very same board members many times before, though now he was part of the pack.

Rather than focusing foremost on financial ratios, the balance sheet and headline earnings of R23 billion, the bank should be spurred on by five value drivers and the financials don’t come first, said Arno. He detailed a plan (see page 14) which identifies that client experience combined with employee engagement and risk and conduct result in a financial outcome. Social, economic and

14

CFO MAGAZINE • CFO.CO.ZA

environmental impact also made the top five.

The board agreed with their new FD that it cannot be business as usual for Standard Bank, and all five value drivers are now a part of the bank’s planning and reporting processes to drive the correct strategic outcome. “We all understand that we need to become more client-centric,” says Arno. “Dealing with Standard Bank needs to be an efficient and exceptional experience.”

Agility is a much-used word in the banking environment, where FinTech startups are challenging us and large players in different industries are becoming competitors, like Google, Facebook, Alibaba and Apple. “These companies could disintermediate us, making banks a utility,” says Arno, who says it will take a special effort − and special people − for the 154-year old institution to remain successful. “How do we tilt the bank to become more forward-looking and client-centric?”

Hiring curious people

“How do we tilt the bank to become more forward-looking and client-centric?”

Quick to emphasise the important work that hundreds of accountants do on a daily basis, Arno says that qualifications are not always an indication that a person will be the right fit for the bank of the future. “It is not always necessary to be a CA(SA).

Within finance, there are much

LEADERSHIP

Arno Daehnke’s five value drivers 1. Client experience. “This should be the primary focus for every employee. It means putting the client at the centre of everything we do. There are many ways we can measure how clients feel about us, like the Net Promoter Score.”

2. Employee engagement. “This is about making Standard Bank a great place to work. Throughout the years this has been good and bad. In 2010, we had a painful retrenchment of 2,000 people, which − in hindsight − did not achieve sustainable cost saving.

We realise that. We need to focus on training, empowering people, rewards, and an environment where people can speak up. We are also very conscious of millennials and their different take on things like leave policies.”

3. Risk and conduct. “This is about doing the right business the right way. Where do we invest? What are our ethics?

Banking is all about trust, so this is a huge focus.”

4. Financial outcomes. “Revenue, profit and all the other numbers Standard Bank reports remain crucial drivers of the business.”

5. SEE: Social, Economic and Environmental impact. “We are more than just a place where people can open a bank account. We can drive savings for school fees, insure homes, register trusts and wills. We look after the well-being of people and this creates shared value.”

CFO MAGAZINE • CFO.CO.ZA

15

LEADERSHIP

more opportunities for non-CAs than in the past, but of course CAs are still a very important part of the team. In the end what really matters is: is the individual nimble and curious enough? I encourage people to have an open mind about themselves. You need that in every fast-changing industry where machine-learning, robotics and artificial intelligence are challenging, stretching and worrying people.”

If anyone should be able to judge the benefits of hiring outside the box, it is Arno, who hasn’t exactly taken a very traditional route to becoming a financial director. As recently as 1999, Arno was awarded the prestigious Rocha medal, the annual global recognition for the best doctoral thesis in rock mechanics. Thanks to his mathematical models that interrogate how shocks move through rocks, Arno was one of South Africa’s leading seismologists.

At university, Arno studied mechanical engineering and spe-

16

CFO MAGAZINE • CFO.CO.ZA

cialised in earthquakes. “I still love it,” he says, with a glint in his eye. “There are two types of seismologists: the ones that look at earthquakes from a mathematical angle and the ones that look from a geological angle.

I worked with applied mathematics, developing models to understand how shock waves move through different layers. I received a bursary from the CSIR, spent ten years there and also did

”The most important lesson from that time was that you cannot make a decision on 100 percent of the necessary information.”

my PhD, looking at how fractures run through rocks,” says Arno, who also spent three years in the Austrian capital Vienna, which harbours a great seismology lab.

Deep mining Arno is happy to explain how seismology is a crucial science for South Africa, where mining-induced tremors are a daily occurrence. “If there was an accident, we would be the second group of people to go deep down under the ground, after the rescue staff,” he says. “I spent a lot of time travelling around the world, because with our expertise in South Africa we were world-leading experts in deep mining, as the gold mines here are much deeper − as far as four kilometres − than anywhere else.”

When the conversation turns back to banking, Arno’s calm passion doesn’t let up. As CFO, he comes across as a typical strategist and catalyst, if he were to be categorised according to Deloitte’s ‘four faces of the CFO’. His past as an under-

LEADERSHIP

Enabling growth in Africa

ground researcher has given him a deep respect for the minutiae, he reflects. “To get involved at this high level of business and finance, you really have to understand the detail.”

A part-time MBA at Milpark Business School eventually heralded the unexpected end of his life as a rock mechanics expert and, in the year 2000, he launched his remarkable career as a finance leader. “Part of that MBA was looking at the value-atrisk model, which was then fairly new,” Arno explains. “I visited the big four banks and interviewed the chief risk officers. I was immediately struck by how interesting it was." Soon after the interview, Standard Bank offered Arno a position in the quants department, which he accepted.

As an enthusiastic mountainbiker, Arno is used to getting up early and putting in the hours to achieve ambitious goals. “I cycle five times a week, I used to do more. If I don’t exercise, I can’t have a healthy mind. It allows

Standard Bank strongly focuses on the African continent and Arno Daehnke says he spends more than half of his time discussing issues north of the Limpopo.

“We previously had the ambition to be a bank for global emerging markets, but after the financial crisis we radically changed that to become a bank in, for and across Africa,” he says. “The expected growth is in Africa and our expertise and our competitive advantage is in Africa. We are specialists in difficult markets: regulatory uncertainty can be high and liquidity can sometimes be very low. Getting dollars can be very difficult.”

African countries other than South Africa already contribute 29 percent to Standard Bank’s headline earnings and the bank is hoping to grow that share to well over 30 percent in the next four years, with the withdrawal of Barclays creating even more opportunities. “You have to be present in all countries you work in,” says Arno, when asked what successful recipes the bank has developed in the continent. ”You need to be on site. We don’t believe in suitcase banking.”

me to destress.”

Not-so-secret Putting in the hours − many thousands of them − was also the not-so-secret recipe for his successful career switch. “Banking proved to be an incredibly complex business,” admits Arno. “Just the jargon takes a long time to get used to. I remember hearing Expected Default Frequency for the first time and many other

terms, and I had no idea what they meant. As Malcolm Gladwell famously wrote, you have to spend 10,000 hours to achieve world-class expertise in any skill.

For banking − for me − that was definitely true.”

Arno’s career kept accelerating: from being the head of asset liability management to managing the group’s balance sheet through the financial crisis. “That

CFO MAGAZINE • CFO.CO.ZA

17

LEADERSHIP

was a formative experience,” reflects Arno. “It was a once-ina-lifetime experience. We needed to make decisions quickly, working with the board and the CEO. The most important lesson from that time was that you cannot make a decision on 100 percent of the necessary information. I already knew that from seismology, which deals with the laws of nature and chaos, but finance people tend to always look for absolute certainty.”

If there was a common denominator to be discovered in Arno’s careers, it would be fractals, he says. “I have always been extremely interested in fractals, which are not only a great tool to predict how shock waves travel through rocks, but are also used by modern animation studios like Pixar,” says Arno, taking the time to explain that, as applied by animation studios, the method uses lines that fork and split in predictable but variable ways, making it possible to render complete forests of trees without having to physically draw a single one of them.

Lots of lessons Seismologists use these models to try and understand earthquakes, while investors use fractal methods to predict market movements, fuelling Arno’s fascination. “I like the markets business: trading, hedging commodities, interest rates, bonds and so on,” says the FD, who also spent time in treasury and capital management before suc18

CFO MAGAZINE • CFO.CO.ZA

“Distilling complexity into relative simplicity, looking at key decision drivers… I enjoy that.”

ceeding long-serving Simon Ridley − CFO of the Year 2014 − as finance’s top dog last year.

There have been many good moments and lots of lessons learnt since I joined Standard Bank in 2000,” says Arno.

“Distilling complexity into relative simplicity, looking at key decision drivers… I enjoy that and they are the things that are most crucial to a bank. As regulated as our industry is, it is also important to always look forward: in our case we work with a four-year horizon.”

“Standard Bank is a pivotal institution in the South African economy, which means we have a broader responsibility to support the economy”, he says.

“We are open for business, even despite the recent downgrades and slow economic activity, which is important as we are the

biggest bank by assets.”

Like the economy, the slow pace of transformation of the South African business world is a worry, says Arno. At Standard Bank, 85 percent of junior management is non-white, but in senior management that percentage is just 38 percent.

“We have transferred R12 billion in value to empowerment partners and through that we have assisted many individuals, but as a country it has become more urgent than ever to transform quicker,” says Arno, who sits on the bank’s transformation committee chaired by CEO Sim Tshabalala. “The pace needs to be stepped up. If you look at the statistics, most CEOs are white and there is still a massive wealth gap two decades after apartheid ended. It is not right and it is not sustainable.” l

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

LEADERSHIP An interview and six career lessons from Comair CFO Kirsten King

From Benoni to Boeings Airlines are a notoriously difficult business, with narrow profit margins and stiff competition. They are also prey to the volatility of oil prices, as well as fickle exchange rates.

But for Kirsten King, a self-proclaimed Benoni girl who entered the “grey-suited” world of accountancy, this is a place not only for the day-to-day administration of finance, but also for networking, learning, and a few strong cups of tea.

S

ince her appointment in 2014 as financial director of Comair, South Africa’s oldest independent airline operator, Kirsten reckons she’s learnt plenty of lessons. Here are six of them: Expect and relish variety “My responsibility is to provide a financial perspective and input into Comair’s business strategy and to manage the finance department,” Kirsten says. “Although my role is financial management, a substantial part of the work involves people, whether that’s providing guidance to my team, networking with other departments of Comair, or hammering out new efficiencies and solutions with suppliers, customers or other stakeholders.”

1

Comair, which has an uninterrupted, 70-year record of profitable operation, has two airline brands in Southern Africa,, kulula.com and British Airways, 20

CFO MAGAZINE • CFO.CO.ZA

as well as several other business units, including the Comair Training Centre, which conducts training for air crews of 36 airlines, as well as the South African and Indian air forces. The company is currently busy replacing its fleet with new aircraft from the Boeing 738-800 family.

“It’s a very diversified operation,” says Kirsten. “While I naturally conduct the day-to-day duties typical of an FD role, each day begins with scanning the news for relevant developments and checking exchange rates and fuel prices while managing the daily flow and trends of business: cash and treasury management, financial reporting, variance analysis and forecasting, and of course, responding to an ever-increasing volume of electronic communications.”

You learn more if you’re humble “Growing up, I never envisaged being in the position I am today.

2

“I learnt the value of my stubborn, neversay-die attitude.”

Being an FD in the corporate world was certainly not a childhood goal of mine and I wasn’t the most academically excellent at school or the most disciplined university student. But life has a way of lobbing some curveballs at you in your personal and professional circumstances, and I’m grateful for some of the tough times I’ve experienced, especially as I learnt the value of my stubborn, never-say-die attitude.”

Embrace challenges and moments of seminal change “I was part of the team that managed Comair’s move from our internally developed ticketing platform to the Systems 3

LEADERSHIP

“Flicking the switch on the old and activating the new was awe-inspiring.”

heavily in areas of education and capacity development where the government’s resources are stretched. One area with real potential is graduate development, which is ideal for taking students from university and training them in business in ways that combine theory, mentoring and on-the-job training.” platform, and that was the moment I knew I was where I wanted to be. I suppose the transition spoke to my predilection for change and progress.

Seeing years of hard work across all sectors of the company culminate in a moment of flicking the switch on the old and activating the new was awe-inspiring, especially as every employee had worked towards it.”

Seek out teams who challenge and support you “I’m very lucky to work with an executive team, each member of 4

which is passionate and highly skilled in their own right, and each of which continually inspires and motivates me to be my best. Our CEO, Erik Venter, is a role model for how to take things in your stride without seeming to break a sweat. His even temperament, humility, level-headedness and unflappable logic are just a few of the things that make him a great leader.”

Business needs to be clever about education “Corporates are already investing 5

Enjoy downtime “Everyone on our team works hard, so decompressing and finding work-life balance is important. I like to walk the suburbs, though it’s really my labrador who walks me. I’ve also taken up yoga and while I’m by no means an accomplished practitioner, I’ve found it has real benefits for mind and body.

When not working or exercising, I like to spend time with my nine-year-old daughter and my partner of 20 years, usually in the kitchen, cooking dinner and enjoying a glass of wine.” l 6

CFO MAGAZINE • CFO.CO.ZA

21

LEADERSHIP Impressive CFO panel discusses the business role of finance at Summit 4

Operating at the coalface Agility is a word that is bandied about in boardrooms across South Africa, but how does one actually achieve it?

How do you step away from your desk as a CFO and really get to grips with the business? Can you find out how the business ticks without abandoning your finance duties?

Till Streichert, Ramasela Ganda, Nazeer Essop and Ockert Janse van Rensburg

T

hese and other pressing questions were on the agenda in the master class at the fourth instalment of the CFO Summit Series in Johannesburg on 19 July 2017. Guests were welcomed to the master class, entitled ‘Rolling up your sleeves and getting your hands dirty – agile finance leaders lead the way’, by CFO South Africa MD Graham Fehrsen, who encouraged the financial executives in attendance to swap notes and discuss the issues on the table, while making arrangements to network on their own steam.

The impressive panel deliberating the topic included Deloitte partner Nazeer Essop and award-winning CFOs Till Streichert (Vodacom), Ramasela Ganda (Ekurhuleni, now Barloworld Equipment) as well as

22

CFO MAGAZINE • CFO.CO.ZA

Ockert Janse van Rensburg, CFO of Motus.

Ramasela, the 2017 Public Sector CFO of the Year, spoke about the Finance Black Mambas, the Friday initiative that took her team to the streets to check if policies were working (see interview from page 22). “I invested a lot of time in selling my vision to various stakeholders and allaying their fears. I also spent time with all the political parties and, when needed, went back to legislation and pointed out inaccuracies to bring them around,” she said.

For CFO of the Year 2017, Till Streichert, the resistance he met when trying to implement changes was both positive and negative. “When you come to a company as successful as Vodacom has been, it’s natural for people to question why

you are challenging standard practice. Our SAP ERP implementation gave finance a platform to reset its remit and the way it operated, using the pressure they were under to mobilise and jointly create a vision.”

The German-born executive was awarded the prestigious gong for engineering a turnaround at the telecommunications giant and overseeing the massive ERP project in which the firm changed from Oracle to SAP. He put down this success to the right attitude, competent leadership and deep analysis. “Focus and pace-setting from leadership is key. Technical competence is one thing, but to make finance world-class, you need an enormous amount of other capabilities, including business partnering.”

All members of the panel agreed

LEADERSHIP

Expert insights at Summit 4

that it was imperative that CFOs new to the role make early inroads into understanding operations, particularly if they were entering a new industry. When he joined Sunbake Bakeries, Ockert visited every plant, even in the most remote locations. “If you don’t take the opportunity at an early stage to familiarise yourself with operations, it can be difficult dealing with more experienced colleagues around the boardroom table. I still make a point of visiting dealerships in remote towns, even while on holiday.”

The evolving role of the CFO and enormous demands being placed on individuals in the C-suite was a hot topic of discussion. Deloitte identifies four faces of CFOs: steward (basic finance functions), operator (running finance more effectively), catalyst (wider

understanding, collaborating and operational understanding) and strategist (bridging the gap between operational and strategic responsibilities).

“The role is changing significantly,” said Nazeer.

“Operating at the coalface turns you into a catalyst for change. It is about the business of tomorrow, not merely gaining a clean audit. You need to move into the catalyst role as soon as possible, but people, processes and technology need to be sound for you to have flexibility.” l

“There is a belief that notwithstanding all of the macro noise that we’re facing at the moment, the liquidity of equity markets is good, management teams of listed companies are excellent, and corporate governance at the listed company level is as good as any market in the world.

So, that gives investors a lot of confidence. They’re certainly not looking at the headlines being generated in the media at the moment and thinking that South Africa is off limits. Far from it.”

Richard Stout, Head of Equity Capital Markets Standard Bank, said during a breakaway session about initial public offerings (IPOs).

“It’s about understanding risks and planning ahead of time.

Corporate gut checks are one thing, but you need to understand that risk is not just about the regulator, but extends to human impact. Corporates must think of their reputation. They could easily inadvertently be contributing to terrorism or modern-day slavery without access to information.”

Sneha Shah, Africa MD Thomson Reuters, said during a breakaway session on compliance and technology.

CFO MAGAZINE • CFO.CO.ZA

23

12 & 13 October 2017

Sandton Convention Centre

Ramasela Ganda, speaker at Finance Indaba Africa 2017

LEADERSHIP The rise-and-rise of Public sector CFO of the Year 2017, Ramasela Ganda

Serving the nation “Somebody has to work for the people. Somebody needs to rise up. Who is it going to be? What kind of country do we want to live in? This is my cross.” By Joël Roerig

R

amasela Ganda has suddenly started speaking softly and seriously.

After more than an hour of lively anecdotes, bubbly laughter and intimate insights into the rise-and-rise of a remarkable finance leader, her voice nearly breaks with emotion when she starts talking about the responsibility she feels for the future.

when you make unpopular decisions is something that shouldn’t be discounted,” says Ramasela.

“At Ekurhuleni, I didn’t take up the city manager’s offer of bodyguards at one point, because I don’t believe in living my life in fear. We take high risks in doing our jobs. When the city manager in Richmond was gunned down, I remember that it could be me or any other public servants."

This is someone who has worked so hard as a financial manager that she landed up in hospital. This is someone who has shrugged off numerous death threats, knowing her family was afraid she would one day not come home. This is someone who knows the names of backstreets and alleys into which her political bosses were too scared to venture.

At the 2017 CFO Awards, Ramasela won the Public Sector CFO of the Year Award for her incredible accomplishments at Ekurhuleni Municipality. She dedicated the prize to “all public servants that serve us diligently and with honesty” and referred specifically to public sector CFOs who have “lost their lives because they said no to corruption”. Long-eschewing a CFO role in the private sector, she left Ekurhuleni at the end of last year

“The risks that you take in your job as a senior public servant

CFO MAGAZINE • CFO.CO.ZA

25

LEADERSHIP

and started as CFO: Rental and Corporate Service at Barloworld, which had been courting her unsuccessfully for quite a while.

A dream deferred “Everything has its time. I still love public sector and I know I will go back one day,” says Ramasela. “My dream is just deferred. I have worked in government for almost a decade and I know when time to go is and when time to stay is, self-preservation is important. I know there is still a lot of work to be done in Ekurhuleni and public sector as a whole…”

Growing up in Atteridgeville and later Soshanguve, Ramasela was one of those rare young girls who immediately loved economics and accounting. “People used to think I love money... They were right,” she says with a broad smile. Her father hailed from rural Limpopo and worked as messenger at the Department of Defence, while her mother was a cleaner at ‘Binnelandse Sake’ “My teachers always thought my parents were doctors or engineers,” says Ramasela, recounting her early academic successes. “With every new teacher I had to convince them that my parents could not even help me with my homework.”

Not a fan of “horrible” domestic chores, Ramasela struck a deal with her mother during her matric year that she still proudly recounts. “My parents were struggling financially, so I told them I did not need to go to extra Saturday classes in the Pretoria

26

CFO MAGAZINE • CFO.CO.ZA

CBD that my friends attended. In return, I wanted to be left alone to study the entire Saturday, not having to do laundry or cleaning. She asked if it was to save money, but I said ‘no, it’s because I don’t learn anything at the study classes’.”

Distinctions Her mother agreed and matric results peppered with distinctions followed. The most affordable tertiary study option was Vista in Mamelodi. Ramasela had already grown into a young woman who preferred to do things her own way, so when Deloitte came knocking in the third year to offer jobs to all good students, she refused, vowing to aim higher. Deloitte and Columbus Stainless ended up paying for her further education at the University of Pretoria.

“I was never an auditor,” says Ramasela, who was involved in the Vodacom audit during articles, but also in project finance and other disciplines. Most important during that period was to seek guidance from the more experienced, she says. “I leant on a lot of people. At Deloitte, Anneke Andrews was my mentor and she still is. She is a pillar... one of those BFFs... At Deloitte she would look at my programme and say no, you won’t learn enough.

From Pretoria, she would phone the Johannesburg office and organise more interesting work. People used to really envy me.”

Aged 24, Ramasela joined Vodacom as finance manager for marketing, but she soon

realised the job was not pushing her enough. “We were seeing the banks about getting airtime through ATMs, which was unheard of at the time. Our team would have one meeting and then go for drinks. I remember ordering a milkshake and I became the joke of the town. In a way, it was the best life. The money was good, but career-wise it didn’t work for me.”

At Telkom, Ramasela then became a senior finance manager after the person who hired her resigned and left a vacancy.

“I was told I had six months to prove myself. Talk about pressure,” Ramasela recalls. The company was in the middle of various crossroads, changing its accounting from cash to accrual, embedding new reporting standards and getting to grips with US GAAP because of Telkom’s audacious Initial Public Offering on the NYSE and JSE.

Americans “We worked day and night, me and the executive,” says Ramasela, whose son Oreabetse − now a 17-year-old accounting student − was only one year old at the time. “During the day we worked with the auditors and advisors. After that, the Americans would wake up and would be at us. We needed to

“I think it was all the junk food we were eating for months that sent me to hospital.”

LEADERSHIP

Scones, pancakes and waffles “On Saturday I bake,” says Ramasela, when asked if she ever takes time off. Ramasela’s son Oreabetse is now 17, but still gets stuck into the Saturday ritual, along with his sisters Lesego and Lethabo, 8-year-old twins. “I wake up in my own time, while the kids prepare something for us to bake. Even when the mayor called, I would not pick up. It is just me and the kids and we make scones, pancakes, waffles... anything we can think off. There are no rules. The house has to smell beautiful.”

tough, but good-tough.”

be on top of our game with the arrogant Americans. We finished work at five in the morning.”

This is the stint that landed Ramasela in hospital. “I worked Saturdays and Sundays too. I remember my ex-husband and son had been to a function at my in-laws and I came to pick them up. They showed me the dishes. I was still expected to be the ‘makhoti’. After a nice party, nobody cares that you work with billions and know all the world’s accounting standards. Everybody is relaxed. All the others have

done cooking and other chores.

Now it was my turn.”

“I think it was all the junk food we were eating for months that sent me to hospital,” says Ramasela, who is full of praise for her then-boss Robin Coode, still a Telkom executive today. “I remember when he came to the hospital with a big bunch of flowers and my father-in-law, who was visiting me, said he’d leave us. My boss then whipped out a file from under the flowers and back to work we were. I have no regrets about that period. It was

Ramasela’s next big leap came when she started as the finance wingwoman of Marna van der Walt at Gensec Properties. The company had just been shed by Sanlam and the new shareholders, among them Pam Golding, wanted to see value for money.

“I came from a protected environment and now I worked for a CEO who was the former CFO! I realised quickly that technical accounting is only 20 percent of the CFO job.”

Cash is king Five days into her third month, Ramasela started to panic as she realised she would not be able to pay salaries. “We had big debtors and I started calling them personally. I went to the debtors office and started working from there. The people that worked there all said they had been promised payment, but we needed to go after the money much more aggressively. That is CFO MAGAZINE • CFO.CO.ZA

27

LEADERSHIP

when I realised that for a CFO, cash is king.”

Ramasela calls her PA Anna Boshoff ‘a godsend’, who helped her master the company secretary role. She also still raves about her CEO and fondly recalls the tears both women shared after the board approved big bonuses after a great first year.

Van der Walt then initiated merger talks with JHI Isaacs, of which she eventually became the CEO. “Those were exciting times.

We were CAs. We were lawyers.

We did a lot ourselves. Her and I were like entrepreneurs looking for business. I went to Marna’s house on Saturdays to discuss what we were going to present to the board. There was a team spirit that made us successful.”

But Ramasela had a nagging feeling.

“I went to my mentors, one of them former police commissioner Riah Phiyega, who is from Limpopo like my family. I had an offer from Tongaat Hulett to become CFO and an offer from government. Financially they could not compare. I slept on it for days. I wanted to serve.”

Toyi-toyi Ramasela says her heart was at peace when she joined the National Nuclear Regulator as CFO, even though she faced her first 'toyi-toyi' just a month into the job. “They wanted me and the head of HR to leave as they did not like it that we were implementing policies and structure, which had been thoroughly lack28

CFO MAGAZINE • CFO.CO.ZA

Never trust anyone One of the secrets to being successful in the public sector is to always meticulously check everything that comes across your desk, especially when signatures are demanded, says Ramasela. “I tell people: don’t take it personally. I believe people are good, but I have been trained not to trust you.”

ing. They told me I was the seventh CFO in 18 months. They told me I would die. I stayed there for three years.”

From the regulator, Ramasela joined Broadband Infraco, before starting her famous tenure at Ekurhuleni. “Recently, I have been doing a drive of getting professionals to join the public sector,” she says, admitting it is an uphill battle in times where public servants are mostly in the news for the wrong reasons. “We have not been taught to serve the nation. Doctors serve their time

LEADERSHIP

in government hospitals. I believe that CAs and all other professionals should go and serve as well. The country is not going to change if we don’t do our part.”

At Ekurhuleni, Ramasela blossomed. “The toughest challenge was to balance the budget,” she says. “You’ve got the politicians insisting that the budget is propoor. For some people this means social welfare, but I believe it is about a balance with socio-economic development. The grant system is not sustainable. I put my head on the block and made the decision to change ratios and allocate money into economic development, including simple things like tarring roads to the industrial area. We also wanted to diversify, fill market gaps and harness the potential of the airport as per the City Growth Development Strategy. The nice thing is that, when you make decisions in local government, you immediately see the impact on the ground.”

Ramasela says she had a great political principal, MMC of Finance Moses Makwakwa, who spent countless hours with her building relationships with the political decision-makers who had to approve the budget plans.

“I still considered it a pro-poor budget but it was very tough to present it before the ruling party.

We had to do a lot of lobbying all stakeholders and getting their buy-in. There was a lot of persuasion. Often, it isn’t about the numbers but the way in which you present your position. I feel that a CFO of Ekurhuleni in 2027

should not have to pay for my decision. It was all about taking the long-term view for the good of the municipality.”

A pothole The enormous impact a finance leader can have on people’s lives surprised even Ramasela − and at the metro her accounting mindset quickly changed into an execution mindset. “When I joined, I made strong governance my foundation and we became the first municipality in Gauteng to achieve a clean audit in 2014. Most politicians in Ekurhuleni didn’t appreciate this achievement because the view was that it was achieved at the expense of service delivery. I was driving through the city one day and saw a pothole beneath a poster advertising our clean audit and couldn’t reconcile this in my mind. I decided to do things differently.”

That is when the Finance Black Mambas were born, a weekly roadshow of the finance team to areas, streets and corners with real issues − often places where no politician expected us to go.

“Every Friday, my team and I pulled on our personal protective equipment and began going out to see the things we had budgeted for at work – the road infrastructure, construction projects, housing, etcetera. This helped us appreciate what we were trying to achieve and also improved the quality of implementation, as we became project managers in a sense. This was done with the support of Khaya Ngema the then-City Manager of Ekurhuleni Municipality.

“I began to see myself as a social workerCFO. That has been a pillar of my success.”

The project was a success in many ways. “The quality of our capital expenditure improved dramatically. We also went out to customer care centres to deal with billing ourselves, which gave us insights into the problems citizens face. I began to see myself as a social worker-CFO. That has been a pillar of my success.

Investors also loved that I knew exactly what was going on in the city and this contributed to us achieving an AAA credit rating from Moody’s.”

Vetkoek Real life sometimes didn’t reconcile with rules and regulations, Ramasela noticed during her Black Mamba outings. “As part of our finance open day sessions, on Friday we went to Tembisa, the best rate-paying township in the City, if not in the province.

The rate-paying queues were very long. One lady said she sold vetkoek but the municipality had switched her electricity off.

She could not make a payment arrangement because that could only be done by a homeowner, which was her estranged husband. She said: who is benefiting?

I cannot make vetkoek and you are not getting any money. It just shows you that you cannot write policies in the office.”

As a CFO, it is crucial to get per-

CFO MAGAZINE • CFO.CO.ZA

29

LEADERSHIP

sonally involved in these issues and inspire the team to come along, says Ramasela. “Over the years, I’ve learnt to really listen to my team and show appreciation for their input. I developed and motivated my staff to strive for excellence, giving them exposure to other units and bringing them closer to the source of business in the process. We transformed the city through willpower and hard work.”

The Finance Black Mamba idea was also a game changer for the finance team. “They loved it and this gave them a sense of identity. We also used to check in at Monday meetings to discuss all issues, including both personal and professional areas. They got to know each other and many of them became friends. This was a winning formula,” says Ramasela, who also started a mentorship programme. “I am a mentee myself as well and I regularly visit townships in the area to support young achievers.”

Fierce backlash Like many other municipalities, Ekurhuleni was used to giving service providers a blank cheque to fulfil their obligations over three years and the spending was not linked to the budget. Changing this culture is among Ramasela’s biggest achievements, she says. “I was horrified to find funds being moved all over the place in the budget, when in reality, payments had already been made. I introduced the concept of contract value – a contract would expire when either the time had lapsed or there was no more money.”

30

CFO MAGAZINE • CFO.CO.ZA

“I work for achievements, not for bonuses.

I usually forget what is in my performance contract.”

Ramasela faced a fierce backlash, because many people − including her colleagues − accused her of compromising service delivery. “But I stuck by my guns and refused to recommend any contract that didn’t meet the basic governance standard.”

Mere mortals would take a timeout after having to leave such unfinished business, but Ramasela is not the type to take it easy. “I started at Barloworld in February and have mainly been occupied by setting up proper procurement structures for Barloworld Equipment.”

From a finance team of 1,300 people to just ten is quite a change, so Ramasela has to go on the hunt for her own challenges. “The general manager showed me the strategy for rental, but I did not find it ambitious enough. In a weekend, I developed it and his view was that it was too aggressive and would endanger our bonuses. But I work for achievements, not for bonuses. Those should be just that: bonuses. I usually forget what is in my performance contract. Your job needs to be about value creation.”

While throwing all her energy at Barloworld, Ramasela is hopeful that the current complicated political climate is changing. “We are hearing very different language about corruption than even a year ago. I see people coming out of their shells. We really have an opportunity to correct things, as South Africa is not a terribly poor country. Where we don’t have challenges, we don’t grow.

We are a resilient country. ”

With a smile Municipalities, Ramasela says, are the engines of the country.

Enthusiastically she recounts how dynamic the work was. “Just after I joined I remember driving to a lekgotla in the Vaal, thinking it would be boring. Wow, it was insane. I found the team, led by the City Manager, talking about strategy. There was no profession that was not there. I could not get enough of it. The intellect in that room! They were all people wanting this city to work.”

Ramasela calls it “very fulfilling” to work for government. “You go to bed with a smile, because you know you have touched lives. To my colleagues in the public sector I want to say: always know your service is not in vain. Conduct yourself with pride, dignity and integrity. Never compromise. We value what they do for us.” And one day, Ramasela says, she will once again be contributing to the country from the inside.

“I still really want to serve.” l

AFRICAN. We can bring world-class banking to all of Africa.

We believe better, more accessible banking can help unleash Africa’s unlimited potential. It’s why we’ve built Africa’s largest fibre infrastructure and provide an award-winning satellite network, capable of making systems faster, more dependable and more secure across the continent. Because we are not just a telecoms company.

We are your technology partner.

www.liquidtelecom.com

Building Africa’s digital future

BUILD A BETTER FUTURE

“I am excited to learn and teach at the Finance Indaba.” Vusi Thembekwayo, speaker, investor and disruptor

“Finance Indaba Africa is awesome.” Award-winning CFO Debbie Ransby of Takeda Africa

“It is truly an unprecedented gathering of finance professionals from across the continent.” Thomson Reuters Africa MD Sneha Shah

World-renowned speakers, 5,000+ finance professionals, 60+ exhibitors

#findaba17: two days of inspiration Are you ready to build a better future? All finance professionals are invited to the Finance Indaba Africa 2017, the biggest learning and network platform in Africa and the most important annual event for accountants and finance teams.

F

inance Indaba Africa is the only annual event on the continent where 5,000 finance professionals gather under roof for two days to advance their knowledge, networks and careers. CAs and 32

CFO MAGAZINE • CFO.CO.ZA

members of other professional bodies qualify for up to 14 CPD hours by visiting the exhibition and a selection of the 100+ learning sessions. “Given the incredible range of opportunities to learn among peers and industry lead-

ers, CFOs would be crazy not to send their teams,” says Graham Fehrsen, MD of CFO South Africa.

Back by popular demand: Vusi + Martijn Besides the American culture

BUILD A BETTER FUTURE

"We will see the end of the big banks and law firms.”

Martijn Aslander, lifehacker and stand-up philosopher

guru Stan Slap (see page 44), there will be a host of other world-renowned speakers climbing on stage on 12 and 13 October. Two of the most incisive speakers of last year’s events will be back by popular demand: Vusi Thembekwayo and Martijn Aslander.

Vusi opened the inaugural indaba last year with a thought-provoking talk on innovation and disruption, a speech that has become a viral YouTube hit since then.

Martijn is a renowned standup philosopher and lifehacker from The Netherlands, who challenged the audience with a talk titled ‘Forget ownership, attitude is the key to exponential growth in the 21st century’. Both speakers have indicated their contributions at #findaba17 will be even more brutal, frank and incisive.

Nonkululeko Gobodo + top CFOs One of the most anticipated presentations of the event will

“It’s an opportunity to learn, to network and to grow. It really is a must-do.” Jo-Ann Pohl, Hansal Africa Chairperson and former top CFO

be delivered by the inspirational Nonkululeko Gobodo, the country’s first female black accountant and founding mother of SizweNtsalubaGobodo. She will also participate in a discussion with some of the country’s best female CFOs, like Takeda’s award-winning finance boss Debbie Ransby, and MMI’s Mary Vilakazi, who was recently promoted to deputy CEO. One of the best ways of planning your itinerary between the many mouthwatering sessions in the Sandton Convention Centre is by using the Thomson Reuters Convene app. In combination with the printed programme guide, it helps visitors pick the most relevant presentations and discussions. No doubt, many will prioritise contributions by Auditor-General Kimi Makwetu and top CFOs like Nishlan Samujh (Investec), Lucas Verwey (Distell) and Christine Ramon

“It’s such a prestigious event!” Nonkululeko Gobodo, keynote speaker

(AngloGold Ashanti).

Latest trends and eye-opening exhibits With this year’s mind-blowing collection of partners and exhibitors (see page 5), attendees to the Finance Indaba are guaranteed to gain fresh insights about finance solutions, the latest digital tools, recruitment trends, the future of auditing, business optimisation and cutting edge consultancies. l

5 things you need to know

1. 12 & 13 October 2017 at the Sandton Convention Centre 2. Free of charge for finance professionals 3. Twitter hashtag #findaba17 4. Finance-indaba.co.za to exhibit or register 5. Email Sarah Chalmers at schalmers@cfo.co.za for team registrations

CFO MAGAZINE • CFO.CO.ZA

33

BUILD A BETTER FUTURE Sizwe Nxasana discusses four fundamentals for a better future

Rethinking education South Africa needs to rethink its education system and adopt a vastly different approach to learning in order to adequately equip students for the future in the digital age. During a recent conference, Sizwe Nxasana − one of the living legends of the South African accounting profession − outlined four fundamentals that need to be addressed urgently.

By Iga Motylska

A

ccording to the World Economic Forum, 65 percent of students entering primary school today will ultimately end up working in completely new job types that don’t yet exist. “We just have to look at high-paying jobs today that didn’t exist ten years ago, in order to understand that,” said Sizwe Nxasana, founder of Future Nation Schools and Chairman of both the National Education Collaboration Trust and National Student Financial Aid Scheme.

Sizwe is also a former CEO of Telkom and FirstRand and founder of the first black auditing firm in KwaZulu-Natal, which has now been amalgamated in SizweNtsalubaGobodo. He was speaking to an audience of policymakers, academics, corporates, entrepreneurs, and investors at the inaugural Singularity University South Africa Summit on 24 August, held in collaboration with Standard Bank, global partners Deloitte and strategic partners MTN and SAP. The two-day summit focused on how

34

CFO MAGAZINE • CFO.CO.ZA

exponential technologies will transform various sectors and will help to #futureproofAfrica.

“Our education system is still based in the architecture of the 19th and 20th century,” said Sizwe, outlining four fundamentals that need tackling right away. Our reporter Iga Motylska jotted them down for the benefit of CFO Magazine readers.

Free access to the internet The internet should be a free, basic human right. All children should have free access to data and information. Meeting that first critical step will enable the next step by teaching coding from an early age and incorporating technology-related lessons into a future-proof curriculum.

With that kind of foundation and experience, students will be able to programme robots later in their school careers.

1

The internet is driving technological disruption in education.

It has the ability to enable interactive classrooms that promote self-paced learning, according to the learners’ ability. Remote learning is also possible with

the advancements of technology, as students do not have to be in a classroom in order to learn.

The rate of e-learning needs to increase.

Problem-solving skills and character building Education is not just about acquiring skills. The way in which students are taught needs to be realigned, so as to teach them skills that will enable them to be active participants in this journey of disruptive technology that is affecting human development.

2

Many get lost in the massive amounts of information that the internet generates. They spend their days trawling through the information but cannot see the wood for the trees. They do not have the critical faculties to analyse the information and have insufficient time to reflect on it.

In an age of exponential change, the ability to memorise information should not be equated with intelligence. Students should not be tested using standardised tests that check progress and

BUILD A BETTER FUTURE

is no longer the sole source of knowledge. Instead, they become a facilitator and students become active and engaged participants.

Future Nations Schools has developed an integrated pedagogy, across the board, where teachers have widespread and varied knowledge that goes beyond the subjects they teach.

This will ensure that students are not taught in silos.

Projects that incorporate wide and varied skill sets should be assigned, so that students learn writing and researching skills, as well as the valuable social skills acquired by being involved in a group dynamic, and also develop their presentation and communication skills.

Decolonise the education landscape In a context where knowledge is power, epistemology needs to be revisited to promote indigenous knowledge, culture and beliefs that will give rise to indigenous solutions to our unique challenges. The solutions have always been there, they just have not been documented. If we are not careful in how we develop African knowledge systems, we will be the subjects of other people, who see opportunities at our doorstep. We need to change this as Africans, policy makers, government and entrepreneurs.

4

ability based on age and rote learning. Instead, there needs to be a reassessment of how human development is measured.

Students need to have their critical cognitive faculties developed and be taught problem-solving skills, so they may implement their knowledge in real-world scenarios.

Character-building is just as important as building skill sets.

Students need to be taught how to have grace, how to be resilient, and how to distinguish between right and wrong. While their

computational, critical, technological and comprehension skills are being developed, there also needs to be a focus on building upright members of society.

Quality education through quality teachers Quality education comes from quality educators. Teaching needs to become a highly respected and well-paid profession that will attract the smartest individuals.

3

In a connected and digitally enabled classroom, the teacher

By documenting indigenous knowledge systems, we may offer solutions to the world’s problems. Then Africa will be part of this fourth industrial revolution, not as subjects being acted upon, but as people part of the solution solving the world’s problems. l

CFO MAGAZINE • CFO.CO.ZA

35

XX

12 & 13 October 2017

Sandton Convention Centre

Nishlan Samujh, speaker at Finance Indaba Africa 2017

36

CFO MAGAZINE • CFO.CO.ZA

BUILD A BETTER FUTURE

Investec CFO Nishlan Samujh talks career, technology and the future of our children

The next big thing “Why can’t our kids be like those in India or Silicon Valley? We have a whole new generation coming and, as a country, need to find out what our next big thing is.” By Joël Roerig

“

We need to make sure our kids can stand up in the world and be counted,” says Investec CFO Nishlan Samujh. He is not only talking about his own nineyear-old son Timir, but about South African youth in general.

A soft-spoken optimist, Nishlan identifies the technological revolution as a train the country cannot afford to miss. “In South Africa, we are where we are. If we can all face up to those realities, we can focus on real change.”

Nishlan is one of those quiet CFOs that everybody who matters in the South African business world seems to know.

He says winning the Governance & Compliance Award at this year’s CFO Awards “surprised the hell out of me” and adds that his team is extremely proud of the

“I do wish we could think in a truly, truly radical way.”

accomplishment. In this conversation, Nishlan chats with verve about his humble beginnings but also reveals how to be an effective finance leader in a world full of entrepreneurs and "big people". The most passion, however, he reserves for the prospects of South Africa’s youth.

“Why can’t our kids be like those in India or Silicon Valley? We have a whole new generation coming and, as a country, we need to find out what our next big thing is,” says Nishlan. “How do we get youth and education behind a common goal? Instead of talking about yesteryear, we need to fly out of it. These things are easy to say but I do wish we could think in a truly, truly radical way.”

A new world The next big thing, to be sure, has to do with technology. “How do we partner with tech in a way that transforms platforms and the way we interact with the world? Today we spend 60 to 70 percent of time on tasks and only 30 to 40 percent on problem solving and new ways of

doing things,” says Nishlan. “With the aid of new technology, tasks are being shifted to a different space, so the human mind can work more effectively. In South Africa, we need to create minds that think beyond the task-orientated world. From that will come creativity. We are moving into a new world. If our kids are taught to think in this new world, who knows what we can be as a country?”

Keeping up with the technological Joneses is also a daily mission at Investec, where Nishlan, with the help of his strong team, has recently been involved in introducing capital management and budgeting tools. “Some of these systems are hard sells in a people-centred organisation like Investec, with a challenge to get through at all levels on whether we are implementing fit-for-purpose and future-proof platforms.”

Those processes can be difficult but are never traumatic at Investec, says Nishlan. “Making tough decisions isn’t that tough, because this is a very collaborative institution. Investec is not

CFO MAGAZINE • CFO.CO.ZA

37

BUILD A BETTER FUTURE

“Sure, there were drugs and opportunities to get involved in things you shouldn’t, but there were also checks and balances.”

just about the CEO or CFO. I’m conflict averse but at Investec, because of strong collaboration and support, I have grown in my role and am able to play my part. I grew up as an accounting technician and ran the IFRS project, but now my role is to make sense of where we are and what our evolution looks like. Working alongside our strong leadership team, you’ve got to be accustomed to working with ambiguity.

My role has been to hold the picture and execute.”

Robotics Proving the need for change lies often with finance, says Nishlan.

“For example, when we look at systems to enhance the flow of information between finance and risk, there are a lot of efficiencies to be gained, but with this comes risk. The issue of scale and scalability of cloud solutions will also run ahead as we move on. Part of my role is to understand what this means for us as a business.”

Nishlan predicts that the “next three to four years will be transformational”, with Investec being at least part of, if not ahead of, the curve. “In reality, automation is a lot simpler than you think it is. There are little pockets where robotics is becoming part of the conversation. The boundaries are continuously pushed.

Computers can read your email and answer for you. Gone are the auditing days where you test a sample of transactions to gain

38

CFO MAGAZINE • CFO.CO.ZA

comfort on the entire population.

You can now continuously check the entire environment with 100 percent certainty. And yes, some jobs are going to change or disappear. That is why it is important that we start training for the world that is coming.”

Nishlan’s passion for education goes a long way back. Growing up in Durban, his mother was a seamstress in a clothing factory and the only breadwinner.

“My mom left the house at half past five and was back at half past five that evening. There were some basic rules for me and my six-year-older brother Sean: the house needed to be clean and she did not want to hear anything negative from our school.”

Block of flats Although these were days of apartheid and poverty, Nishlan gained a lot from the community in the block of flats where he grew up, playing football and cricket. “It was not about the wealth of the community or the flamboyance, but more about the simplicity. It functioned. The environment was very conducive to freedom of thought. Sure, there were drugs and opportunities to get involved in things you shouldn’t, but there were also checks and balances. If we stepped outside of the norms, a teacher stepped into our home.”

While Nishlan’s brother flourished as an entrepreneur “who

can sell your pants off you”, Nishlan took inspiration from his uncle’s humble home in Pietermaritzburg. It was a home that managed all of its resources as tight as possible. “Visiting this home was mind boggling.

The pipes to the taps were compressed thinner to prevent water wastage. Yet, my cousins were guided into fields of medicine, finance and business. I took a particular liking to my cousin, Jashwin Ramchunder, who was a chartered accountant. My cousin had simplicity about himself. He was very balanced and very connected. I enjoyed the man he was, laying the foundation to my career as a chartered accountant.”

With many covert mentors along the journey, Nishlan soon discovered that progress was all about relationships and learning from others. “From standard 7 I wanted to be a CA," he says.

Sasol ended up paying for a big portion of Nishlan’s studies and after articles at KPMG, he worked for some time at the petrochemical business. “When I joined Investec I was 25. I am 43 now. It just gelled so well.”

In awe Nishlan says he still remembers walking into the Investec office for the first time in January 2000. “I was just in awe. What Investec does well, is that it doesn’t define the four corners of your role. Before I knew it, I was

BUILD A BETTER FUTURE

Nishlan Samujh receives the Compliance & Governance Award from Victor Sekese, CEO SizweNtsalubaGobodo

working to solve problems. From being an accountant, I started being involved in deal structures, acquisitions, the London listing of the group, and the sale of our US business.”

The reason for his success and ultimate promotion to CFO, despite being an introvert and backroom operator, is that he always had something useful to contribute to the discussions and that he invested in relationships, Nishlan says. “I am quite a reserved individual, but in my own funny way, I have been able

to build relationships. I am not the guy who will entertain everyone. I don’t play golf. I tried. I am also not the loudest at the bar.

But with the right partnerships, this place lets you get on with your business.”

Perhaps surprising to some, Nishlan is far from the type who is married to his work (he is married to his wife Shelina who he met at university). “I enjoy time out. For me it is important. I love holidays. I love exploring new places. I am a relaxed traveller and can really shut down and

Nishlan’s leadership style “You’ve got to be at the heartbeat of execution as a leader, and be able to empower. I trust people and allow delivery but will be critical if I need to be. I make changes when they need to happen. My style is open and collaborative – I engage directly with my team. I still take ownership for the outcome. If we are below where we want to be, for example, that’s my responsibility.”

CFO MAGAZINE • CFO.CO.ZA

39

BUILD A BETTER FUTURE

“The role of risk management is changing and might be done by machines in the future.”

forget about the world. At my final interview, Bradley Tapnack remarked, “Investec will take from you what it can, it is up to you to balance it.”

Investec has strong leadership across the organisation. Nishlan enjoys playing his part. “What keeps me sane is listening, learning, adapting and being part of the conversation. What I love about the organisation is that we are always striving to get to the next level; pushing the boundaries.”

Second nature Commenting on winning the Governance and Compliance Award at the 2017 CFO Awards, Nishlan says that these things need to be part of the DNA of an organisation. “Regulation is a pendulum that rebalances itself as time passes. If you run compliance as a rule book, you have to go back and check all the time and you can trip up very quickly.

A lot of it is proper common sense and yes, sometimes the checks and balances are a little bit too much and you need the rule book in front of you. But it needs to be second nature. There is a lot of change that has happened in this space since the 40

CFO MAGAZINE • CFO.CO.ZA

financial crisis. There is a lot that the regulatory world is trying to figure out. We are obliged to help reshape that space.”

Investec is dual-listed in London and South Africa, which means there are plenty of those rule books to go around in the Sandton offices. “We watch certain things critically and engage with the external world as thoroughly as we can. A lot of regulatory stuff from a global perspective filters into South Africa, so in our risk forums and board forums we share what’s happening across the world.”

The Investec culture instinctively balances important principles like “break china for your client” with “cast iron integrity”, says Nishlan. When asked how he deals with the difference in

interests between shareholders, clients and other stakeholders, the CFO says it is all about the “right return,” adding: “The principle of earning your right to that return is important for us.”

Risk managers and committees play an important role here, with Nishlan again bringing up the transformational power of technology. “The role of risk management is changing and might be done by machines in the future.

Machines have a revolutionary impact. In the future, there’s a lot that will be automated, but how do we deal with that? Certain levels of jobs will disappear as this evolves. The role of the CFO will evolve and the environment will change. I’m excited about this because it opens up a lot of new opportunities.” l

Finance: collaboration and the stick

“I probably spend 30 percent of my time working with other divisions on issues they have. There’s something in the culture here: if we work as a collective we’ll get the right outcome. Finance also holds the stick as we are responsible for policy implementation and regulatory compliance.

We’ve got individuals who watch information and look out for anomalies. We are always operating in that duality. We keep our channels to all the divisions open, which keeps the balance.”

BUILD A BETTER FUTURE

Eight future-proof elements of successful business models

Towards a digital world Are you preparing your business for a digital future or are you merely digitising existing products and processes? In this guest article, world-of-work guru Raymond de Villiers of TomorrowToday Global unpacks eight future-proof elements of successful business models. By Raymond de Villiers

I

have an app that I downloaded onto my phone that allows me to book movie tickets. At the end of the process, I am given payment options that allow me to pay by credit card or cheque. I have no idea how a cheque payment would work on a mobile phone, but it is a great example of ‘digitising’.

A lot of organisations are trying to digitise. Essentially, what they are looking to try to achieve is maintaining the way they have always worked by ‘bolting on’ a digital front end that will allow them to do it simpler, cheaper and faster... but, still essentially the same.

Effective business in the digital world of work requires a whole new way of thinking and functioning. CFOs cannot evaluate requests and strategic options using the same frames of reference or data as before.

CFO MAGAZINE • CFO.CO.ZA

41

BUILD A BETTER FUTURE

Companies that are driving the changes in society towards this digital world, tend to share eight common elements that sit at the centre of their business models and ways of functioning. As we consider what a digital business model − not just a digitised analogue model − may look like for our organisations, these eight areas are the starting point for that discussion and strategic shift.

Make no mistake: success in the digital world requires a new way of behaving. The analogue past may function for a few more seasons, but any business that doesn’t make the shift is ultimately staring down the barrel of redundancy. CFOs are key enablers of the decisions that need to be made to make this change.

1. Personalisation Coca-Cola got it right when they allowed people all around the world to buy a can of soda emblazoned with their own name. The level of personalisation was mind blowing and people all over the world made a point of buying a can with their own name on it. The rest of the branding remained, the product inside tasted the same... nothing changed except the deep level of personal connection with the product. It was not only an act of marketing genius but also a reflection of the power of digital business.

2. Automation Artificial Intelligence is moving and growing in leaps and bounds.

42

CFO MAGAZINE • CFO.CO.ZA

Facebook recently decided to speed up the process at which some of its AI was developing by having two versions of the same AI speak to each other and use the interactions to iterate their development. They ended up having to shut the project down, because they forgot to tell the AI to work in English. The two programmes quickly developed their own language and were developing and evolving their code in a way that the external human observers were not able to understand.

There are many functions within our organisations that no longer need human intervention to make them possible or effective. Even in the nascent stage of development that AI currently is in, there are things that technology can do more effectively than people. We need to allow that to happen, and then rethink what we do with the capacity it opens up within our people. The answer to the benefits of AI is not retrenching and downsizing, but cross-skilling and redirecting our human resources.

3. Ease of use Machines were not always easy to use. The reason we developed professions around them is indicative of the complexity inherent within them. Digital technology is exactly the opposite. It is built from the beginning to be simple to manage, intuitive to understand, and not need advanced knowledge to use.

Too many business models are based on the assumption of spe-

cialist knowledge sitting within the business that needs a specialist or professional to use the associated technology. In the digital world of work, everything is being simplified. Increasingly, anybody can do anything and the digital tools used in work are specifically built to limit or negate the need for specialist support.

4. Mobile first In the modern world, the one thing that is never more than an arm’s length away from anyone at any time is their mobile device. More and more of our daily tasks are being automated and enabled by our mobile phones.

In the ‘old days’, we would tailor our digital engagement for the web, and tag mobile functionality on as a value add. Today it is the other way around. Modern digital clients expect to be able to conduct all of their core business with an organisation via a mobile platform and are happy to go to a website for secondary or ancillary functions. Mobile-first means that we start our build and design work in the mobile space and migrate to other channels from there.

5. Social/sharing Whether it is using Tripadvisor to plan a vacation, choosing an Uber driver based on ratings, or being picked up by an Uber driver based on our ratings as passengers, or a host of other services, today’s digital customers use social networking and sharing platforms to support, inform,

BUILD A BETTER FUTURE

do it for them. Banks, insurance brokers, librarians, teachers… so many functions that we can now do directly using technology and automation.

As the digital revolution removes this intermediate layer of value, we need to realise that it isn’t generating redundancy but rather, the opportunity to refine the value that people bring to a process. For example, capturing information for clients can now be done online without our input.

This means that we now need to reutilise the time that would’ve been spent doing that to benefit the client with a human interaction or service. Digital organisations are pulling more and more of these ‘time-sink’ functions into the digital sphere.

8. Constant upgrades

and drive many commercial decisions.

6. Gamification In their book ‘Got Game’, Howard Beck and Mitchell Wade identify six values that digital games have developed in the gamer generation: sociability, competitiveness, flexibility, multi-tasking, arrogance and insubordination. Gamification means moving beyond bringing fun and play into corporates, and really engaging the value system of this generational cohort.

Understanding the depth of Gamification requires a separate article on its own, but every CFO needs to understand the underlying social dynamics at play as they make decisions to enable their organisations to function effectively in the digital world of work.

7. Removing the middleman (Disintermediation) Whole industries have been built on the legacy that there were certain things that individuals were not able to do themselves and they needed an intermediary to

In an industrial world enabled by machines, it was important, if not critical, to make sure that everything worked 100 percent before flicking the switch and turning on the machine. If one part didn’t work, the whole machine could be compromised and not function to specification.

This is not the case in the digital world.

Look at the app store icon on your mobile phone and see how many updates are waiting for you to pull them down for the apps on your device. In the digital world, we move when something is good enough and then upgrade and update it on the fly. In the digital world, perfection is the goal, not the starting point. l CFO MAGAZINE • CFO.CO.ZA

43

BUILD A BETTER FUTURE A conversation with Finance Indaba Africa 2017 keynote Stan Slap

How to achieve the GREAT thing Pulling off big projects is exhilarating, exponentially growing your profits is awesome, but are you achieving the GREAT thing? Are you building a better future? We spoke with Stan Slap, the world’s foremost thought leader on culture and leadership, who will be opening the Finance Indaba Africa on 12 October 2017.

“

While making profits, delivering on big projects, and improving the share price of a company are all good things, leaving a legacy impact on the lives of the human beings that helped you to achieve those good things is a great thing,” says Stan, who was immediately captivated by this year’s Finance Indaba theme ‘Build a better future’ and agreed to be the keynote for Africa’s big-

Stan Slap, speaker at Finance Indaba Africa 2017 44

CFO MAGAZINE • CFO.CO.ZA

gest conference and expo for finance professionals.

The culture guru from California is travelling to South Africa with the support of Finance Indaba exhibitor ClarkHouse Human Capital and its inspirational founding MD, Roy Clark. Stan has a powerful message and a bag full of good, sometimes unusual, ideas to discuss with finance professionals during the event in the Sandton Convention Centre.

“You don’t have to give up the very good things to get the great thing, but you have to want the great thing − and that’s what makes a top-notch professional.

They WANT the great thing.”

Leaders and ambitious professionals should know that they are the chief cultural officers, argues Stan, who has built a unique career advising the planet’s big corporates about their people and their culture, winning raving endorsements from global executives from companies like Apple, Microsoft, Intel, Deloitte, and Vodafone.

Eye on culture “True leaders may delegate some of the functions, and that’s understandable in a large enterprise, but they are never that far away from keeping an eye on the culture,” says Stan. “That is because the performance of leaders is ultimately judged by their legacy. It is not what happens while they’re at the company that is most valuable but rather, whether their impact on the company is sustainable after they have left.”

During what is expected to be a knockout presentation at the Finance Indaba, the corporate strategist from the United States will share more of his insights on GREATNESS and a ‘people first’ approach with the 5,000 finance professionals who are expected to attend, many of them chartered accountants and other top professionals who are shaping the future of the country. For this interview, Stan took the time to explain the concept of culture as a living organism – a very powerful one.

BUILD A BETTER FUTURE

“There are many, many misunderstandings about what defines a great culture,” says Stan, whose San Francisco-based company goes by the name SLAP. “I think people expect me to say that a great culture is a happy culture.

Of course, it is nice if your culture is happy, but a great culture is a COMMITTED culture. And the commitment of your culture can be measured by any metric you use to measure the business. There is no financial metric that is not in the hands of your employee culture. Your employee culture has the first vote.”

Key to success Stan explains that there is a massive difference between managing

employees, managing managers, and influencing customers. And when those groups start forming relationships within a company, they stop becoming managers, employees and customers and they start becoming cultures within your organisational ecosystem. “The key to success is recognising that you are not simply managing a group of managers, employees and customers, you are now managing that belief system,” says Stan.

His philosophy is that a culture exists whenever a group of people share the same basic living circumstances and they band together to share the beliefs of the rules of survival and emo-

tional prosperity. “A culture is remarkably resistant to standard methods of corporate influence and understanding how it works has been a key to all the success I have been able to achieve, whether it is by running a company or helping others run theirs,” says Stan, who is also a best-selling author.

Stan defines a culture as an independent information-gathering organism living right inside the enterprise that is designed to ensure its own survival. It has its own purpose and with all the power to either make or break any management plan or any manager. Its purpose is to protect itself, not the company.l

CFO MAGAZINE • CFO.CO.ZA

45

WELCOME TO OUR

WORLD

In a continuously evolving African and global business landscape, you need a partner that you can count on. One that will help you navigate your journey to be the best that you can be. Our service to clients provides solutions that add real value where it counts most – the bottom line.

Our services include the following: • External Audit • Internal Audit • Forensic Services • IT Audit and Advisory • B-BBEE Verification • Risk Advisory • Corporate Governance • Process Engineering • Secondments

+27(0)11 517 3000 nkonki.com

hello@nkonki.com

• Integrated Reporting • Fraud Risk Management • Supply Chain Management • Taxation • Project Management • Payroll Management • Fraud Hotline Services

GOVERNANCE

Mitesh Patel and Thuto Masasa are taking Nkonki to the next level

The firm of the future Mitesh Patel and Thuto Masasa form part of a new leadership team that is charting the path of auditing firm Nkonki into a new era of growth and transformation. By Ebrahim Moolla

B

lack-owned auditing firm Nkonki has always been synonymous with trailblazing. Founded in 1993 by brother and sister Mzi Nkonki and Sindi Zilwa, the second black woman in South Africa to become a chartered accountant, Nkonki was born into the turmoil of pre-democratic South Africa and faced numerous challenges, including access to funding and intellectual capital. Under Sindi’s aggressive and stereotype-shattering leadership, Nkonki would soon become one of the largest black empowerment assurance and advisory firms and the only majority female-owned auditing firm in South Africa to be accredited by the JSE to audit listed companies.

Initially focusing on auditing, today Nkonki is a full-service financial services firm with more than 400 staff members and 30 partners and directors. It has an international affiliation with Kreston International. The firm is now ready to enter a new era and

take another great leap forward under the capable leadership of new CEO, Mitesh Patel and Head of Assurance, Thuto Masasa.

Nkonki bettered last year’s turnover four months before the end of 2017, so Mitesh takes the helm of a firm that is in great health, with a vibrant young workforce and a strong cultural foundation. Assuming the role of CEO in November 2016, Mitesh has quickly instituted far-reaching structural changes. Instead of a chairman, CEO and managing partner, the group now has a CEO and heads of divisions who report into an executive commit-

“The opportunities that we got given to service Telkom and Transnet have allowed us to gain intense intellectual capital.”

tee, which is chaired by the CEO. The plan from the leadership is to keep building on Nkonki’s strategy and to expand its lines of service to encompass all industries. Mitesh, who describes himself as an “ambitious but approachable leader” is also intent on continuing to develop the firm’s tightly knit team, knowledge base and agility, while simplifying current working arrangements and implementing an open-door policy.

Constant reinvestment What sets Nkonki apart from its peers is the strategy founded on constant reinvestment and rooting out of complacency, says Mitesh. “We are a local firm with a global presence, as opposed to having a global firm with a local presence. One big differentiator for us and one of our strong value systems is that we always use the revenue we generate from our larger clients to reinvest in the business. This has been a big factor in our success. For example, the opportunities that CFO MAGAZINE • CFO.CO.ZA

49

GOVERNANCE

we got given to service Telkom and Transnet have allowed us to gain intense intellectual capital, which has enabled us to create service lines in advisory business, finding solutions within the telecommunications and freight industries.”

Mitesh Patel, speaker at Finance Indaba Africa 2017

Mitesh Patel began his studies in chemical engineering. Thankfully for the financial industry, he realised that he had an aptitude for accounting and through Unisa he went on to carve out a successful career in the financial services industry. Due to his excellent academics he was offered a bursary from Deloitte, where he completed his training. Through his drive to succeed he quickly grew to managing partner at the Pretoria office of an international brand, PKF. Eager to advance the transformation agenda, he joined Nkonki in 2007, when it was a three-member practice, and was instrumental in building the firm’s national network structure, allowing it to mitigate risk and expand rapidly. The executive has been the face of the firm over the past two years.

50

CFO MAGAZINE • CFO.CO.ZA

Thuto adds that innovation and a refreshing approach to dealing with the clients has been a cornerstone of Nkonki’s success. “We want to live up to our tagline: “Experiencing Ingenuity.” The pillars of our culture are to be impactful, inspirational, insightful, ingenious and to perform our duties with utmost integrity,” she explains. “We expect our staff to have an impact on their clients and be ingenious in their service delivery. We have made largescale investments in developing our methodologies and tools, including technology, as quality is at the heart of our business.

We are very sensitive around our clients from a project management perspective, therefore we have put appropriate mechanisms in place to ensure delivery.

Many people rely on the work we do, so quality management is a robust process, at all levels of our staff. We ensure that we’re very responsive at the client level and provide reliable solutions.”

Opening doors As a black-owned firm on the periphery of an industry dominated by the big four firms, Nkonki has found its access to

GOVERNANCE

“The pillars of our culture are to be impactful, inspirational, insightful, ingenious and to perform our duties with utmost integrity.”

the private sector limited by the wariness of corporates to enlist an up-and-coming firm, says Thutho, an outcomes-based leader with a passion for women empowerment. “We are finding that there are doors opening up in the private sector, just not as fast as we’d want them to,” she says, emphasising that the firm is highly appreciative of the opportunities it has been given by its current private sector clients. She says the impatience to do more great work is a sign of ambition, rather than frustration.

“Supporting a homegrown brand doesn’t mean you are taking a risk, which at the moment is the perception out there. We would like to change this perception by ensuring we continuously deliver excellent work for our current private sector clients.”

market confidence that large market cap companies can rely on the quality and capability of local black firms. It allows firms such as Nkonki to further invest and develop its staff through intellectual property and thought

leadership it gains as a result of clients such as Telkom. It creates better opportunities for our staffing complement, either through retention or opportunities to be placed in significant positions in the market place.”l

University of KwaZulu-Natal alumnus Thuto Masasa is one of the foremost young accountants in the country and one of the leading practitioners advising South African organisations on the development of integrated reporting. After a stint at Deloitte South Africa and London, and a two-year sojourn in the firm’s global learning and development department, she joined Nkonki and became an audit partner in September 2012. The 37-year-old beat thousands of her peers to win Young Accountant of the Year at the 2016 International Accounting Bulletin and The Accountant Awards after clinching the Integrated Reporting Award the year before. She has used this as a platform to expand her role as a thought leader on a global scale.

The pair agree, however, that they are optimistic about growth, as skills development and the addition of intellectual capital are opening up opportunities in the market and companies become more amenable to medium-sized enterprises. The mandatory audit firm rotation will also provide the opportunities to continue to build the firm of the future.

Mitesh adds that the Telkom audit, which Nkonki has been tasked to conduct in conjunction with EY, has been a breakthrough. “This is a big step for the profession as it shows the

Thuto Masasa, speaker at Finance Indaba Africa 2017

CFO MAGAZINE • CFO.CO.ZA

51

GOVERNANCE

A chat with David Thomas, co-founder of the barnstorming South African startup ThisIsMe

The compliance opportunity As custodians of accountability, CFOs are under pressure to balance agility with watertight compliance with an increasing number of regulations. Disruptive digital solutions can help businesses avoid fines and fine-tune compliance, while also improving service levels and the bottom line. They can do this by onboarding customers more quickly, easily and cheaply than ever before, says David Thomas, co-founder of ThisIsMe.

T

he world is getting more complex, risks are increasing and criminals are getting smarter.

Policymakers and regulators have responded to this by beefing up Know Your Customer (KYC) regulations and laws that protect people’s privacy. In South Africa, the Protection of Personal Information Act (PoPI) and this year’s amendment of the Financial Intelligence Centre Amendment (FICA) Act are on the minds of many executives.

Some of the best CFOs have recognised that the convergence of the digital revolution with the ever-increasing compliance burden can be an opportunity for their businesses to gain a competitive advantage. Rather than seeing regulations as expensive stumbling blocks, they understand that the rules are there for

52

CFO MAGAZINE • CFO.CO.ZA

a good reason. Digital compliance tools can assist in streamlining business processes and they can be catalysts for change for businesses looking to establish a more customer-centric culture.

“Implementation of digital solutions to deal with compliance challenges is often a lot more affordable than executives expect,” says David Thomas, co-founder and Head of Product at ThisIsme, the fast-growing Cape Town-based disruptive startup that helps businesses to reduce fraud, automate KYC, improve onboarding and increase revenue while providing an on-demand, seamless customer experience.

Freeing up finance To date, the process of establishing and verifying the identities of clients has largely been paper-

based, with clients having to arrive at a bank branch, for instance, for face-to-face identification. This tedious process of FICA onboarding has increased costs for institutions to between R300 and R1,500 for each client.

“By taking those mundane and cumbersome tasks away from your finance team, its members can focus on activities that add more value to the business. We can check millions of requests to verify an address within half a day,” says David, adding that the verification results will be accurate whether someone filled in ‘main road’ or ‘hoofstraat’ or made a spelling error.

ThisIsMe specialises in providing comprehensive KYC solutions to businesses. This involves customer identification and onboarding, along with customer due diligence solutions. Business

GOVERNANCE

nise compliance. “Negotiations with clients that used to take 12 months are now reduced to as little as six weeks before we start integrating our solutions,” says David. “Gone are the days of people having to scrounge around for more copies of their IDs and proof of residence. Digital verification is significantly increasing the speed of doing business.”

Risk-based approach One of the crucial differences with previous iterations of FICA, is a shift from a rules-based to a risk-based approach. This means accountable institutions must consider the potential risk involved in establishing a business relationship with a client.

The intention of the new regulations is to combat financial crimes such as money laundering, terrorist funding and fraud.

David Thomas, speaker at Finance Indaba Africa 2017

“By taking those mundane and cumbersome tasks away from your finance team, its members can focus on activities that add more value to the business.” has boomed on the back of the Financial Intelligence Centre Amendment (FICA) Act 2017, which was signed into law in April. “The participation process in parliament was very soundly run,” says David. “The right questions were asked and industry

“The changes in the Act have caused a major disruption in the market, but have also accelerated the adoption of digital solutions. For many, FICA had become a four-letter-word.

That is a perception that we are changing,” says David. “It has added a lot of complexity, as each accountable institution has a different risk appreciation. For a service provider like ThisIsMe that means we cannot offer a one-size-fits-all solution to our clients. We have an amazing development team that approaches a client’s unique challenges from every angle.”

organisations have contributed.

All you can ask for is that politicians listen to the market and that has happened.”

Focus on individual

The clarity that the law has created has provided a boost for businesses looking to revolutio-

Of course, ThisIsMe is not the only player in the industry, although the company’s approach to identity verification CFO MAGAZINE • CFO.CO.ZA

53

GOVERNANCE

“The most-asked question for our team was: does it really work? Not only is the answer to that ‘yes’, but we can also prove it, in real-time, during the Finance Indaba.”

seems to have struck gold, with an impressive growth projected for 2017 and some mega-projects in banking and other industries in the pipeline. Individual customers can take full control over their identity data, explains David, when asked what makes the Cape Town-based business unique. “One of issues that has plagued the industry is that anyone can submit documents, but it is important − especially with the PoPI Act in place − that individuals have the right to opt in or out of identity verification. We are focusing on the individual, without alienating the compliance departments of the corporates we work with.”

ThisIsMe has developed a custom method of verifying the identity of an individual, in which it places a micro-deposit into the individual’s verified, pre-FICA’d bank account. This deposit carries a unique reference which is returned by the individual, in order to prove access to that account. The process is as simple as a one-time PIN, but infinitely more secure, owing to the fact that no password is held as securely by an individual as their banking password.

54

CFO MAGAZINE • CFO.CO.ZA

While the business is enjoying an incredible boom at the moment, the successful formula has been carefully crafted. “We launched in 2013 and spent the better part of two years building relationships with data providers.

The trick it to get to the data’s golden source, as we call it,” says David, adding that the company is eyeing African expansion and a foothold in countries like Australia and Singapore.

Security and encryption Sources of data now include the databases of the National Credit Regulator (that includes information from retail store accounts), delivery companies and a host of others. ThisIsMe also collaborates with blockchain and scanning innovators in Europe, tapping into the latest and greatest technologies available. “Security and encryption are foremost in our minds when protecting our customers’ identities. When you deal with sensitive information, privacy and security need to be your core business.”

ThisIsMe recently announced that is has set an ‘African record’ in handling an entire FICA application within three minutes from

scratch, including uploading proof of ID and proof of address.

David says the company is actually being modest. “We can do a lot quicker than three minutes! That is verifiable. If you already have a ThisIsMe account, you can FICA almost instantly by approving a request to verify your identity with your mobile phone.” l

ThisIsMe at Finance Indaba Africa “Business shows often don’t live up to expectations,” says ThisIsMe Head of Marketing, Brennan Wright. “The Finance Indaba Africa is an exception, so we are happy to be a part of it again this year. We exhibited for the first time at the event in 2016. Our stand was constantly busy with the right people and there was a great atmosphere due to the open exhibition space. The mostasked question for our team was: does it really work? Not only is the answer to that ‘yes’, but we can also prove it, in real-time, during the Finance Indaba.”

GOVERNANCE

Deloitte’s deputy CE Sihlalo Jordan talks about the CFO role, technology and integrity

Be a leading voice CFOs should champion the rise of disruptive technologies within their organisations, says Sihlalo Jordan, deputy chief executive at Deloitte Africa.

He chatted to our senior editor Sungula Nkabinde about finance leaders’ responsibility to promote an aligned strategy, future-focused technology, and shining integrity. “The CFO has to be a leading voice.” By Sungula Nkabinde

“Disruptive technologies can no longer be ignored and I think that the CFO is at the forefront of that development.”

CFO MAGAZINE • CFO.CO.ZA

55

GOVERNANCE

to provide that information so that decisions can be made very quickly.”

“

Every CFO is now a strategic partner to the organisation and has to be,” says Mgcinisihlalo Jordan, partner and deputy chief executive for Deloitte Africa. Better known as Sihlalo, the former leader of the firm’s financial services practice in Africa has an astute understanding of what is to be expected of modern finance leaders.

“Secondly, global geopolitical developments have made the need for faster and better decision-making more prevalent than it has ever been, and have resulted in the CFO function being intricately linked to the business of the organisation,” says Sihlalo, a chartered accountant who was admitted as partner at Deloitte in 2007 and also holds a banking law diploma.

A number of things have happened over the last few years that have thrust CFOs into a position at the forefront of change, Sihlalo notes. “Firstly, disruptive technologies can no longer be ignored and I think that the CFO is at the forefront of that development.

He or she should be championing the rise of disruptive technologies and how they are embraced within the organisation.”

Real-time information CFOs can no longer be satisfied with sitting back and reporting at the end of the month or the end of the financial reporting period, says Sihlalo. “Business leaders of divisions and CEOs now want real-time information regarding product development and product performance. You cannot have a CFO that is not strategically aligned. You need to be able

Deloitte runs a number of CFO programmes and surveys, including the highly respected CFO transition labs. The firm also has a programme called ‘next-generation CFOs’ for a select group of young but developing individuals who are earmarked to become group CFOs at some point in their careers. During any of these programmes, technology and its opportunities is pivotal, explains Sihlalo, who served on the Deloitte global advisory council in 2010-2011.

“Disruptive technology is a fascinating topic and, depending on who you speak to, it’s either an issue or a non-issue,” says Sihlalo.

“There are some people who believe that this is a fad and that things like artificial intelligence (AI) are only going to become a practical reality at some point in the very distant future after they have retired. Their argument is that it’s a slow-burning fuse and that some of these technologies, while great in concept, have no practical applicability for the CFO role today.”

Winners and losers Sihlalo has pinprick-precise views on the topics himself. “My own school of thought is that the big bang has happened already and

“The strength of capital markets is dependent on our ability to uphold the highest levels of integrity.”

56

CFO MAGAZINE • CFO.CO.ZA

GOVERNANCE

we’re slowly going to start seeing some organisations emerging as winners and others as losers. I see the whole concept of disruptive technologies in two buckets.

There are those that are only there to improve your core and there are those that are there to transform your organisation.”

No longer can a CFO operate without considering what cloud technologies and web-based applications can do for their organisation, says the Deloitte deputy CE. “Being able to provide real-time information at the fingertips of the organisation, whether it’s the CEO, the rest of the executive or even the board, is crucial. Analytics have to form part of any insight-

driven organisation. It should be able to provide the right information at the right time in order to maximise the efficacy of decision-making.”

According to Sihlalo, cloud, realtime information and analytics very much belong to the core of what businesses should focus on.

“The CFO has to be a leading voice in terms of how those technologies are incorporated now; not for purposes of growing the organisation to any great length, but just to keep up with what you need to be doing on a daily basis.”

Machine learning Besides the core, there is a group of what Sihlalo calls disruptive technologies, which can really

transform business models.

“Examples of that would be blockchain and AI. CFOs should be thinking about machine learning, not only in terms of how it can improve the effectiveness of their current financial operations but also in so far as the extent to which they can transform them altogether.”

CFOs have to realise that AI is going to change the speed and cadence of their processes completely, says Sihlalo, though that is just the tip of the iceberg. “AI will also create new processes and it can give rise to new products or business models that are completely different to what the company has been doing in the past.” l

Integrity: CAs should lead from the front South Africa is undergoing a tumultuous period of uncertainty at the moment. CFO Magazine asked Sihlalo Jordan what role CFOs can play in nation building and ensuring that their companies contribute to advancing some of our national imperatives, like transformation and inclusive growth.

“There has to be a realisation that we operate in a unique country,” says Sihlalo. “I can’t think of a more complex operating environment than I’ve seen in South Africa. A CFO has to recognise that and must understand the role that he or she plays beyond their organisation in building talent, influencing public policy development and contributing to the monitoring and evaluation of governance progress. Those are three easy examples of where a CFO can play a leading role.”

“In addition, we have realised that our profession − as

CFOs, finance leaders and particularly as chartered accountants − is currently under scrutiny for a number of reasons.

The criticism we face as a profession is not always merited, but when you are in the spotlight, you have to respond. So, I urge CFOs to remain committed to operating with integrity and to stay true to the values of the profession. We cannot break the trust that the public has given to us and the various organisations that we lead.”

“We cannot afford for that trust to be eroded any further, because the strength of capital markets is dependent on our ability to uphold the highest levels of integrity. So, rather than being on the back foot and on the defensive as we sometimes are in this profession, we should be taking the baton as saying ‘we will lead from the front’. We have to demonstrate why this is such a virtuous profession in terms of being a shining example of integrity and business leadership.”

CFO MAGAZINE • CFO.CO.ZA

57

GOVERNANCE

CEO Etienne Nel celebrates the disruptor’s anniversary

ZAR X: Taking stock This time last year, South Africa’s first new stock exchange in several decades got underway. The brainchild of Etienne Nel, Geoff Cook and Graeme Wellsted, ZAR X has given the industry a huge shake up, though it hasn’t all been smooth sailing. We sat down with CEO, Etienne Nel to find out how things are going. By Toni Muir

“

Quite simply, this time last year we were on the edge of our seats awaiting the outcome of the licencing process. We were awarded the first new stock exchange licence in almost six decades,” says Etienne Nel, ZAR X CEO, when asked how the past year has been for him. “That was the highlight, without a shadow of a doubt. A close second was the go-live of our first listing,” he adds. Nel says the past year has been particularly rewarding in the sense that, once the licence and application process was dealt with, the team could get down to “actually operating the business, which was great”.

Indeed, it was a year fraught with difficulties and Nel says that

58

CFO MAGAZINE • CFO.CO.ZA

challenges came in many different forms. “The biggest for us was breaking the mould because, having had an exchange like the JSE operating a monopoly for 60-odd years, people didn’t really understand the impact that has. For us, one of biggest challenges was the educational aspect of what we are trying to do here, to get people to the point where they understood that this was different and could actually work. I’m talking here about the market – investors, the banks, the brokers, asset management firms – everyone was asking if this was possible.”

“This is why our first listing, Senwes, was such a big milestone for us, because seeing is believing. People saw that we could

onboard a listing and settle a trade within ten seconds. But, the educational component is playing a significant role and, I must confess, I underestimated the enormity of that role in our operational life.”

Getting going The new exchange’s first listing was agricultural company Senwes. Nel explains how this process went: “With Senwes, we engaged with them and presented to the board, and met

GOVERNANCE

Etienne Nel, speaker at Finance Indaba Africa 2017

their executive team. I don’t think that’s something which the current exchange has ever done – pitched for business. If you think about it carefully, the assumption when people spoke about listing was listing on the JSE, because there was only one exchange. But now there’s a second exchange and companies suddenly have to consider where to list, and what they wish to achieve with their listing.”

“Senwes was quite comfortable.

The company’s ethos is breaking new ground, and, as a large agri-business, they are very innovative and open to new ways of doing things. There was almost a meeting of cultures because, at ZAR X, we always ask why not, and it’s these sorts of things that put a solution on the table for Senwes. Senwes’ share register was already in an electronic format and they were already reporting in IFRS, so we were able to do all the paperwork, onboard the register and have every-

thing up and running in under a month. This shows you the speed at which we can move. Once we receive a listing prospectus, we can onboard a listing in four to six weeks. That’s a big differentiator, especially if you consider that a listing on the JSE can take upwards of nine months.”

Swing of things To date, ZAR X has listed three companies – Senwes, Senwesbel and TWK Investments, with discussions currently underCFO MAGAZINE • CFO.CO.ZA

59

INNOVATING FOR FINANCIAL ACCESS FINANCIAL INCLUSION Making the capital markets convenient. Affordable. Fair.

Putting investment back where it belongs: in everyone’s hands.

Your share of tomorrow www.zarx.co.za / info@zarx.co.za

GOVERNANCE

way with several more. Nel says things are going really well for the recently listed entities.

“Since Senwes listed in March, their share price has gone up 14 percent. Its holding company, Senwes Beleggings (Senwesbel), is a restricted share – something ZAR X pioneered – and its share price is up around 5.5 percent. TWK, also an agri-business, which listed in June, is also up 5.5 percent on some fairly robust volumes.”

ZAR X also breaks new ground by operating a ‘restricted market’, Nel explains, in which holders of B-BBEE shares can realise value after participation in empowerment structures.

“Until now, B-BBEE structures set up by, particularly, large corporates, have been debt-financed and have limited lifespans (five to seven years), during which BEE shareholders gain no economic benefit,” he says. “At the end of the period, shareholders are paid a once-off dividend based on the growth of the value of the parent company’s shares. Their participation in ownership of the company ends when the structure is discontinued.”

There is no opportunity for the BEE beneficiaries to actually buy shares in the structure in their own right – on a retail basis, Nel says. ZAR X’s founders pioneered the concept of BEE in perpetuity, which now makes this possible, along with making it affordable for brokers to do the small transactions that would be involved. “Transformed companies are therefore able to

“Through all the legal challenges, our processes and our listing requirements were not found wanting in any shape or form. So, this actually strengthened our resolve.”

retain or enhance their empowerment profile in perpetuity. The restricted market can also be used by other types of businesses that wish to apply particular criteria to share ownership,” Nel says.

Newsworthy The team is “delighted” with the progress they’ve made thus far, says Nel. “On the back of these listings we’ve seen the brokering fraternity starting to sign up and we’ve had more companies come to talk to us about wanting to list,” he adds.

ZAR X has also been approached by several JSE-listed entities considering transferring their listing from that bourse to this one, which Nel calls “pretty newsworthy”. He says: “Up until now you could only delist from the JSE. In a transfer of listing environment, investors’ rights aren’t being prejudiced, so you now need to set up a regime that

allows for the transfer of listing.

We are in discussions with the Financial Services Board (FSB) in this regard.”

Asked about their strategy to grow the client base, Nel says it was almost a case of people needing to first see it, before they could believe it. “Now that people understand how we operate, and have seen that the risk in the ZAR X environment is very limited (because there’s very little settlement risk), their interest is piqued,” he says. “We are not listing dodgy companies. Senwes is a significant organisation – they do R10 billion revenue. Likewise with TWK, which does R6 billion in revenue. So, the markets have taken comfort in the fact that there’s low settlement risk and that the listings we are doing are getting traction very quickly.”

Putting up a fight The ZAR X team has had to don the proverbial boxing gloves on several occasions over the past year, defending the company against the JSE and another new stock exchange trying to gain a foothold, 4 Africa Exchange (4AX). In June this year, 4AX filed a review application with the high court – the third time that it has attempted to press legal proceedings upon ZAR X. Its prior attempt in January this year saw the FSB Appeal Board, chaired by retired judge Louis Harmse, deliver a comprehensive judgement dismissing the allegations that 4AX is now seeking to have reconsidered by another court.

Nel comments on the matter: “The legal proceedings were, in

CFO MAGAZINE • CFO.CO.ZA

61

GOVERNANCE

my mind, put to bed very succinctly by Judge Harmse, as we won the February judgement unequivocally and with punitive costs. The judge felt that the JSE and 4AX were wasting the appeal board’s time. He also anticipated someone taking the matter on review and actually addressed this in his ruling, saying there was a slim chance of it succeeding. While 4AX took it on review, the JSE decided not to pursue it any further.”

Nel says he believes the JSE was somewhat misguided because ZAR X operates on a completely different settlement regime with a different set of rules. “While, from an industry perspective, JSE CEO Nicky Newton-King’s point of saying that a proper policy framework should have been in place was valid, I think it was misguided against us. Our settlement model is so fundamentally different. We wanted to mitigate risk, not add risk,” he says.

There is some light at the end of the tunnel, at least, Nel says: “Through all the legal challenges, our processes and our listing requirements were not found wanting in any shape or form. So, this actually strengthened our resolve to say they don’t understand our model and made us again realise that we needed to educate the industry.”

Surging ahead According to Nel, when the ZAR X founders first set out on this journey three years ago, they had a certain vision in mind, though he says they perhaps “under62

CFO MAGAZINE • CFO.CO.ZA

estimated the desperate need for an alternative capital raising platform in the South African market”. The market has “absolutely inundated” ZAR X with requests to do new and innovative stuff, Nel says. “In many instances, some of the solutions that are being put on the table have been around for a few years on the international arena, yet for whatever reason, they haven’t filtered through to the South African capital markets,” he explains. “We talk to people and we’re at the point where we have to sit back and say, where’s the lowest hanging fruit, because it’s become that overwhelming. It’s been rather humbling to see the response from the capital markets and how people are embracing the openness that we have to new ideas.”

“It’s been rather humbling to see the response from the capital markets and how people are embracing the openness that we have to new ideas.”

Asked what the remainder of 2017 holds, Nel says new listings, and hopefully lots of them: “We’ve got a financial services sector listing in the pipeline and potentially another agri listing.

We’ve also got some preference shares in the pipeline and we’re talking to two BEE structures that are doing some very interesting stuff. Hopefully those will come through during October or so.

Most of these new listings will be live before the end of this year.”

Nel says the number of enquiries the company is receiving for listings is doing well to energise the team. “We’re going at 100 kilometres per hour. We’re averaging three to four brokers a month joining us, which is driving demand,” he says. “We are hav-

ing a lot of conversations that are triggering some excellent ideas.

It’s great. Personally, I relish this challenge.” l

EN 2017 & 2018 REGISTRATION NOW OP “The Financial Modelling course is a must for anyone who wants to discover the power of financial models and excel and use it” - Brian Mthembu, Standard Bank

Follow a Financial Modelling Course CFO.co.za/Training Financial modelling fundamentals course is a three-day, entry level course that focuses on the core principles essential to building efficient, effective financial models.

What this course offers: - Financial modelling fundamentals is a three-day, entry level course that focuses on the core principles essential to building efficient, effective financial models; - Tailored to meet the modelling needs of all aspiring first time financial modellers; - An in-depth understanding of spread sheet engineering – 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; - Hands on experience in building a complex model from first principles; - Analysis of the model output – understanding the insight; - Model output analysis consisting of returns and ratios, sensitivity analysis, scenarios, data tables; - Finalising and protecting the model.

REGISTER TODAY Contact Sarah Chalmers (schalmers@cfo.co.za) for more information and to secure your seat today.

EMPOWERMENT HR executives tackle transformation at inaugural CHRO SA master class

Elephant in the boardroom “Transformation, as a whole, is a big elephant in the corporate boardrooms of many companies in South Africa and very few executives feel comfortable talking about it.” These were the words of Cebile Xulu, HR Director at Mondelēz International, who was a panellist at CHRO SA’s first master class on 26 July 2017.

T

ogether with her peers and led by the inimitable Didi Sehume, community manager of CHRO South Africa, Cebile discussed why the HR profession had failed to address transformation in South Africa.

As an example of how individuals can stifle transformation, Cebile gave an example of a time when she attempted to recruit an HR business partner for a male-dominated environment where the supply chain director rejected the candidate because he was gay.

“There is no organisation that will openly say it does not want to transform,” Cebile said. “Every single company wants to be diverse and inclusive. But when you get into the companies, the individuals in that business have biases and prejudices that preclude certain groups of people from feeling included and/or excelling within those companies.”

Frank Mhlo Ntshangase, human resources director at Saint Gobain

64

CFO MAGAZINE • CFO.CO.ZA

The event, which was sponsored by Workday, saw some of the country’s top HR execu-

tives come together to exchange ideas about their role in advancing the national transformation agenda in what was a frank discussion about the failures and successes of corporate South Africa in its pursuit of diversity and inclusivity.

Alongside Cebile on the panel was Ashburton Investments’ Global Head of Talent Acquisition, Tshidi Khunou, who said that it was impossible to ignore individual biases within recruitment. This was why they introduced a process whereby, when providing feedback after interviewing for a post, recruiters were required to describe candidates based only on their answers to the interview questions and their ability to do the job. They were not allowed to mention the race, gender or even the appearance of the candidate.

That eliminated a lot of biases

EMPOWERMENT

Ditiro Chesalokile, human capital manager at Royal Bafokeng Holdings

because recruiters had to think about what the person said and not what they felt about a particular candidate.

The change made the recruiters have to clear their minds before their reported back about interviews, Tshidi explained.

One recruiter said the value of going through the process was that she realised where she had switched off during the interview.

And most recruiters will tell you that there are times when a candidate can say something that puts you off the rest of the interview. “This alternative way of doing things forced our recruiters to pay attention beyond that point and listen to the content of the rest of their answers. What happened was that, during those debriefing sessions, recruiters tended to change their minds about their impressions of certain candidates.”

Khosi Matshitse, group executive human capital at AECI

Unapologetic The HR execs at the master class, which ended up being more of an open conversation among peers than a panel discussion, agreed that it was the CEO’s responsibility to champion transformation as the leader of the organisation, but that it is the HR executive who must bring it to the boardroom and make it an important agenda item.

Donald Khumalo said that HR leaders have to be unapologetic about pushing the transformation agenda within their companies, irrespective of the perceived tension and awkwardness it creates. He talked

about an experience at a previous company where he spoke up about how, over a five-year period, the white graduates in the company he was working at had accelerated faster than their non-white colleagues.

“Why be apologetic about asking ‘what’s the difference?’ These graduates all came from the same university, the same class of engineering. So why is the system promoting white graduates faster than black graduates?’ You have to ask those questions. We need to go back and start digging deeper to look at the systemic barriers to the transformation of the organisation,” said Donald. l

CFO MAGAZINE • CFO.CO.ZA

65

EMPOWERMENT IDC CFO Nonkululeko Dlamini and FM Nozibele Tshobeni explore the role of mentorship

Uplift and empower “I feel it is a requirement for CFOs to uplift and empower younger employees,” says Nonkululeko Dlamini, chief financial officer at the Industrial Development Corporation (IDC). “CFOs should be the most approachable people in the business.” By Judith Kamffer

“The best mentor relationships are those that start organically, because people are drawn to people that they see something in.” says Nozibele Thobeni, senior financial manager at the IDC. We spoke to Nozibele and her boss, CFO Nonkululeko Dlamini, in the margin of CFO South Africa’s annual Women’s Dinner (see page 70) which brought together finance leaders and their mentees. It turned out to be a lively conversation, with the two often encouraging each other.

When asked about their mentor-mentee relationship, Nonkululeko said she is inspired by the willingness of Nozibele and other younger employees like her to learn and openness to be placed into new and uncomfortable situations and environments. “I nominated her as my nominee, because she had not requested mentorship from me,” she laughs.

It doesn’t take training to be a mentor, says Nonkululeko.

“Instincts drive mentorship. I am not trained to be a mentor and I may not always be able to help,

66

CFO MAGAZINE • CFO.CO.ZA

but I can refer someone to an individual or group of people in my network who is able to help, she says. “Mentorship is about sustainability. As we move forward – working ourselves out of our roles, so to speak – we are able to create stable teams through a process of mentorship.”

Guide and assist CFOs are chief stakeholder relationship managers and their position simply requires looking after younger talent, says Nonkululeko, who is uncompromising about the duty to guide and assist. “I feel it is a requirement for CFOs to uplift and empower younger employees.

In some instances, we shouldn’t

“As we move forward – working ourselves out of our roles, so to speak – we are able to create stable teams through a process of mentorship.”

allow people to stumble in areas where we have the ability to help. It is important for your team to know that there’s someone to talk to. CFOs should be the most approachable people in the business.”

Nonkululeko says she has benefited from many mentors herself and recalls that when she joined Eskom as a management accountant early in her career, divisional executive Mpho Letlape was the friendly face that made all the difference. “Through working together, a relationship developed,” says Nonkululeko, for whom Mpho grew into an important mentor and confidante. “Today we’re a group of ladies who meet regularly at her house. She has a passion for developing women and bringing women together to lean on each other. She is someone I can go to, although she’s not a finance professional. She’s a phone call away. So, we had never initiated this relationship. It grew naturally. It is mentors like her who had identified something in me,” says Nonkululeko, who later became senior general manager at Eskom.

EMPOWERMENT

“She has a lot of energy. When I’m working on Sundays or after hours, I can be sure that Nonkululeko is also working.

We’ve worked together on a few projects and I’ve learnt so much from her already. She’s the boss lady. She takes control and this is very inspiring to witness as a woman.”

Nozibele says that from the mentee’s perspective, it is crucial to be close to your mentor to gain the same confidence and skill set. “You can’t hide.

Mentorship brings you closer to the people you aspire to be like.

As someone who’s not in the CFO position yet, I don’t necessarily know how to get there or what the next step to take is. Having a mentor, someone whose been there and can see the bigger picture, helps you decide what the next steps are.”

Nonkululeko Dlamini and Nozibele Thobeni

Nonkululeko has some great examples about how guidance from good leaders can help talented finance professionals grow, referring to her special relationship with various leaders who had an open-door policy and made it easy to interact and deal with challenges. “I had messed up a report. And I’ve always believed in reporting my mistakes. So I went to the Eskom CFO, who was Bongani Nqwababa at the time, and confessed my mistake. He just laughed it off. He said ‘these things happen’. Out of this conversation

a mentorship relationship also developed. As the relationship grew I was able to ask for his advice on many other challenges.

It is through relationships and mistakes that I acquired my own personal board of support, executives who supported me during my career. I also consider my high school teacher, Nolufefe Pokiya as a mentor.”

Admirable qualities In turn, Nonkululeko has now grown into a mentor of note herself, with Nozibele praising her many admirable qualities.

For Nonkululeko, a woman’s technical skills need to be balanced with other soft skills. “You might be a very good CA but in the boardroom they’re not interested in the technical jargon. In the boardroom it is about how you present to the boardboard; communicating the bigger story with confidence. That’s why it is important to invite younger employees into the boardroom, so that they can see how the CFO is grilled by the board,” says Nonkululeko. “Mentorship allows you to identify your strengths, weaknesses and your path. It’s a broader community you create for yourself.”

Public sector Both Nonkululeko and Nozibele feel a tremendous responsibility as public sector servants.

Nonkululeko says: “For me it is important to deal with the perCFO MAGAZINE • CFO.CO.ZA

67

EMPOWERMENT

ceived complacency in the public sector. We must make sure we groom the best leadership in the public sector. The public sector is doing a very important job in ensuring that development happens. It is therefore critical to groom the best of the best female, but also male, employees.

Just imagine how it would be if the public sector functioned like the private sector at all times.”

Nozibele agrees: “I’ve always worked in the private sector, so this is my first public sector position. And I must say, I feel very fortunate that my first public sector has been with the IDC. You’re expected to know what you are doing here – just as much as you are in the private sector. But, mentorship is even more important in the public

sector because it has the role of grooming future leaders; it is the training ground for the next generation of leaders. In the private sector, you’re given something very specific to do – and that’s all you’re expected to do. Here, you’re given real responsibility.

If I don’t do what I’m supposed to do, it will be apparent to everyone.”

“It is a huge responsibility either way, ” Nonkululeko adds. “We hear about job losses in the news every day. Our responsibility as the IDC is to counter that and to create as many jobs as possible, as well as keep the financial sustainability of the organisation in mind. We need to ensure that we deliver on our mandates. This is a big responsibility that we need to take very seriously.”

Nozibele recounts talking with her team members recently about serving the nation. “I sat them down and said: ‘You have to remember that in this environment, our shareholder is not some fat cat somewhere sitting and waiting for his dividend. Our shareholder is your mother, your father, your uncle. The people of this country. That is your responsibility. You work for the people of this country. That is who your shareholder is'."

Work and family The challenges of female finance professionals are all too real for Nonkululeko and Nozibele.

Nozibele has a six-month old and says that you need to be able to juggle not sleeping at night and raising a family with your work the next day. She finds it works best when she compartmentalises her work and family life. “When I’m at work I’m focused on work. I’m present. And when I am home, I don’t think about work. I am present with my family. It’s the same for women everywhere. The demands are relentless but I am a professional.”

Nonkululeko says it is important for women to structure support around themselves and their lives. “Both your team at work and your family play an important role in supporting you – especially when a crisis arises," she says. “It’s not easy.”

Bold and courageous Nonkululeko Dlamini, speaker at Finance Indaba Africa 2017

68

CFO MAGAZINE • CFO.CO.ZA

The CFO says she doesn’t regret any of the decisions that brought her to this point in time. But she would advise her younger self to be more bold and courageous.

“I look back and say, maybe I

Bringing accounting

to life in

Government could’ve done better or more, but I think I turned out okay.” “Very okay,” Nozibele says. “Now I’m just focused on what I can do differently for my children to give them the best opportunities possible. For me it is about how I use what I know now."

Nozibele, on the other hand, says that, with time, she has learnt to be resilient. “When I was younger I had high hopes that everything would turn out the way I planned. But life doesn’t work that way. I’ve learnt to not let challenges break my spirit. So I would advise my younger self to be resilient, to stay positive, to keep going.” l

As a Professional Accountant (SA) I provide strategic leadership to the finance, supply chain, risk and governance directorates. SAIPA provides a home for public sector accountants; they help sharpen our skills and promote a high standard of public fund governance. In fact, SAIPA provides Professional Accountants (SA) in the public sector with information to guide organisations and government, by enabling their members to manage financial and reputational risk more effectively.

- Ismail Rawat, Chief Financial Officer at the Gauteng Provincial Legislature

SAIPA, helping you bring life to the accounting industry and beyond.

Visit us now to see how you can benefit www.saipa.co.za Tel: (011) 207 7840 SAIPA is ISO 9001:2008 Certified and offers members a Level 8 NQF designation

CFO MAGAZINE • CFO.CO.ZA TM

69

EMPOWERMENT

Nopasika Lila, CFO EPPF

Inge Walters and Nonkululeko Gobodo

Women’s month: female CFOs and mentees dine and discuss

Networking with authenticity How can women be more effective in the workplace? And in life? On 17 August 2017, CFO South Africa hosted this year’s Women’s Dinner at the Saxon Hotel in Sandton to provide a networking opportunity and inspirational panel discussion for women CFOs. The delegates had been encouraged to bring their mentees to the event, to share in the insights.

B

efore the seated dinner, delegates were treated to a panel discussion with insights from three successful women: Nonkululeko Gobodo, CEO of Nkululeko Leadership Consulting and one of the founders of the firm SizweNtsalubaGobodo, Aarti Takoordeen, CFO of the JSE, and Inge Walters, founder of Eve Learning.

The three women come from very 70

CFO MAGAZINE • CFO.CO.ZA

different backgrounds but what stood out about their presentations was the authenticity of their sharing. These women are not trying to fit into the mould of a successful woman, they are shaping their own success.

Inge opened the discussion with a presentation on the power of networking with authenticity.

She provided four main thinking points to encourage women to interact with one another in a

professional situation to benefit from establishing a network.

Breadth versus depth "The first thing to think about in shifting your mindset is about breadth versus depth and our willingness to have relationships with other people without it having to be intense each time," Inge said. We should develop the ability to see networking as more of an opportunity to get to know somebody and see if it could

EMPOWERMENT

Megan Pydigadu, CFO Eazi Access Rental

Aarti Takoordeen, CFO JSE Limited

lead to a deeper connection – not every connection has to lead to business, or a sale.”

from a background that includes a leading private school or articling at a Big Four accounting firm.

She also said that women are not typically comfortable with the idea of professional reciprocity – they often feel that it’s a sleazy exchange. And yet they are very comfortable supporting other women in their personal lives. So, she encouraged women to embrace this approach in their professional lives as well.

“I came from a very underprivileged background and I find that there are some white jokes and some rich people jokes that I just don’t get," she said. "My bucket list is challenged by my exposure to life. I didn’t know the Northern Lights existed until last year. But I’ve made a point of approaching that by saying, ‘This is who I am. I am anything but a private school boy.’ I am actually proud of it – I have the advantage of disadvantage as Malcolm Gladwell calls it.”

She added that networking has to be something that women see as something that they want to do rather than have to do, and urged women to stick their necks out and refer other women for opportunities without reservation.

Inge also made the point that networking doesn’t have to be about typically masculine outings like golf days but that women can lead the change in facilitating cultural or learning experiences like city walks or interesting courses as networking opportunities instead.

Northern Lights Aarti spoke about working in the world of finance when not coming

Nonkululeko discussed the challenges of trying to build a successful business while also being a parent – in her case a single mother.

“I divorced early, at the age of 34, with three children, and my ex didn’t help in terms of parenting or finance, so I had to make choices," she said. "I was very clear that I was ambitious and I wanted a career but I also had the huge responsibility of raising my children. Being a single mother is one of the hardest things you can do but I

told myself that if I sacrifice my career for them, I will regret it.

So I tried to do both those things, to find the strength somewhere, though it came at a high cost to me and the kids.”

She said that her managing partner thought she was a superwoman because she could do all these things, but she often cried herself to sleep in strange hotel rooms because she was leaving her children with her mother.

She made a point of diarising one rugby match a year, so that she could be there for her children.

“Looking back now, I still feel that I would regret it if I tried to slow down or look for better options.

You only have one shot at building the fifth-largest accounting firm.”

After the panel discussion, the delegates and their mentees enjoyed a networking dinner, with the proviso that they had to select mentors other than their own to spend the evening with – and then switch again before dessert. Emboldened by the words of the panellists, the mentees did exactly this with confidence and, it is hoped, a great deal of authenticity. l

CFO MAGAZINE • CFO.CO.ZA

71

GROWTH Telkom CFO Deon Fredericks reflects on the BCX acquisition

Details of a done deal Telkom CFO Deon Fredericks sat down with CFO South Africa to talk about the telecoms company’s acquisition of BCX, a deal with a R2.7 billion price tag. “We are very focused on what we want to achieve with BCX in the market. We are starting to see some good wins through the venture.” By Toni Muir

T

he industry in which Telkom operates is competitive and the environment is fluid and prone to frequent change, says Deon Fredericks, the company’s group chief financial officer. Because of this, it considered BCX (then known as Business Connexion) twice, the smaller company first catching the eye of the telecoms behemoth in 2006/2007, and then again in 2012/2013. Eventually, the deal proved too good to be ignored: Telkom required an ICT company to provide end-to-end solutions to corporate customers and BCX was a complementary fit.

An opportunity arises “Boundaries are blurring, with significant moves from telco

“We had combined two very different working cultures, so it was a challenge for people to work together.”

72

CFO MAGAZINE • CFO.CO.ZA

players and IT players into ICT adjacencies,” says Deon, explaining the rationale behind the acquisition. “If you consider the ICT market, you have telecoms in the middle, broadcasting on the right and IT on the left. As convergence takes place, other competitors will move into your space and eat your lunch. We reviewed the value chain and realised that to service our corporate customers better, we required IT capabilities to complement our connectivity. So, this was the strategic reason to expand the service offering to our corporate customers. We went through an evaluation process and BCX was one of the various companies we considered. When we made our initial approach to them, they were considering a deal with Orange, although that deal didn’t go through. After that they started to engage with us.”

According to Deon, the deal took almost two years to conclude. It took this long for several reasons, he says: “We are in the telecoms space, they are in the IT space.

We spent a significant amount of time considering fit, syner-

gies, cultures, and ways of doing business, and undertaking due diligence. As we operated differently, we also had to consider how and whether we would be able to align – these were some of the complexities. It took quite some time to get the transaction through the Competition Commission and ICASA, too.

This was the biggest delay in the whole process. Competitors are usually the greatest challengers to such a transaction, making cases to the Commission that if you put BCX and Telkom together they would make a so-called ‘dominant’ competitor, and may have a monopoly as a result of this. We thus had to address all of that first, as well as public interest – to limit the job losses.”

Deon, who is responsible for M&A in the organisation, says he got involved in the finalisation of the deal, focusing on ultimate strategic fit, pricing and incentives, and ensuring that this was aligned with what Telkom believed was an acceptable deal. “The challenge with any acquisition is that the other party (sellers), will always negotiate for a higher price than the

GROWTH

offer price, which mostly leads to the non-conclusion of transactions,” he says. “The additional challenge with a service business is that it’s dependent on people, so you have to ask, how key are these people and how do you incentivise them going forward to maintain the value?”

Once the dust settled In the first few months after the acquisition, there was a lot to get used to, Deon says. “We had combined two very different working cultures, so it was a challenge for people to work together. I think with maturity, the two teams got together and started understanding what we wanted to achieve.

It took longer than we would’ve liked but we have now integrated the businesses. There are always people who would disagree or not adapt, and one has to deal with this. We are very focused on what we want to achieve with BCX in the market. We are starting to see some good wins through the venture.”

Deon says they had to take a specific approach when bringing the two entities together. “We said, firstly, let’s establish a new management team. So, we took the best of BCX and the best of Telkom, and we then brought in some new skills. This is currently a work in progress. There’s always the risk, when you change the way people have done business, that things will be difficult.”

Communication is very important, Deon says, adding that, in hindsight, they could have done better in this regard.

Deon Fredericks, speaker at Finance Indaba Africa 2017

Post-acquisition, the landscape is different to a few years ago.

The current economic environment has not helped either. Also, corporates are investing less and

CFO MAGAZINE • CFO.CO.ZA

73

GROWTH

“Things are changing fast, people want you to slow down, but the market, the customers and your competitors don’t slow down.”

want more for their money, Deon says. “They want more for less.

The result is that corporates want voice at significant lower prices. If connectivity is your only product, giving significant discount are difficult. But, if you’ve got a basket of solutions, you have more flexibility with your pricing and can make up the shortfalls on some products with other products – obviously within Competition rules. This makes us more competitive. We are currently the only provider who can provide a one shop, end-to-end service.”

Lessons learnt Deon’s advice is: Make sure the strategic rationale to make an acquisition is sound and that the target company has the capabilities being sought; do not rush a transaction because if you don’t undertake a proper due diligence and unpack everything to your satisfaction, you will struggle later on. He says: “As people always say, you can’t go into too much detail but the devil is usually in the detail.” And, when it comes to expectations, it is important to ensure you align these upfront, he adds: “You will always have disagreements but at least you can agree on the frameworks, how you would manage the business and how the entities would integrate.”

When it came to integration, a lot was learnt, Deon says.

“Integration is never easy. We could’ve done much better in

74

CFO MAGAZINE • CFO.CO.ZA

change management. People are important and how you manage people is key. Sometimes you think people are with you and that they’re accepting of the situation, and doing what you need them to be doing, but because there’s not enough communication and detailed report back, they might not be aligned with where the organisation is going.

In the current environment, it’s important to communicate more regularly with people because of this uncertainty. Things are changing fast, people want you to slow down, but the market, the customers and your competitors don’t slow down. So, you have to ensure urgent alignment between all the different parts of the merged entities.” It is also important to ensure that you have the right management team to drive the business in line with your strategic intent, he adds.

Looking ahead

systems, ensuring that we invest in the right initiatives and that we have the right cost structures in place supporting our long-term strategy. We are also focused on how we can retain the current revenue base while growing and attracting new customers. This means reviewing the operating model and environment, budgets and ensuring we can actively participate going forward.”

With eyes on the future, Deon predicts tough times still to come and says companies will need to adapt to survive and thrive. The question is how. “The business plans approved three months ago are now irrelevant. But how do we get in front of the curve and stay there?” Thankfully, Telkom is “lowly geared”, he says: “Our net debt to EBITDA is 0.5 at this stage, which gives us the flexibility to still invest in these difficult times.

We delivered some good results in March. We are spending most of our time now on processes and

At the end of the day, Deon says everybody is onboard and keen to tackle challenges head on.

“Four years ago, if you told people in Telkom to review their budgets they would say, that’s the best we can do. Now, people own it and say, let’s see what is achievable. I’m confident that our employees, our people, will come to the party. It will be challenging but we are positive that with the plans we’ve put in place, we will achieve what we’ve set out to do.” l

We provide Integrated Reporting solutions specific to Public Sector organisations that meet high regulatory requirements.

INTEGRATED REPORTS

STAKEHOLDER COMMUNICATIONS

WEB DEVELOPMENT

EMAIL AND SMS CAMPAIGNS

We are a 51% BEE and majority female-owned company, empowering previously disenfranchised employees of our partner company, Ince.

Through our extensive knowledge of the King Code of Corporate Governance and the International Integrated Reporting Framework, we partner with Public Sector organisations to adopt integrated thinking and reporting.

For further information contact Itumeleng Ndlozi, Managing Director.

Telephone: +27 10 003 9350 • Cell: +27 82 554 6433 • Email: itumelengn@isiqhingi.co.za

www.isiqhingi.co.za

GROWTH CFO Summit 3 discusses winning strategies to stay ahead in tough times

Optimising vs. cutting costs During the first roundtable session of the June CFO Summit, South Africa’s leading financial executives learnt operational strategies to cut costs and optimise their businesses, so as to retain their levels of productivity and maintain their organisations’ competitiveness.

A

s South Africa enters the toughest economic times of the last decade, with its downgrade to junk status and after slipping into a recession, businesses are tightening their belts. The first roundtable at the June CFO Summit at Summer Place, Johannesburg, focused on Strategies for Growth.

It was moderated by Sneha Shah, Managing Director for Thomson Reuters in Africa, while the panelists included Jo-Ann Pohl, former CFO of Telesure Group, Jan Hofmeyr, CFO of Outsurance, and Brett Tromp, CFO of Discovery Health.

“The current business climate means that cost-cutting strategies should be part of business as usual and not simply implemented when times are tough,” said Jo. “It should have minimum people impact with maximum buy-in.”

Bring your people with you You need to implement strategies that best suit your business, its culture and its people, Jan advised. What works for one company may not work for another. Based on his personal experience, he implemented 76

CFO MAGAZINE • CFO.CO.ZA

strategies across an entire management team from senior to junior level to get employee buy-in and prevent the loss of talented members. Creating a broad level of communication that also engages junior team members in the conversation is vital.

Ask staff that are not at a senior level to contribute because “It’s not always how you do it, but who you do it with,” added Jo, who found that “co-creation strategy sessions” allow every level of management (from exco to senior and middle management) to contribute to the discussion. In this manner, she learned that middle management is the glue between what the board and exco want and the execution on the ground.

Another key consideration to incentivise your management team to think long-term is to give them ownership in the business, Jan continued. This will help them understand that a hard decision today will have longterm benefits for them, as part owners of the business, in the future.

Brett added: always be a unified

front. While very robust debates happen between exco members behind closed doors at Discovery, the team always emerges with a consensus and the same message, he said.

Lessons learnt Sneha contributed to the conversation by saying that she has learnt the importance of openness: “I am the most visible when I have bad news.” Jo added: “First get the processes and the systems right and then look at the people and what may still be to come.” Otherwise you’ll pay the price for short-term wins.

And be prepared that when change happens, people often react in passive-aggressive ways or hit survival mode, whereby they create silos that disregard the bigger picture. Be conscious of the transformation processes and timelines within your company, so as to create structures around it. “Some people have what I call ‘corporate collateral’, that they have gained over the years, where decisions are influenced in the parking lot or at the coffee station by someone saying, ‘I don’t think it will work,’” she said. Most importantly, keep the business’s context and culture in

GROWTH

Talent, Culture and Leadership CFO Summit 3 started with an hour-long master class entitled Talent, Culture and Leadership:The new normal for CFOs is overwhelming, relentless and unpredictable – do you have the skills to survive? The session saw contributions from Debbie Ransby, award-winning CFO at Takeda Africa, Harshal Kana, partner at Deloitte, and Inge Walters, Founder of Eve Learning. They shared their personal experiences about the skills needed to successfully navigate the business space, how to drive productivity, be resilient, and remain relevant in these ever-changing times.

Here is some of the feedback the session received: “I appreciate that they focused on softer issues, such as family time, making priorities and not forgetting about the people around you and your team because it’s not just about the numbers, instead it’s about human capital and incorporating the team in your decisions.” − Conrad Frohling, Finance Director at Redheads Engineering Solutions “What resonated was learning the importance of having your goals straight, because then you know when to say ‘yes’ and when to say ‘no’.” − Keitumetse Lekaba, CFO of Mediwell Health and Wellness Centre “Ultimately, we are people. The things that make people successful, whether they are entrepreneurs or CFOs, is to be present, know their values and know their True North. It comes back to those principles of self-leadership and self-development because once you can lead yourself, you can lead your team and the organisation.” − Kwame Moloko, CFO of Specpharm Holdings

mind, be conscious and engage.

All three speakers agreed on the necessity to look beyond the spreadsheets, whether it is to invest in the well-being of their employees by offering soft benefits as part of employment contracts or by greening their buildings and processes. Brett quoted Henry Ford as saying, “A business that makes nothing but money is a poor business”. While those returns may be hidden initially, the increase in productivity speaks for itself. This kind of value proposition also draws and retains customers. l CFO MAGAZINE • CFO.CO.ZA

77

GROWTH Executive assistants of CFOs enjoy breakfast together

Regulate your energy “We also run the risk of categorising work and life as two separate things, with life as the good guy and work as the bad guy,” said Inge Walters during CFO South Africa’s annual breakfast for executive assistants of CFOs.

“

Today we want to talk about energy – how you create it and how you work with it – not just for you, but for the people around you,” said Graham Fehrsen, MD of CFO South Africa.

Graham was speaking at a sumptuous breakfast for executive assistants (EAs) of CFOs, held on 18 July 2017 at the Saxon Hotel in Sandton. “You spend time picking up the pieces for the people who may be going through challenging times at work and are extremely busy, and help them through their days, not only through your work but through your attitude, because you are also there for them personally.”

CFO South Africa brought in Inge Walters, the founder of Eve Learning, a company which specialises in women’s leadership development, to present at the breakfast. Inge’s intention was to provide some perspective on how PAs and EAs – who are often beholden to the demands of their employers – can maintain a balance between professional focus

78

CFO MAGAZINE • CFO.CO.ZA

and taking care of themselves in the workplace.

“It’s wonderful to be with a group of women this morning to talk about what’s happening in our inner lives,” Inge said. “We do so much at work, focusing on getting our jobs done, but we don’t really talk about what’s happening in our inner lives. So that’s my invitation to you today – to go a little deeper.”

Inge said that in today’s fastpaced working environment, a work-life balance is never going to happen. People are expected to be available all the time on their cell phones and laptops, and things are showing no signs of slowing down.

Not helpful “Work-life balance as a term isn’t very helpful to us because it’s used in a punitive way, to beat ourselves up because we don’t have it,” said Inge. “We also run the risk of categorising work and life as two separate things, with life as the good guy and work as

the bad guy. But really, you can’t separate the two – especially as they are becoming less and less distinct from one another.”

Instead, she said, women should focus themselves on sustaining their energy. “You need to understand what gives you energy and what depletes your energy, and by categorising this rather than your time, you will be able to match your energy to the work you need to do.”

She encouraged the women in the room to draw a chart of their own energy levels throughout the day, noting what depletes them and what energises them in the peaks and troughs. These factors could be work related, or home-life related, including answering emails, helping kids with homework or having coffee with a friend. The women then

GROWTH

Five desk exercises Eyeroll exercises – closing your eyes and rolling them behind your lids to give them a break from screen time.

Smiling – just smiling at more people more often makes a difference. found partners and explained their graphs to one another, to gain insights about their dips and peaks.

Various PAs and EAs then shared their insights. One said that she struggled to get her energy levels up after she had driven to work in the morning. Another said that she was fine with the morning traffic but that the afternoon traffic depleted her and left her without energy for her family. Another said that her energy invariably dipped in the afternoon.

Ideal day “The beauty of this exercise is that you diagnose what happens for yourself,” said Inge.

“You can’t design your own ideal day because you are dependent on someone else’s diary and demands but there is probably a

bit of room for play. And remember that what works well for one person might not work well for another – it depends on your own energy levels and context.”

Inge gave the example that most people have a peak of energy in the morning, which they use for responding to emails – a job that doesn’t require a lot of energy – so, if possible, people who are on that cycle should rearrange their days so that they are not wasting their peaks.

Inge went on to say that there are four types of energy: physical, mental, emotional and spiritual. While it may not be possible to do exercises to sustain all of these throughout the day, Inge gave some pointers for at-desk exercises that women can use to give themselves a little lift.

Square breathing – in for five beats, hold for five beats, out for five beats, hold for five beats and repeat.

Gratitude – writing in a gratitude journal about three things that you are grateful for every day.

Making a connection – send an email or a WhatsApp, or make a call at the end of a long day to someone you care about.

The women attending the event were certainly energised by Inge’s words, and went on to have a delicious breakfast before heading back to the office to put their energy management strategies into action. l

CFO MAGAZINE • CFO.CO.ZA

79

GROWTH Award-winning CFO Wayne Koonin fuels Omnia’s acquisition strategy

A catalyst for growth After transforming the chemical behemoth’s information technology and business systems, CFO Wayne Koonin is now stimulating Omnia’s growing appetite for acquisitions.

By Ebrahim Moolla

B

ased in Johannesburg, and with operations in 15 African countries and six international nations, Omnia provides customised, knowledge-based solutions through its agriculture, mining, and chemicals divisions. A giant of the industry with a R16.8 billion turnover, a staff complement of some 4,400 people and over six decades of experience, it recently underwent a departure from type by taking a 90 percent stake in Umongo Petroleum in an acquisition led by award-winning group financial director Wayne Koonin.

Not known for its M&A activity, Omnia sought to complement its existing chemicals division capability by investing R780 million in the Durban-based petrochemical distributor, but according to Wayne, the move doesn’t indicate

“Umongo presented an opportunity to close a gap in our chemicals portfolio.”

80

CFO MAGAZINE • CFO.CO.ZA

a sea change in strategy.

calendar year end.

“The core business strategy hasn’t changed fundamentally.

We have been a pan- African company for the better part of 30 years now and continue to develop our existing business in South Africa and Sub-Saharan Africa. What has started to shift in the business is our international strategy, where we are looking to grow more organically and potentially through acquisition. We’ve started to look at potential opportunities in various jurisdictions,” he explains.

“Umongo presented an opportunity to close a gap in our chemicals portfolio. Prior to the acquisition, our chemicals division had exposure to every sector in the economy except for petroleum, additives and lubricants.

With Umongo, we’ve complemented our existing suite of products and services and will be able to leverage our existing footprint and capability into Africa.

Although we were targeting the possibility of adding a fourth leg to the Omnia group based on our core competence of chemicals and services, this opportunity was not one to be passed over,” says Wayne.

Acquisition process The livewire executive, who was educated at the universities of Toronto and the Witwatersrand, says the nine-month negotiation and acquisition process of Umongo Petroleum that began in September 2016, involved a detailed due diligence and a complex negotiation that needed to culminate in an agreement that had the approval of the key international suppliers. At the time of publication, Omnia was waiting on Competition Commission approval before closing the transaction, which is expected to be completed before

He readily admits that Omnia had been “very quiet” from an acquisition point of view. “The group has evaluated many opportunities over the past several years but didn’t find something that was appropriate or aligned to the strategy.

We evaluate various opportunities for each of the business units and run them through a proper evaluation process to assess the acquisition potential.

Working with a team of inter-

GROWTH

of projects for 2018 is on track and Wayne remains confident of his team's capability to deliver against a very tough mandate.

“The project is really starting to peak now,” says the CFO. “It has given us a platform to consider potential acquisitions, which invariably require some form of integration from an operational, financial or control point of view, which should always form part of the game plan. Strong systems are a critical part of any business and whether to acquire something that is at that level or you are required to implement new systems, this remains an important part of the acquisition process.”

Wayne says he has had fantastic support from the Omnia board to expand his team and securing new hires for key positions to free himself up to spend more time on the more complex areas of his portfolio. The new talent has lent a fresh perspective to the organisational thinking and he is looking forward to further developing these structures in the future.

nal and external people, this is an important part of my portfolio and creates a lot of opportunity to shape the future direction of the group. Our stated objective is to increase the proportion of revenue generated from outside South Africa from the current level of approximately one-third to half the total revenue.”

Mammoth undertaking The Umongo acquisition was announced on the morning of the CFO Awards 2017 that took place in May, when Wayne took home the Finance and Technology

award after missing out the previous year. He was recognised for leading a strategy to implement a new, company-wide Microsoft Dynamics AX ERP system and a new group-wide IT platform as a basis for taking the business to a new level. The mammoth undertaking has been underway for just over two years and has already started to deliver significant benefits for the company. To date, there are in excess of 100 projects that have been delivered and the main ERP systems in two large businesses go live before calendar year end. The pipeline

With a wide range of experience covering a number of key areas of a business, coupled with a great deal of international experience, Wayne sees his role as multidimensional and dynamic.

He points to his ability to “stretch the elastic” and apply his innate creativity to solve problems as a key factor that sets him apart from traditional FDs. Wayne is the strategic champion of technology at Omnia, working alongside a head of IT who handles the day-to-day affairs. He maintains that having a handle on the function will be a prerequisite for CFOs of the future as IT

CFO MAGAZINE • CFO.CO.ZA

81

GROWTH

and the opportunity to gain a lot of experience in various disciplines. Omnia is an incredibly complex business with a lot of depth and an unlimited number of challenges, which suits my personality and creates a lot of opportunity to apply my skills.”

Despite operating in a challenging economic environment, Koonin remains bullish about Omnia’s prospects going forward.

“We still need to run the business irrespective of these type of external constraining factors. We’ve been around for a long time and play a key part in the economic prosperity of Sub-Saharan Africa. You’ve got to be sharper, you’ve got to be more agile, you have to be able to respond to the market opportunities and you have to be able to really focus on your costs and operating model. If you can counter the local issues by moving into other countries or internationally, you create that counterbalancing effect and diversify earnings.”

Wayne Koonin, speaker at Finance Indaba Africa 2017

and systems is the key underpin to any successful business.

whether it be reporting or managing a business,” says Wayne.

End game

“As a CFO, you have to be able to differentiate yourself in the market and go beyond being a solid accountant. My career has been characterised by shorter stays in organisations, which involved doing a lot of things at a very complex level, particularly driving high risk turnarounds that draw on every ounce of your capability. What I’ve done in 20 years, many people don’t cover in 40 years, so it has provided a steep learning curve

“The CFO of the future needs to have a much stronger handle on IT and the impacts of systems because the impact of technology is only going to increase. In companies where the CFO is not necessarily strategically inclined towards IT, you find a very siloed approach and a disconnect with the finance function. My role allows me to look at the end game and make changes to the base to achieve the end results, 82

CFO MAGAZINE • CFO.CO.ZA

“Our business isn’t a fashionable one, but the core is fundamental to the day-to-day mechanics of the economy,” says Wayne. “I think the economic cycle will remain tough for the short to medium term, with the political landscape creating unnecessary uncertainty for businesses. We are looking to 2018 with a degree of optimism. The mining sector is improving, the drought is over and while the chemical sector is still challenging, it gives me a little more scope to come back with a bigger story – a better story.” l

BOOST YOUR CAREER, COMPANY AND KNOWLEDGE

latinum Become a P member of Africa CFO South today

JOIN AS A PLATINUM MEMBER TODAY Are you open to networking, sharing and learning? Do you have an active and ‘can do’ approach? Are you ambitious and willing to grow? Do you work as a finance executive at a top tier company or are you an advisor or supplier working with executive boards? If you answered ‘yes’ to any of the questions above then the CFO South Africa membership is a perfect fit for you.

Register today on CFO.co.za or contact Sarah Chalmers on schalmers@cfo.co.za

MORE CFO EVENTS IN 2017 12 & 13 October - Finance Indaba Africa 16 November - CFO Summit #6 - JHB

CFO Members at the most recent Members Event - hosted by award-winning FD Walter Leonhardt.

Leading the market In a changing world, the need to stay up-to-date with market trends and insights keeps growing. The CFO Africa Programme offers CFOs the tools needed to adapt to change and keep succeeding.

Explore our CFO Africa programme at www.deloitte.com/za/cfo Download our CFO Lens app for free from the Apple App Store or Google Play Store for the latest CFO insights.