CFO Magazine South Africa - 2016 - 3rd issue

MAG AZINE FOR FINANCE PROFESSIONALS IN SOUTH AFRICA 3 • 2016 CFO.CO.ZA

SAICA’s Terence Nombembe “Finance Indaba takes the country forward” From risks to results Sibanye Gold CFO Charl Keyter

CFO OF THE YEAR 2016

Reeza Isaacs The Woolworths watershed

Five hot tech trends KPMG’s Frank Rizzo talks Pokémon GO and Bitcoin

Luvuyo Masinda CFO Standard Bank CIB The road from Mandalay

Osman Arbee CFO Imperial Group Recognition for the mentor

Rob Katz CFO Peregrine Group Lessons from the ring

BUMPER ISSUE! Finance Indaba Africa 13 & 14 October 2016 Sandton Convention Centre

TABLE OF CONTENTS Luvuyo Masinda

Rendani Sadiki

How does a young black South African from the Cape Flats end up in Standard Bank’s posh Rosebank offices as CFO Corporate and Investment Banking at age 37? The answer is cricket, a knack for mathematics, shiny cars, some fateful mergers, a driven partner and – most of all – a passion for purpose.

For two long years Rendani Sadiki fought for what is right, after she took on her superior’s dodgy dealings. Who better to chat to about the tension between the incredible opportunities and the enormous pressure of working in the public sector than the current CFO of the Department of Rural Development and Land Reform.

12 24 Reeza Isaacs “Setting a target, being clear about it and measuring it are some of the key ingredients for my success,” says Reeza Isaacs, the group finance director at Woolworths and CFO of the Year 2016. We talk to him about his adventures in Australia, his passion for transformation and changing the mindset of the business to focus on balance sheet and return on capital.

CFO South Africa is the organisation for finance executives in South Africa. Our goal is to connect finance professionals online and off in order to share knowledge, exchange interests and open up business opportunities.

CFO South Africa CFO Enterprises PTY ltd 6 Kikuyu Road | Sunninghill 2157 Johannesburg | South Africa +27 (0)11 083 7515 www.cfo.co.za

MANAGING DIRECTOR Graham Fehrsen gfehrsen@cfo.co.za +27 (0)79 898 0227 EDITOR IN CHIEF Joël Roerig jroerig@cfo.co.za +27 (0)76 371 2856 SENIOR EDITOR Toni Muir tmuir@cfo.co.za +27 (0)82 908 8687

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DESIGN Cor Lesterhuis PHOTOGRAPHY Patrick Furter, Stephen Cruickshank, Mpho Mokgadi, Mike Turner, Denielle Janse van Rensburg, Lizelle Furter, Liezel Badenhorst, Christine Smith

Jabulile Sopete, Lesley Stones, Morne Mostert, Roy Clark, Yuven Gounden, PRINTING Novus Holdings +27 (0)11 201 3460 +27 (0)84 612 1032 coenraad.pretorius@novus. holdings

OTHER CONTRIBUTORS Anouk Bommer, Coenie Middel, Dianne TippingWoods, Ebrahim Moolla,

© 2016 CFO Enterprises PTY ltd. All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other non-commercial uses permitted by copyright law.

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TABLE OF CONTENTS

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Moving into Africa

12 Interview Luvuyo Masinda: from the Cape flats to Standard Bank CIB CFO 20 Africa: tips and tricks for CFOs

Corporate finance

16 Interview Reeza Isaacs: a chat to the CFO of the Year 2016 33 Interview Charl Keyter: unearthing Sibanye Gold’s success 39 Report on July’s M&A event

Finance Indaba Africa

42 Interview Alex van Groningen: why the Finance Indaba?

43 20 reasons not to miss the Finance Indaba 46 Coenie Middel: the future of mining 49 Interview Terence Nombembe: SAICA calls on all CAs

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Public sector

53 Interview Rendani Sadiki: integrity is everything 57 Report of public sector events June and July

Leadership

60 Interview Rob Katz: lessons from the ring 67 Interview Osman Arbee: recognition for the mentor 72 Morne Mostert: multiple possible futures

Transformation

76 Interview Nadine Kater: training accounting technicians 79 Interview Sihle Ndlovu: tips from a celebrated farmer 80 Roy Clark: the elephant in the room

Get Smart

84 Interview Marcel van den Berg: the secret behind productivity 88 The CFO Case Study Competition 90 Corporate wellness: the bottom line of health

Technology

95 The African FinTech Awards 2016 98 Interview Sandra Atkins Sadler: IBM’s focus on value 100 KPMG at the Indaba: five top tech trends

And further

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6 From the editor in chief: Fast forward 9 Calling for nominees CFO Awards 2017 10 On the move: new CFO appointments 11 From the MD: two jam-packed days 103 CFO South Africa events 2016 & 2017

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FROM THE EDITOR IN CHIEF

Fast forward to the future

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re you ready to put on your augmented reality goggles and scrutinise your company’s performance? Do you have what it takes to monitor a working force of learning robots? Will you store your most precious financial data in a distributed database? In a world of Pokémon GO and Bitcoins, CFOs and their finance teams have to ready themselves for a future yet to be imagined. This bumper issue of CFO Magazine – the Finance Indaba Africa 2016 special – explores this unchartered terrain and profiles some of the finance leaders who will take us there.

“When you are operating in a world as volatile as ours, uncertainty is not a reason not to plan ahead,” says Luvuyo Masinda, Standard Bank’s 37-year-young CFO Corporate and Investment Banking. If anyone ever doubted the quality, tenacity and passion of tomorrow’s leaders in South Africa, then I would recommend turning to his interview (page 12) immediately – as Luvuyo’s journey from township cricket matches to Sandton’s boardrooms provides lessons for all.

Not cricket, but long-distance running and boxing are Rob Katz’s sports of choice and the Peregrine Group CFO candidly shares how he draws on these disciplines in his work (page 60): “You cannot afford to crack under the pressure. You can never go backwards, you have to go forward.” That advice has definitely been taken to heart by Woolworths, which felt winter was coming and bought an Australian department store chain to bulk up against the cold. Our cover story (page 24) explores the role and required transformation of the Woollies finance team with its leader Reeza Isaacs, CFO of the Year 2016.

The boldest and bravest finance leaders work in the public sector and our interview with CFO Rendani Sadiki (page 53) from the

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Department of Rural Development and Land Reform – about standing up for what is right – is an inspirational tale to read and reread. The same goes for the insights from Imperial CFO Osman Arbee (page 67), a mentor to many, and Sibanye CFO Charl Keyter (page 33), who digs up some jewels about South Africa’s most exciting mining company of the moment.

Back to the future, as the world beyond today is the key focus of our inaugural Finance Indaba Africa on 13 and 14 October 2016. We chat to the man who dreamed it up (page 42) and feature several of its wild and wonderful speakers, like accountant extraordinaire Coenie Middel (page 46) and Dutch productivity guru Marcel van den Berg (page 84), who shares some practical ways to get more out of your day – with less stress.

With all the South African accountancy bodies firmly supporting the Finance Indaba Africa, it is also heartwarming to read the ringing endorsement from SAICA CEO Terence Nombembe (page 49), who calls on all CAs to visit the event and contribute to society. “I am very glad we are collaborating comfortably with CFO South Africa around the Finance Indaba,” he says. “This way we can take the country forward.”

When KPMG’s tech wizard Frank Rizzo finally dazzles us with the latest trends, like augmented reality, robotics and cryptocurrencies (page 100), you’ll be ready for the future of finance. Or, as futurist Morne Mostert argues (page 72), you’ll be ready for the various ways things can pan out, because “the intellectual agility to engage simultaneously with multiple possible futures” will be a prerequisite for a chair in the boardroom of the future.

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

“Join us next year at the Finance Indaba Africa on 12 & 13 October 2017!”

Are you part of Finance Indaba Africa?

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Finance Indaba Africa is the largest expo and conference for finance professionals. It brings together peers, advisors, technology suppliers, banks, platforms, tools, CFOs and thought leaders. Over 5,000 visitors tap into a wealth of resources, know-how and inspiration.

After the success of the Finance Indaba Africa 2016, you cannot afford to miss next year’s event on 12 and 13 October 2017. Are you enabling businesses to cut costs, boost sales, productivity and profits? Then share your ideas at the Finance Indaba and help the country grow.

Do you want to exibit at the Finance Indaba Africa 2017? Contact Graham Fehrsen on 079 898 0227 / gfehrsen@cfo.co.za or register online at www.finance-indaba.co.za

Visit the CFO Awards Summer Place Hyde Park on May 11th 2017.

Dumisani Dlamini (CFO National Arts Council of SA) receives the 2016 Public Sector CFO of the Year Award from KPMG Partner Edson Magondo

CFO of the Year

Public CFO of the Year

Young CFO of the Year

Strategy Execution

Transformation & Empowerment

High Performance Team

Compliance & Governance

Finance & Technology

Moving into Africa

Finance Transformation

Meet 300 CFOs, share knowledge and boost business On 11th May 2017 the annual CFO Awards will be held at the beautiful Summer Place in Johannesburg. This prestigious event recognises CFOs of listed companies, large corporations, parastatals and government institutions and awards them for outstanding performance and leadership.

CFO South Africa invites you to buy a table at the CFO Awards, attend the CFO Conference, join the panel of judges and become our partner. Seats are limited, so book now to avoid disappointment. For more information visit CFOAwards.co.za or contact Graham Fehrsen at gfehrsen@cfo.co.za.

Visit CFOAwards.co.za

FINANCE INDABA Nominations for annual CFO Awards open until 31 October 2016

Who are 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 the best at the annual CFO Awards on 11 May 2017 – and we are calling on the finance community to submit nominations.

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n 2017 the panel of judges will include Prof Wiseman Nkuhlu, Chancellor of the University of Pretoria and, as first-ever black CA(SA) in the country, one of the most inspirational and influential finance leaders of our time. The panel consists exclusively of business leaders, accounting academics and award-winning CFOs. 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, who will base their final votes on a dossier that includes performance indicators. Nominations for the 2017 CFO Awards can be submitted to Graham Fehrsen at gfehrsen@cfo.co.za until 31 October 2016. l

Visit CFOAwards.co.za for more information.

“Being named the Young CFO of the Year and Public CFO of the Year 2016 has been the highlight of my career.” – Dumisani Dlamini, CFO National Arts Council of South Africa

Victor Sekese (CEO SizweNtsalubaGobodo), Deon Fredericks (CFO Telkom), Aarti Takoordeen (CFO JSE Limited) and Richard Osborne (CFO AG Mobile)

“At first I had no idea what it meant when I was nominated in 2014 and won the Young CFO of the Year Award. From then to today I understand the impact of an award such as this, as I started getting a lot of messages from people who said they were inspired. Thank you CFO South Africa, for hosting such an event that is so prestigious and that we’ve come to love and appreciate so much.”

– Aarti Takoordeen, CFO JSE Limited and Young CFO of the Year 2014, speaking at the 2016 CFO Awards

“It’s the Oscars of the CFO world!” – Victor Sekese, CEO SizweNtsalubaGobodo

“CFOs tend to be quite lonely creatures. The beauty of the CFO Awards is that it highlights people who have succeeded and because it is peer-to-peer it carries a lot of gravity, because no one understands the journey you walk better than the people who share the same roles in different organisations in different sectors.” – Vusi Thembekwayo, MC at the CFO Awards 2015 & 2016

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MOVERS New CFOs for Tigerbrands, Safaricom and Showmax

On the move One of the most interesting CFO appointments in the last few months, was the August return of Noel Doyle as finance executive at Tiger Brands, taking over the baton from Funke Ighodaro. In 2008, Noel quit his post as CFO during the bread price-fixing scandal, although the extent of his involvement was never clarified. He later joined the firm again, first as business executive of the grains and milling division and since July 2015 as COO.

Noel Doyle

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Adekunle Awobodu

In May, Dineo Molefe became the new CFO of T-Systems, taking over from Aneshree Naidoo, who moved to Deloitte. Dineo expressed great excitement for her new role, saying: “My initial focus will be to gain deeper insights into the operations of the business, and align finance to becoming more effective in business partnering. I hope to soon see Finance play its role in driving the strategy of the business and becoming a trusted business partner. I want to focus on attaining further efficiencies in our processes and on people development. I feel excited about the opportunity to be part of T-Systems. I think this is a great company; one that continues to focus on growth and remaining relevant to its customers.”

Akash Bhatia was named the new CFO of ShowMax, the video stream-

Aneshree Naidoo

Dineo Molefe

ing business of Africa’s largest company by market value, Naspers.

Bhatia previously held positions at Time Warner’s HBO and Comcast’s NBCUniversal, and says what attracted him to ShowMax is the enormous growth potential and how the company is tackling expansion.

Naspers is in the process of expanding its video streaming offering to 36 countries in a bid to challenge its biggest competitor, Netflix Inc, which is also growing its presence in the region.

Some reshuffling happened at Dark Fibre Africa (DFA), where Cilliers Steyn was appointed CFO. Cilliers took over from Thinus Mulder, who accepted the position of permanent CEO, following the stepping down of Gustav Smit.

Cilliers previously held the position of CEO of Community Investment Ventures Holdings (CIVH), of which DFA is a subsidiary.

Elsewhere on the continent there were also some noteworthy moves, with Adekunle Awobodu being appointed new MTN Nigeria (MTNN) CFO. He is the first Nigerian to occupy this position and takes over from Ferdi Moolman, who became CEO of the company in December 2015.

In Kenya, Govinder Sateesh Kamath was appointed new Safaricom CFO, effective 1 August. He took over from recalled CFO, John Tombleson. l

FROM THE MD

Learn, network & grow with CFO SA

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he last 12 months of news headlines have been characterised by Brexit, Donald Trump and Nenegate and it would seem that the one thing you can be sure of is more uncertainty. We’re faced with a proverbial tsunami of change and unexpected socio-political and economic upheavals and it has never been more complex to lead people and manage organisations.

Finance professionals have enjoyed decades of rear-view mirror comfort without any threat to their importance at the centre of organisations, but that is changing. The work they do and the value of the past in predicting tomorrow is changing rapidly and technology is powering a new breed of forward-looking, customer-centric finance professionals who will be required to partner with business more, drive innovative change, have a third eye for the future and lead people and businesses in an increasingly complex social and regulatory environment.

None of this should be surprising to finance leaders who have spent the last year learning and networking with us as CFO South Africa. We have gone to great lengths to create peer-to-peer platforms that allow senior finance executives to share insights and knowledge. Apart from exceptional CFOs we work with, our platforms have hosted academics, futurists, FinTech gurus, leading executives and consultants, a doctor, a world championship winning baseball coach, and a leading entrepreneur!

"If you do nothing else this year, schedule some time to visit the Finance Indaba Africa on 13 and 14 October in the Sandton Convention Centre"

We believe that a community that learns together reaps the benefits together. This is the inspiration behind our creation of Finance Indaba Africa; two jam-packed days of learning, networking and growing South Africa as part of our commitment to extending the opportunities our platform offers to the widest group of finance professionals possible. If you do nothing else this year, schedule some time to visit the event on 13 and 14 October at the Sandton Convention Centre and see for yourself how the world of finance is changing. And it’s free if you’re a registered accounting professional so bring your team and enjoy the inspiration and knowledge. l

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MOVING INTO AFRICA The inspirational journey of Standard Bank CIB CFO Luvuyo Masinda

The road from Mandalay How does a young black South African from the Cape Flats end up in Standard Bank’s posh Rosebank offices as CFO Corporate and Investment Banking at age 37? The answer is cricket, a knack for mathematics, shiny cars, some fateful mergers, a driven partner and – most of all – a passion for purpose. By Joël Roerig

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ometimes Luvuyo Masinda wonders if he is too young and inexperienced, but that does not happen often. Most of the time the 37-year-old from Mandalay, a small township in-between Mitchell’s Plain, Khayelitsha and Cape Town International Airport, just focuses on his role to the best of his abilities, trying hard to never look too far ahead.

“As CFOs we play such determinant roles in the business. In my role I can influence the bank’s future and help Africa achieve growth. That is my work! You cannot call that a job. That is what drives me.”

There is a question that lingers as much in the windswept streets of Mandalay as in the cool corridors of the bank’s offices and the board rooms of corporate Sandton. Some youngsters are brave enough to approach Luvuyo when he is visiting his mother or the Mandalay Cricket Club he helped found. And some of Luvuyo’s colleagues move beyond assumptions, take the plunge and

engage. No matter how different the people asking, the question is always the same: Wena! How!?

“I am definitely not smarter than others,” says Luvuyo with an unhurried confidence that explains as much as his words. “I have always focussed on my roles. I do them the best I can. I don’t look too far ahead and the right roles keep finding me.”

There is literally nothing about the CIB CFO on the internet (“that is very deliberate”), so we have lots to talk about and we are fortunate that Luvuyo makes an hour and a half available to answer that poignant question and – more importantly – shares what he learned along the road from Mandalay.

“Like many in the townships, I was raised by a single mother and I stayed with my siblings,” says Luvuyo, as he sits down with CFO Magazine in Client Meeting Centre 14. “I was fascinated by sports and I was not too bad. I played soccer

and especially cricket, just like my brother Ronald.” These days, sports lovers will know Ronald as sports news anchor and reporter for eNCA, but in his younger years he played provincial cricket with the likes of Vernon Philander and JP Duminy, who are now regular players for the Proteas, SA's national cricket team.

“I wanted things to be better.”

Four years older than his brother, Luvuyo would have preferred to follow in the footsteps of his Kaizer Chiefs heroes Doctor Khumalo and Teenage Dladla, but he excelled as a lanky fast bowler and also made it into the provincial youth teams.

It was the youngster’s first step towards a career as high-powered banking executive, he realises in hindsight. “It did a couple of things for me. I was not always such a confident young child and cricket gave

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MOVING INTO AFRICA me that self-belief. It also kept me out of trouble and, importantly, opened up the world for me. Thanks to the provincial tours, I went on an airplane to Johannesburg for the first time, I stayed in a hotel for the first time, I swam in a swimming pool for the first time, and I ate pizza for the first time. Living a privileged life in Saxonwold in Johannesburg, these are all things my kids take for granted now.” But for young Luvuyo these experiences made all the difference: “I wanted things to be better.”

There comes a time in many boys’ lives where they realise they will never be professional sportsmen.

When that happened to Luvuyo he had no idea what to do. “I never thought about the future. I was good at Maths, loved Physics and hated Biology. Not until matric did I think about becoming a CA, but it was too late as I had not applied in time. My mother told me I was going to study or I had to leave the house, which is how I ended up doing a three-year national diploma cost and management accounting at what was then the Cape Technikon.”

The diploma course included six months of work experience, for which Luvuyo went to a local firm KMMT Brey. It wasn’t the salary (“not much more than travel and lunch money”) as much as the shiny cars that made the biggest impression. “It sounds materialistic, but this was the first time in my life that I was exposed to CAs and their lifestyle. When I rocked up for the interview I saw these really fancy cars and the not-so-fancy cars.

That is when I decided I wanted to be a CA. The bug bit me.”

Managing partner at the time was Haroon Lorgat, who later became chief executive of the International Cricket Council (ICC) and currently leads Cricket South Africa.

Ironically, this gave him the privilege that many white counterparts

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“Being able to talk about cricket felt like fate to me, but of course the role these connections play is part of a bigger problem.”

have: the ability to talk about a common interest with those interviewing you, which always helps in connecting with people you don’t know and in making an immediate impression.

“This recently came up in an ABASA panel discussion as still being a major problem from the perspective that the culture in corporate SA is foreign to a lot of black candidates entering it, this puts them at a disadvantage and can be intimidating.

Being able to talk about cricket felt like fate to me, but of course the role these connections play is part of a bigger problem.”

Luvuyo did well and KMMT Brey took him on board full time. “Then a couple of life-changing events happened,” he recalls. Firstly, KMMT Brey went up in Gobodo, allowing him to get exposed to audit and sign a fiveyear article contract. Then “an even more incredible thing happened” when EY bought Gobodo Cape Town.

“Suddenly I was doing articles at one of the Big Four firms and that makes a big difference in terms of hiring perspective and how people are thinking about you as a CA. It was once again fate for me but the preference for Big Four CAs is something that needs to be addressed.”

As Luvuyo grew up, he also helped the late Sydney Mgengo start Mandalay Cricket Club when he was 19 years old. “It helped me mature, because I was not only playing but also did all the admin and organised transport for 100 kids each week. Mr Mgengo was an old man from PE who loved cricket and believed this could keep kids out of trouble. My brother

and I were the only kids in the township who played, so it was logical that we got involved.”

EY helped Luvuyo to up his game to “a new standard of how things get done”, allowing him to “see things through the lens of an international firm”. The company gave him ten months off and Luvuyo signed up for the “fantastic” National School of Accounting (NSOA), which flew in lecturers from the University of Natal for a class of 30 ambitious accountants in the Cape Town CBD. “This helped me convert my studies into a degree and complete my long, long journey to articles, which meant the most fundamental change in my life. We did not only work towards the degree but also worked on personal development and skills like public speaking.”

Besides Luvuyo, a young and ambitious woman called Luleka was the only other student who grew up in Cape Town, which added motivation for both of them to succeed and brought them closer. “We were very different and I didn’t like her much in the beginning,” Luvuyo recalls with a warm smile. “She had that energy and that conviction that things can be better. That made me fall for her. She pushed me hard to succeed. She was much more mature than me and, now she is my wife, she basically still is.”

Luvuyo then disappointed some colleagues who had invested in his career, first when he left EY for JP Morgan in Johannesburg, and then after “two years of incredible learning about discipline around control and governance” when he moved banks.

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MOVING INTO AFRICA

“When I go to Mandalay, people know that I am from there and I notice kids are actually listening to what I say. […] It is part of my purpose.”

After attending an event at which someone from Standard Bank spoke about the bank’s focus on Africa, Luvuyo decided to take fate in his own hands. “The way the bank was thinking about its role was important to me. It is important for an organisation to have a purpose and for that purpose to be genuine. The move was non-monetary, as I could have made more money at JP Morgan, especially in the short term. I just believe in what the bank is trying to do and, as a professional, father and husband you have to do what you believe in. The bank is now an extension of my life.”

Joining the bank as Head of Group Consolidations in 2007, Luvuyo says he quickly overcame the technical difficulty that came with the territory and learned a lot from his close working relationship with the FD Simon Ridley, CFO of the Year 2014. “I joined in a position that is not really fashionable. I didn’t start in CIB, for example, but it was incredible learning. I interview a lot of people and many think too far ahead too quickly.

You learn more where there are people that you can learn from. I had never heard of Simon Ridley before but he taught me incredible lessons about communication.”

Luvuyo says he initially did not understand why Simon was so pedantic about grammar but says he now realises that simple, accurate wording is crucial. “Simon had two very good sayings. The first one is ‘tell me so my mother would understand it’, which forced you to talk about complex issues in a simple way. That helped you understand it yourself and made it easier to align strategy while keeping many balls up in the air. The other thing he often said when I brought a report is that I obviously didn’t have more time to write it shorter. It boils down to the same thing that if you really understand the material, you can articulate simpler and clearer.”

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MOVING INTO AFRICA While learning from the best, Luvuyo rapidly scaled the ladder and progressed to an executive role in 2009.

“I was 30 years old, still young and wide-eyed, Group Financial Controller, working on IFRS, management support capabilities,” he recalls. “At some stage Simon asked me ‘what do you want?’ I said: ‘your role’. He said then you need to spend time in the business unit and in 2012 I joined CIB finance as head of financial analysis, later becoming deputy CFO.” Learning massive lessons from other incredible leaders within CIB and the wider bank, Luvuyo started casting his eye to the future, a tell-tale sign of a CFO who gets more comfortable in his skin. “[CIB CEO] David [Munro] reinforced the critical message of purpose and planning ahead. When you are operating in a world as volatile as ours, that uncertainty is not a reason not to plan ahead. Planning also helps you think about what you want to be and how you will do that.

Of course, within your plans you need to adapt as the world is becoming more random, countries more protective, and anti-establishment sentiment is increasing.”

Case in point is the plan Standard Bank drafted for the period 20122016, after it made a strategic U-turn and started moving out of – sometimes recently acquired – businesses in Argentina, Russia and the UK. “It is 2016 now and we are right on the plan, despite the volatility of previous years and despite the fact that the world is a different place now and the rand moved from eight to 16 to the dollar. For me, it is a key lesson about the power of planning.”

Luvuyo says he always thought his wife’s career would move quicker than his own but after a career at BHP Billiton and Standard Bank’s retail division, she resigned three years ago and opened – to date – four franchises of a beauty ther-

apy salon chain. “Luleka has the tougher job, looking after me and the children. She provides incredible support and motivation. We have a purpose for the family and that is what we are working towards.”

The decisive lessons that Luvuyo learned through sports are compulsory learning for his son (ten) and daughters (seven and three). “Life would not have been so interesting if I had known from age seven that I wanted to become a CA. It would have been boring. Being exposed to sport was crucial for me. I have tried hard and luckily my son is starting to like sports now, but he is really more into wild animals.”

He adds that having children has given him a different perspective – and has erased any urge to buy the most expensive, shiny car. “I am really passionate about young men in townships. I want to build the Mandalay Cricket Club into a sports academy, linking it to education. I go home at least twice a year and still so little has changed.

Meeting other CFOs “The amount and pace of change in the world is so dramatic. No one individual can say I am smart enough, no one industry can have all the answers. As an individual finance executive and for the CFOs in Standard Bank, learning from other CFOs or different industries is incredibly valuable. The calibre of people at CFO South Africa’s events is very high and for us as Standard Bank it is important to partner with an initiative with such incredible potential as CFO South Africa.”

Finance Indaba Africa 2016 “I often challenge my guys in the finance team to spend more time finding out what is happening outside the direct scope of what they need to do. I find that people tend to struggle with that in South Africa, but it broadens people’s perspective. Finance people are usually focussed on their deliverables but they need to be able to step out. That is why the Finance Indaba Africa is such an incredible opportunity for finance professionals to learn and network.”

I know there is something I can do about it. I want to help create men of right standing and address things like crime, violence against women and violence against children.” This has made Luvuyo think about the things that really matter in life. “You pass your exams? You feel the same as yesterday. When I became a CA? Nothing really changed. But when I go to Mandalay, people know that I am from there and I notice kids are actually listening to what I say. And when I speak to my own children, I can make a real difference. It is part of my purpose, not to only be CFO and make lots of money and have multiple holiday homes.”

So now, with all seven of Luvuyo’s direct reports in the bank older than himself, he sometimes wonders if he is too young or too inexperienced.

“But I often get reminded that John F Kennedy became president of the world’s most powerful country at age 43,” he says, and the confident smile reappears. The big difference is of course that JFK was born into the political and business aristocracy of Massachusetts, while Luvuyo travelled the road from Mandalay. l

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“How can you help us navigate this continent’s opportunities?”

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Our commitment to Africa’s growth remains as strong as ever.

Deep insights into cross-border opportunities, together with our expertise in 20 African countries and presence in key markets internationally, still make us the right choice in realising your business’ potential. Let us be your partner for growth on this continent we call home. standardbank.com/CIB

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MOVING INTO AFRICA Four top finance bosses reveal the reasons for their success on the continent

Africa: tips and tricks for CFOs What does it take to be successful in the rest of Africa? We have been reading woolly, long-winded analyses on the future of the continent for long enough – now it is time to get practical.

We asked four CFOs who were nominated for the 2016 CFO Awards to share some tips.

Bikash Prasad: look at the long term Bikash Prasad has quickly moved through the ranks and last year became CFO for Africa and the Middle-East at Olam International, a global agri-business operating from seed to shelf. Bikash has been a long-standing supporter of CFO South Africa and the panel of judges voted him as winner of the 2016 Moving into Africa Award, which he received out of the hands of Standard Bank’s CIB CFO Luvuyo Masinda on 12 May 2016. We asked him what it takes to be successful in Africa.

“Look at the long term. You might have challenges in the short term, with the global economic slowdown and the slowdown in China impacting the continent, but the long term is looking very bullish and positive.”

“To operate in Africa, you have to be a noble corporate citizen. You cannot be non-compliant. You need to really believe in sustainability and get a license from the community you want to work in,

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not just an official license from the government you are dealing with. We hardly ever run into any trouble because of that approach.

Recruiting and developing talent is also crucial.”

“You can see the success of the way we work in how we have grabbed growth opportunities in 2015. Where big giants from South Africa struggled in Nigeria, we have been very successful, as we understand our businesses and have finance visibility. Unless we have a good understanding of the whole picture, you can never be successful, not only in Nigeria but in any African country.”

“We operate in 23 African countries with different languages, cultures and accounting systems. That means I need a good mix of nationals and some expats. I like to give opportunities to local African talent despite reservations from various quarters due to mindset issues. I personally go to ACCA and CPA Campuses in Kenya, Cameroon, Tanzania and Uganda and recruit qualified accountants as Africa finance trainees who are then groomed to become managers. This experiment is hugely successful and

helped our localisation drive, building a sustainable and robust structure.”

“Compliance requirements are increasing a lot, partly because many African countries are implementing best practices from the G20. That is why we have created centres of excellence for taxation, macro-economics and francophone accounting. We are in constant conversation with the Big Four to understand the key trends on the continent, and understand which tax regimes are the most well-struc-

MOVING INTO AFRICA

“You need to really believe in sustainability and get a license from the community you want to work in.”

Image courtesy of Robbie Cheadle, Associate Director, Deal Advisory, KPMG South Africa

tured and efficient, so that we are geared towards the changing tax environments in each of the economies in which we operate.”

“We have also created an African Intelligence Unit. CEOs in countries and regions now have a one-stopshop for all their data requirements, whether it is economic outlooks,

Johan Geel: don’t stay away Johan Geel moved from a COO to a CFO role at Afgri in 2012. He was nominated for the 2016 CFO Awards and during his interview with the panel of judges he spoke passionately about his vision for the rest of Africa. Here are his tips: “Find trustworthy people, work with the correct information, do proper research, go there and make sure of things yourself – don’t stay away. Before you start spending any money, make sure your information is correct and confirm this with external parties. Understand your

key trends in agriculture or any other data and analytics they need.

The unit is involved in research and development and works closely with consultants, following global and African trends.”

“Thanks to our own data collection, we are ahead of the curve to embrace the realties in the market

and we can tweak our action plans accordingly. We also use our relationships with governments, NGOs and industry bodies. We engage small and marginal farmers on the ground throughout the year, which gives us competitive advantage compared to competitors who only participate during the trading period.”

market: some information you get can be old. Understand the infrastructure locally and make sure off-takers will be there. It will help if you can create your own value chain. Keep the right staff and skills and realise that people think differently.”

“Work with the correct information, do proper research, go there and make sure of things yourself.”

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MOVING INTO AFRICA

Mohammed Abdool-Samad: localise your FDs Mohammed Abdool-Samad was shortlisted as a nominee for the CFO Awards in both 2015 and 2016.

He has been the group FD at South Africa’s biggest sugar producer, Illovo, since 2011 and is very active in other African countries like Tanzania and Zambia. We asked him what he has learned there.

“There are massive opportunities and with that comes risk, so you need to understand the landscape and do a bit of a risk assessment. The risks include currency, political stability and the regula-

“Make sure you are as local as possible and don’t think you can parachute your leadership in.”

tory environment. But still, there are great opportunities across the continent. Just make sure you are as local as possible and don’t think you can parachute your leadership in.”

“You can read a lot of research on African markets, but the danger is getting lost in the detail. That is why I have weekly talks with the FDs in our African operations, often about people, markets or regulations. I also visit the operations roughly every three months and engage extensively on the ground. People on the ground are far more candid, so I make sure I talk to them. We get help from advisors, but I don’t choose a firm of advisors but individuals that I trust and have the requisite experience. I pick and choose experts for IFRS, transfer pricing, tax, etcetera. Admittedly, it takes a while to build up a network.”

“It has been a journey over four years to localise our FDs in Africa, which is key to building a sustainable finance function. Today, five out of six FDs are top notch local FDs that came from our own business. It has been a journey, but it

Osman Arbee: detailed due diligence Imperial Group CFO Osman Arbee won both the Strategy Execution Award and the High Performance Team Award at the 2016 CFO Awards. Elsewhere in this magazine, the seasoned leader shares the story and lessons of his career.

Here he reveals some of his insight into the continent.

“Develop your own knowledge base on local operations, get the sellers to

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turned the whole face of the business around.”

“I had the advantage of my Anglo years, where the local model had worked really well. We are now starting to see talent in the business develop, not just in Finance. The governments of the countries we operate in are proud of us - we are now seen as a local business, which certainly helps with managing different stakeholders. You cannot quantify that, but my life as a CFO has definitely become a lot easier.”

stay in for at least three to five years with profit warranties while you get to know the business, do detailed due diligence on tax, legal, accounting and business issues. Ensure you have robust processes to ensure no transfer pricing is happening, tax is paid to the correct jurisdictions and understand local currency remittance and other local statutory requirements.”

“Due diligence has made us successful.

We don’t rush into a big deal, but take 12 to 18 months. We need to understand the thinking of the owners, the needs of the country and the regulatory environment. I am also quite pedantic about transfer pricing.” l

The opportunity: Africa

Africa’s a continent of contrasts, unique challenges and amazing opportunities. Succeeding here depends on having a deep understanding of local issues, a global perspective, and the ability to use these to build tailored solutions. We’ve been doing business in Africa for almost a century, and over 9000 professionals in 66 offices are working with our clients to add value to their businesses.

It’s what we do.

At PwC in Africa, we don’t see problems, we see opportunities. www.pwc.com/africa

©2016. PricewaterhouseCoopers (“PwC”). All rights reserved. (16-19001)

CORPORATE FINANCE CFO of the Year 2016 Reeza Isaacs about the role of finance in the Woolworths watershed

Measures of success “Setting a target, being clear about it and measuring it are some of the key ingredients for my success,” says Reeza Isaacs, the group finance director at Woolworths who was elected CFO of the Year 2016 at the CFO Awards on 12 May. We talk to him about his adventures in Australia, his passion for transformation and changing the mindset of the business to focus on balance sheet and return on capital. By Joël Roerig

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The David Jones acquisition

Winter is coming, is what Woolworths CEO Ian Moir said, using the Game of Thrones quote to drive home the message that slow growth in the northern hemisphere was forcing businesses to look south, and that Woolworths needed to scale up to ward off the threat. Like in the epic novel and television series, not everyone was convinced by the decision to prepare for the cold by buying Australian department store David Jones. It was a department store, it wasn’t cheap, it was almost as big

as Woolworths itself and it wasn’t doing very well.

Enter the new group finance director Reeza Isaacs, who had just joined the group in 2013 after that same CEO invited him for dinner and surprised him with a job offer.

It was attractive enough to make Reeza leave a 22-year career at EY in which he had been part of substantial growth of the firm’s Cape Town offices. “The acquisition of David Jones and minority interest in Country Road was a game changer for the business and not something

CFO of the Year 2016 “In a very short space of time, the CFO Awards have become the pre-eminent event for finance professionals, which is testimony to the hard work and commitment of the CFO South Africa team. I was surprised to be nominated and named CFO of the Year 2016. It was really unexpected. As my colleagues will testify, I struggle with the limelight and the attention, but I appreciate the acknowledgement and was very humbled – especially by my peers. There are many talented CFOs in this country and many who deserve the recognition.”

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I expected to be part of so soon. It was definitely not business as usual,” says Reeza. “It was exceptionally complex but has been a phenomenal experience and something which I feel privileged to be part of.”

The acquisition transformed Woolworths from a South African business into a southern hemisphere business, with half of the group now in Australia. “It has been quite a journey for the business, as well as for finance, which had a key role. It was our job to ensure that the deal metrics made sense and stacked up, and that – from a shareholder point of view – this would be reflected in increased value. The acquisition of David Jones had an impact on the way we approach certain aspects of finance at Woolworths.

Before the deal, we had no debt on our balance sheet. It is a substantial number now, but it is manageable.

Profitability has always been a key focus but we have also brought in measures to focus on Return On Capital Employed (ROCE).”

“Before the deal, we had no debt on our balance sheet.”

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CORPORATE FINANCE

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Recipe for success

After joining Woolworths at a watershed moment, Reeza embarked on restructuring the finance function within the group, with his CFO of the Year Award as ultimate recognition for his achievements over the last few years. When asked about his recipe for success, he has a surprisingly traditional answer: hard work, perseverance, integrity and being clear about expectations. “Setting a target, being clear about it and measuring it –

these are some of the reasons for success, although business is not only about KPIs of course.”

The finance team’s involvement in what Woolworths does is all-encompassing, Reeza explains. “We are a consumer-based business focussed on the upper end of the market, which means we’re impacted by macro-economic factors and sentiment. We noticed that Nene-gate [when President Jacob Zuma unexpectedly fired finance minister

Nhlanhla Nene] was significant for our customers. During that week, we saw consumer confidence drop and an impact on food sales. People were emotionally affected and this impacted spend. We have no control over this, but need to respond appropriately as a business to things like this. As soon as this unfolded, finance engaged with the Bureau for Economic Research and started looking at the possible top line impact, consumer behaviour, costs and margins”.

“We have the pick of top black CAs, as they like our brand, ethos and culture.”

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Passion for transformation

Besides his new title as CFO of the Year 2016, Reeza was also presented with the Transformation & Empowerment Award 2016 at the CFO Awards, an acknowledgement that didn’t come as a surprise to people who know Reeza. “Before I accepted this job, I worked at EY for many years, eventually leaving as managing partner of the Cape Town office. I felt as passionate about transformation then as I do now. I was also on the board of ABASA at some point. I feel very strongly about developing young black CAs and it gives me enormous satisfaction to see young people succeed.”

Reeza says this focus fits well with

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CORPORATE FINANCE Woolworths, which has been voted the most socially responsible retailer in the world for three years in a row.

“We have a broader focus than most companies. We look at sustainability, local sourcing, environmental impact and relationships with communities. In South Africa we also support programmes like ‘Farming for the Future’, but we also drive transformation from a people point of view. It is part of who we are.”

Woolworths probably has the most transformed board of all local retailers, suggests Reeza. “We have a very focussed internal programme that measures our progress against targets. From a preferential procurement perspective, we have set aside a fund for the development of local suppliers which we have just increased substantially. That fund aims to support upcoming black businesses with capital, but also with intellect, as our CAs help them understand cash flow, capex and working capital. There have been very few instances of companies defaulting. We don’t make enough noise about it, but I am very happy with what we do in this regard.”

“From a finance perspective, the team in South Africa is very transformed. We have the pick of top black CAs, as they like our brand, our ethos and culture. It is also part of our recruitment philoso-

“I prefer to bring people along with me, instead of telling them what to do.”

Reeza Isaacs before Woolworths At age four, Reeza Isaacs was forcibly evicted with this family from their home in District 6, relocating to Surrey Estate on the Cape Flats.

As the fourth of seven children, he was initially bent on becoming a medical doctor, but realised that it would take too long and that funding was an issue. He then decided to become a chartered accountant, he recently said in an interview with SAICA’s communications director Yuven Gounden.

Reeza matriculated from Belgravia High School with good results and was able to secure a full scholarship from Shell in 1985. What followed was the long and arduous road to becoming a CA(SA). The first accolade on this long and winding road was appearing on the Dean’s merit list in his first year of study, which inspired him to keep going.

“I joined EY and qualified as a chartered accountant, where I completed my training contract,” Reeza recalls. “I was selected to spend 18 months in the USA by EY, and was admitted as partner a few years after my return. I enjoyed the challenge of winning new work.” He served as the lead partner for several of EY’s largest Cape Town clients, including Engen, Coronation, Metropolitan Life, Sanlam, Truworths and Woolworths – establishing a name for himself at his future employer.

Reeza stayed at EY for 22 years in total, and was made managing partner in 2010. “Three years after being appointed leader of the audit business in Cape Town in 2007, we doubled the profitability of that business. During my tenure we managed to win a number of big accounts, including very large, listed company audits like Coronation Fund Managers and Clicks. One of the things that I enjoyed the most during that period was building up a young, dynamic and diverse team of partners.”

phy, to get the best black talent. We also have an exceptionally strong focus on CSI and the finance team gets involved in many initiatives.

If I see what the team achieves on weekends and in their spare time, it never ceases to amaze me. The company then matches whatever a business unit like finance raises.

This is hard to explain, but for example there are collection points for toys, there are posters about our efforts around drought relief and this morning an email was sent thanking a business unit for its CSI efforts. It sounds like a cliché, but it really is part of our DNA.” On a personal level, Reeza feels very strongly about the role he can play

mentoring young South Africans inside and outside of the company he works for. “I mentor young CAs and try and give advice. Within my team, coaching is important. I have lots of one-on-ones.”

4

Leadership & culture

To be an effective finance executive, you need to be a great people manager. How does Reeza get the best out of his team? “Two words come to mind: challenge and support. Empower is a third one. I want the best people around me. I encourage a collaborative approach, with debate and discussion. I prefer to bring people along with me, instead of telling them what to

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CORPORATE FINANCE do. We have a team culture where people feel they can rely on their colleagues. That means they can build on relationships between them. It is important to make people feel empowered.”

When recruiting, the first thing Reeza looks at is a culture fit. “That is very important at Woollies. In retail finance there is a lot more art than in financial services, for example: What makes a garment sell? What consumer decisions dynamics do you have to be conscious of? We need people that can manage that grey bit in between.

They need to balance what is best for the shareholders, while enabling the business to thrive and succeed.”

Reeza says he likes to think his finance team is regarded as professional, focussed, hardworking and collaborative by the rest of the company. “An example is our work with ‘Woollies’ food division. Our strategic intent is to change the price perception of Woolworths.

Part of my team works closely with the food group to look at which investments we should make, at what pricing and what market share we could get and what that means for our margins.”

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Shifting the mindset

To gear up for growth, the finance function had to go through a thorough transformation of its own. Reeza added a fully-fledged treasury function and restructured the finance department, appointing a CFO for Woolworths South Africa.

“An important milestone was getting the right focus on the balance sheet and return on capital: changing the mindset, which was not without challenges.”

Reeza believes the finance team’s work is not complete – it never is.

“We have a lot of work to do at

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David Jones: transforming finance, bringing in new systems, bringing a focus on productivity to the business. They don’t have that, while we treat space for example as exceptionally important. We will implement a new finance and stock management system and there needs to be a focus on automation.”

“We have a very mature compliance culture and a well-established

risk committee. David Jones has benefited hugely from our risk and compliance process, which is comforting. They didn’t have an established risk committee and risk process. For example, around IT strategy and governance we had to systematically consider all of the controls and address things like cybersecurity. Having a quarterly board process governs this and holds people accountable.” l

AT MAKING YOU

NUMBER 1 Old Mutual Corporate is honoured to be repeatedly recognised as the winner of top South African retirement industry awards.* We are thankful for being recognised again by the industry and its peers in winning Imbasa Yegolide Awards for: • Manager of Managers of the Year - awarded to Old Mutual Multi-Managers for the second consecutive year • Communications and Marketing Provider of the Year - awarded to Old Mutual SuperFund for communication to, and the education of members, employers, administrators and other stakeholders Beyond winning these awards however, what truly inspires us is seeing more South Africans realise their financial goals and retirement dreams. We believe that achieving great things relies on successful communication. Through the Old Mutual Financial Wellbeing Programme we are dedicated to providing retirement fund members with knowledge and understanding; guiding them towards a better future.

www.oldmutual.co.za/CorporateAwards

Old Mutual is a Licensed Financial Services Provider. * Batseta Imbasa Yegolide Awards 2015 & 2016 accolades for professional excellence in the retirement fund industry. Batseta Council of Retirement Funds for South Africa is a professional industry body that looks after the interests of retirement funds, trustees and principal officers in the retirement industry.

FCB10020187JB/E

ADVERTORIAL

IS YOUR RETIREMENT SCHEME TARGETING GOOD RETIREMENT OUTCOMES?

By Andrew Davison, Head of Investment Consulting: Old Mutual Corporate Consultants

Professional boxer and two-time world champion George Foreman once quipped: “The question isn’t at what age I want to retire, but at what income.” For every employee who dreams of a comfortable retirement one day, Foreman hit the nail squarely on the head with this statement. While the typical retirement age for South African employees is 65 years old, reaching this age is by no means a guarantee of a happy and financially secure retirement - even if you have been a member of your company’s retirement fund throughout your working life.

A financially secure retirement depends on making sound decisions during the two key phases of one’s life, namely accumulating enough savings during the working years and then converting those savings into a life-long income after retirement. Employers, through the retirement funds they have in place, have a responsibility to help their employees to achieve such a successful retirement.

Delivering on this responsibility requires two things: Firstly, employees need to be guided to make good decisions about how much of their income they need to save towards retirement while they are working and how these contributions should be invested. Secondly, they need

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assistance and knowledge to allow them to decide how best to use their accumulated savings at retirement, to buy a pension that will keep up with inflation and last for their lifetime.

Let’s take a closer look at both responsibilities.

1. ENSURING YOUR EMPLOYEES ARE SAVING ENOUGH EACH MONTH AND INVESTING THESE CONTRIBUTIONS CORRECTLY Few employees have the financial knowledge to set appropriate retirement goals or make the right decisions regarding where to invest their retirement savings to ensure they accumulate sufficient savings to give them the best possible pension throughout what could be a lengthy retirement.

As a result, the monthly contributions of many fund members are too low. This is usually because people don’t take a long-term view and prefer to maximise take-home pay now, rather than putting enough of it away for the future.

Retirement funds often don’t provide enough information to educate members on appropriate retirement goals and the impact of their decisions. Common mistakes include not explaining the impact of

failing to preserve savings when changing jobs, not making it easy enough for employees to move their savings to their new employer, setting the minimum contribution rates too low so the choice of more take-home pay is too easy, insufficient education about the need for growth from the investment choice and the dangers of reckless conservatism.

To address these issues, employers need to fully analyse their employees’ retirement savings needs and set appropriate goals that the retirement fund aims to achieve for members, and then to identify the gaps that exist between where members are and where they should be.

This allows the management committee of the retirement fund to monitor the progress of all members of the fund towards reaching their goals and to make informed decisions with regard to the level of contributions, the retirement age, the investment default and any choices as well as appropriate options to allow individual members to rectify their personal situations, if necessary.

Often, this level of analysis requires the expertise of an external investment or retirement consultant, but the results of such analysis can turn a shot-in-the-dark into a carefully considered and well thought

ADVERTORIAL through strategy. This is a small price to pay for knowing that, as an employer, financial director or trustee, you have helped your employees to understand their retirement goals and, more importantly, achieve them.

2. A LIFE BEYOND WORK It’s a sad fact that most employees who are members of retirement funds are left to their own financial devices when they retire from their jobs. A change in mindset across the retirement funding industry is required. Members need to be encouraged and equipped to take control of their retirement planning with proper consideration of the time horizons involved both before and after retirement.

This is especially critical when one considers that people are living much longer today than they were 50 years ago.

Life expectancy after retirement has risen from around 10 years in the 1960s to over 20 years in the 2000s. And living longer obviously has a massive impact on any person’s pension requirements, both in terms of how much they save up before they retire, and how they invest their savings to deliver an income for the duration of their retirement years.

The latter requires a clear understanding of annuities, the products that convert a pot of money into an income stream. However, research by Old Mutual has shown that this understanding is lacking among retirement fund members. In fact, the 2013 Old Mutual Retirement Monitor found that almost 30% of respondents had never even heard of an annuity, let alone having even some insight into which one would be right for their needs. Yet this important decision really isn’t an easy one and there are many different types of annuities with different characteristics and features.

While retirement reforms aim to place the onus on funds to provide members with a default annuity option, this is not enough.

Every member’s circumstances and needs are unique and funds also need to take responsibility for educating their members about their ‘at-retirement’ options and to provide access to professional, cost-effective advice to assist them to make a sound decision.

Andrew Davison, Head of Investment Consulting: Old Mutual Corporate Consultants

CFO MAGAZINE • CFO.CO.ZA

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CGMAs ARE THE SOLUTION IN BUSINESS AND FINANCE

Chartered Global Management Accountant (CGMA) is the global designation for Management Accountants powered by AICPA and CIMA. 88% of the world’s Fortune 500 companies employ CGMAs to guide critical business decisions because they are trusted strategists who combine financial expertise, business acumen and create sustainable value across industries. The letters CGMA showcase your skill and experience globally and give you access to a wealth of resources such as news, continuing professional development and support throughout your career, ethics and professionalism, community and networking and access to thought leadership.

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CORPORATE FINANCE Unearthing the Sibanye Gold success story with CFO Charl Keyter

From risks to results

The project that started with a handful of South African reject mines from Gold Fields is currently stealing the show as the success story that is Sibanye Gold, now venturing into platinum and beyond. We chat to CFO Charl Keyter about what it takes to turn risk into results – and dividend.

“We were willing to do things differently and make the difficult decisions.” By Toni Muir

C

harl Keyter was first introduced to mining as a child, when he used to visit the Gold Fields operations with his dad’s cousin. He was fascinated. “The atmosphere on the mines in those days was almost holiday-like,” he recalls. “Maybe because we only ever spent a day or a week there, every so often, but the facilities and the people living in the community, the activities they did with the kids, there was always this great atmosphere.”

Having spent his entire 21-year-long career in the mining sector, first scaling the ladder at Gold Fields and now as CFO at Sibanye Gold, Charl, a Chartered Global Management Accountant (CGMA), has gained nearly unrivalled insight into the inner workings of this often-unpredictable industry: “For a CFO, the mining space is unique in the sense that, if you compare it to manufacturing, for example, the CFO gets up in the morning, goes to his office – which is probably close to the manufacturing facility – and just spends a normal day there. Not so in the mining space. Because it’s almost like a mini community, you

deal with a lot of things.”

“We employ approximately 55,000 employees and with the pending Rustenburg acquisition this will increase to over 70,000 employees.

On a daily basis we house approximately 21,000 employees in 6,000 company owned and managed houses and single accommodation units and we provide meals to approximately 13,000 employees who stay in these single accommodation units. So in addition to operating a large number of shafts, metallurgical facilities and other engineering infrastructure, and providing safe employment to thousands of people, we also have to manage property portfolios, training facilities and healthcare facilities – those are some of the challenges we deal with that people outside the mining industry don’t necessarily encounter. Each of these activities has its own challenges and we need to ensure proper governance. So it’s almost a microcosm, compared to other sectors.”

Planning conservatively Since it was unbundled by Gold Fields in early 2013, Sibanye Gold has enjoyed a rapid rise to success

in a very short space of time, becoming one of the most dynamic mining companies in the country. It is the largest individual producer of gold from South Africa and one of ten largest gold producers globally. A JSE and NYSE-listed entity, Sibanye Gold has a current market capitalisation of R63 billion, significantly larger than when it listed with a market capitalisation of about R11 billion.

“Sibanye Gold has gone from ugly duckling to swan.”

“Sibanye Gold has gone from ugly duckling to swan,” says Charl, quickly emphasising that the company is careful not to become complacent. The CFO says the single biggest factor influencing the company’s financial performance is the gold price. To counter this, they plan conservatively, he says. “The gold price year to date has averaged above R600,000 per kilogram. Last year the average was R475,000 per kilogram, but the operational plan

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CORPORATE FINANCE for 2016 was planned at R450,000 per kilogram, which includes a margin.

Shareholders don’t like us to hedge the gold price because it reduces potential upside if the gold price rises and it is something they prefer to do themselves. We have other ways to deal with the cyclical nature of our business. For example, we can shut down some low grade shafts and remain profitable.”

Restoring life For Charl, the reasons behind Sibanye’s success are two-fold: “Under the CEO Neal Froneman’s guidance we brought in new management. Neal’s message was, let’s throw out the bad and the ugly elements we encountered in the business and take the best that we have and build on that. A large element of our success was that we were willing to do things differently and make the difficult decisions.

Equally, if you look at how middle management and our employees have benefitted: Gold Fields had made a strategic decision to diversify internationally and to limit exposure to South African labour-intensive gold mines. Sibanye turned the operations around and basically restored life to these assets, and is now investing in growth projects.

"Instead of a closure or exit scenario we had a long life growth scenario and a lot of employees have bought into that and are more motivated.”

So instead of a closure or exit scenario we had a long life growth scenario and a lot of employees have bought into that and are more motivated.”

The first thing management did after the company was unbundled was to look within, introspectively and critically – something that is never easy, says Charl. One of the first problems identified pertained to staffing – overstaffing specifically – and in the first year the 42,000-strong staff contingent was reduced by 7,000, to more sustainable levels. This reduced costs and resulted in more profitable but more importantly, sustainable operations which could provide employment over a longer period. “Our investment strategy is underpinned by our commitment to pay industry-leading dividends, so by reducing the costs and becoming more profitable and extending the lives of these assets, we managed to secure our ability to pay those dividends,” Charl says.

There was also a lot of work that needed to be done to generate interest from international investors. As far as they were concerned, South African gold mining was a risky investment. “We managed to convince them we could sustain decent cash flows and could pay industry-leading dividends, and they accepted this and that’s why many international investors stuck with us,” Charl says. “We also started out with a chunky bit of debt in our first year – R4.2 billion.

One of first things I discussed with management was decreasing this. In the first year we got it down to R2 billion, which gave us a stable profile from which to operate.”

Platinum With this attended to, the company began looking to acquisitions, the feeling being that, given where the commodities cycles were, the timing was appropriate. The first

acquisition was the Cooke asset, which was closely followed up by the acquisition of Wits Gold. The team then cast its eye wider, changing the focus from asset acquisition to rather target company level acquisitions, where they saw opportunity for synergies. They began looking at the platinum space. “We had casual conversations with most of the platinum players in South Africa in early 2014, though they indicated there were no deals to be done at that stage in time,” says Charl. “We did a lot of research as far as platinum prices and fundamentals went, agreeing that in the medium term there would be a recovery in platinum prices, so we started to intensify our talks with some of the platinum companies.”

In September 2015, Sibanye put in an offer to acquire Anglo American Platinum’s Rustenburg assets, and made an offer to Aquarius Platinum shareholders, who went on to accept their offer. “Between these two operations our aim is to leverage up to R1 billion of synergies over a four-year period. The Aquarius transaction was concluded in April 2016, and at a high level we can already see some of those synergies flowing through.

So the business case for acquiring those is still valid,” Charl says.

Speaking to the role of the finance team in all of this, Charl says with the Cooke transaction, the team was actively involved in the due diligence process. “Neal drives it hard from a CEO level, but ultimately these things play out in the finance space,” he says.

“Because we have defined ourselves as a dividend-paying company, I sometimes have to remind management that the dividend is always first and that any acquisition we do will have to sustain the dividend profile. We won’t easily get involved in early-stage, capital-intensive projects, as it takes cash away from the business. So one of my main roles has been as gate keeper on the dividend-paying side.”

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CORPORATE FINANCE

Charl Keyter with Telkom CFO Deon Fredericks

The hospital conundrum We asked Charl Keyter what his toughest decision has been during his tenure as CFO at Sibanye Gold. His answer is surprising: selling hospitals.

“For years Gold Fields wanted to sell its hospitals. When the industry at its peak employed 500,000 people it made sense for the gold producers to have hospitals, but as production and employment dropped, it didn’t make sense anymore. The discussion previously had been pursued until there was pushback from the unions.

However, we knew at Sibanye that our new healthcare strategy was the right decision and after careful consideration I decided this was the time and we sold the hospitals in 2014.”

“Our new strategy is to have clinics on the shaft heads, where

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a broad range of ailments and illnesses can be treated and simple medical care administered. For serious cases we use a referral model. We don’t hesitate to airlift someone when needed to the best hospitals for the specific treatment required. We have literally saved many lives this way.”

“Because of the clinic at the shaft much less people miss work for medical reasons, they can now go to the clinic before or after their shift. The healthcare costs in today’s money reduced from R400 million to R285 million, but this was not even the main reason to do it. It is about sustainability.”

“The biggest risk to the whole process was industrial action by the unions, understandably so, as we had to part ways with people who were employed by us at the hospitals, some 400 in total. There were no strikes in the end and it was a fairly smooth process. In our conversation with the unions we are always straightforward and never plead poverty – and we also always make sure we have a direct line of communication with our employees. As a business, we need to do the right things. And the right thing for the shareholder and the employees is the same in the end.”

CORPORATE FINANCE

“Where a lot of guys have almost thrown in the towel, saying it’s too tough to operate here, we see a lot of opportunity in South Africa and that inspires us.”

Shareholder value Strategic decisions are made as a team by the executives and according to Charl, is a fully inclusive process, with a lot of value attached to individuals’ opinions. “Neal runs a pretty inclusive ship. It’s not a case of everybody’s opinion matters but the relevant ones do. In the early days we got together and decided where to start, and laid out an operations

strategy. This wasn’t the ultimate strategy for the company, as we first had to plug the holes in the boat before we could sit and plot the course to where we would ultimately like to sail, but once we’d gone through that tough process upfront we talked about where we wanted to take the company. We decided our strategy was to create superior value for shareholders and all other stakeholders. We cannot survive in

the long term without any of them, including our communities.”

South Africa’s mining sector can be a volatile space, rocked by wage disputes, legislative ambiguity and fluctuating commodities prices, but Charl thinks there is still good business to be done. Sibanye Gold is now not only looking at platinum, but also at energy, including coal and possibly beyond. “Where a lot of guys have almost thrown in the towel, saying it’s too tough to operate here, we see a lot of opportunity in South Africa and that inspires us.

We see it in both the gold and platinum sectors. We don’t have specific global aspirations. While we might diversify into Sub-Saharan Africa, the majority of our operations will always be in South Africa. We are here to stay.” l

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CORPORATE FINANCE CFO event report: culture, fast integration and planning key after M&A transaction

The day after the night before…

Charl Keyter (CFO Sibanye Gold), Cobus Grove (CEO DigiCore), Ryan McDougall (Group FD Trustco) and Walter Palk (KPMG)

M

ost M&A deals fail to create value and have a 50-50 chance of success, say experts. So how does one remedy this? Through better due diligence and planning, faster implementation and integration, and more attention to HR and cultural issues.

“The first week after we were acquired

by Novatel Wireless, I went to sit with management and tried to get an understanding of why they had bought us and what they had prom-

ised their shareholders. I then took that, came back home and developed a strategy to give them what they wanted to see,” said Cobus Grove, CEO Digicore Holdings, speaking at the CFO South Africa event on 21 July 2016.

Titled ‘Where the rubber meets the road’, the second event in a well-attended two-part series on M&A covered the CFO’s role post deal, including how CFOs meet the multitude of market, investor and board expectations, as well as how to best integrate systems processes and cul-

tures. Grove was joined by Deon Fredericks (CFO Telkom), Charl Keyter (CFO Sibanye Gold), Ryan McDougall (Group FD Trustco) and KPMG Partner Walter Palk.

Walter highlighted various “hard” issues, such as deal rationale, having a proper approach, attention to detail, pre-closing and post-closing, and getting the right advice. He also touched on some of the “softer” issues, including having a victor mentality, which he says does not get you buy-in. “In that post-signing phase, people have

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CORPORATE FINANCE

Takeaways about treasury Through some incredible tech-enabled financial discipline, CFO Colin Brown helped save Super Group from the abyss, setting the South African flagship firm on course again for massive expansion. Since then successes have been commonplace, with Colin winning no less than three CFO Awards and the group regularly reporting spectacular growth. Common denominator in most of Colin’s successes has been the pivotal role of group treasury. In the margins of the plenary M&A event on 21 July 2016, he provided some candid insight and valuable tips during a round table discussion with a select group of CFOs, moderated by Discovery’s Terrence Taylor.

“Never sign agreements with covenants that are out of your control, like an agency rating. This happened to us

expectations – shareholders, employees, the board – and failure to show traction and some quick wins can erode the value of the transaction.”

Sharing some lessons from the first 90 days post-deal after Telkom acquired Business Connexion, Deon mentioned the importance of understanding what you’re buying because “sometimes you think you know but actually you don’t”.

He also highlighted the need to plan properly and ensure you understand what the synergies will be, and cautioned CFOs to be mindful of the culture of the company being acquired. “Try to keep that entity independent and entrepreneurial as far as possible,” he said.

Charl talked about getting an organisation “to move with you” when you are the acquirer, the role Sibanye Gold regularly plays. “Once you’re open and honest you take your people along with you. When you acquire something and the deal is effective, everybody sits there scared.

You have to give certainty and set the ground rules. That’s how you get people to come along with you.”

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and this recently happened to PPC as well.”

“The heartbeat of cash informs you quicker than management reporting.”

“Be careful of what CFOs and FDs of divisions do, especially when they start borrowing from each other or guaranteeing each other’s loans.”

“Group Treasury should have the relationship with all the banks.”

Deon addressed the need to do a second round of due diligence – something he called complementary due diligence. “You must have it all in an upfront agreement so when you finally sign the deal you can tick that box,” he said. Ryan agreed: “One of the things that often gets ignored, is understanding how people go about their accounting systems, or checking whether the company’s tax affairs are up to date. It is important to get the detail right. It’s impossible to get a business up and running if the groundwork is not set in the beginning.”

Finance needs to set the tone and communication is crucial, but the CFO panel cautioned against over-communicating, which can create suspicion, and sharing too much too soon, which results in the need for damage control. Charl’s advice was to rather have a carefully crafted communications plan to keep staff abreast of where in the process things were, and what remained to be done. For him, being “brutally honest” from the start is critical: “If there’s going to be fallout you must let people know that at the onset. As part of the cultural integration this

is important, because people look at what the new leaders do, and if those leaders shy away from difficult situations they stand to lose credibility.”

Cobus noted that often, communication comes from two directions – the company doing the acquiring and the company in the process of being acquired. He shared his experience of travelling to as many of his company’s business units as possible, to personally explain to the staff the benefits of what was happening. He added that a bi-monthly progress report approach has always worked well for him. “This helps communicate to people that all is on track and that we are ok,” he said.

The need to focus on the cultural integration of the involved entities was also touched on. “Cultural integration is the best indicator of whether or not you’ve been successful in those 90 days post deal,” opined Ryan. “If people have a shared responsibility and feel part of the culture of the organisation, processes and people and systems are all obstacles you can easily overcome.” l

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FINANCE INDABA The method behind the madness of the Finance Indaba Africa

Feeding a passion for growth “We have been blown away by the number of partners and visitors the Finance Indaba Africa is attracting in its very first year,” says Alex van Groningen, the Dutch entrepreneur behind the successful knowledge sharing event on 13 and 14 October 2016 at the Sandton Convention Centre.

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he phenomenal response to the continent’s inaugural Finance Indaba Africa speaks of the hunger finance professionals have for information and knowledge to help their businesses – and their countries – prosper, says Alex, the founder and owner of the company that proudly bears his name. In The Netherlands, Alex van Gronginen BV has built a renowned, double-decade-long reputation for crafting communities for knowledge sharing, networking and career building.

Now, with a solid presence in South Africa, the irrepressible entrepreneur is excited about the huge in-roads being made to revolutionalise finance practices in African countries – with the Finance Indaba Africa leading the way. “I quickly fell in love with South Africa when I started visiting the country many years ago,” explains Alex. Four years ago he launched his South African venture CFO South Africa, which organises events for finance executives – with the CFO Awards as annual highlight.

“In the course of the last four years, I have noticed the enormous hunger for knowledge sharing and networking among all South African finance

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professionals,” he explains. “That is why we started the Finance Indaba Africa! We want to feed the passion we encounter at every event we host.

We want all finance professionals to have access to inspirational speakers, practical information on the latest trends, access to the most relevant exhibitors and unparalleled networking opportunities.”

Describing The Finance Indaba Africa as “a game-changer for finance professionals”, Alex notes that it is poised to be the biggest and best event of this nature that the continent has ever seen. Consisting of a large expo and a conference, which will be based on the agenda of the CFO of the future, “it will be a place where finance people can showcase results and best practices, frankly debate challenges and solutions, experiment and try out products and make new connections,” says Alex.

Asked what he will consider to be a successful event, he smiles broadly.

“We have been blown away by the number of partners and visitors the Finance Indaba Africa is attracting in its very first year – with 60 exhibitors and around 5,000 finance professionals registered! But personally, I am already happy if one person finds a

job through the event, if one person learns something that will help his or her company make more profit and if one person is inspired to contribute to the future of Africa with renewed vigour.”

There are 81 keynote speakers during the two-day finance feast, which will also host the first ever FinTech Africa Awards. Among some of the biggest attractions will be talks by the doyen of corporate governance Prof Mervyn King, irresistible entrepreneur Vusi Thembekwayo and South Africa’s most inspiring accountant Coenie Middel. Alex is also flying over two of his most successful speakers from The Netherlands, ‘lifehacker’ Martijn Aslander and productivity guru Marcel van den Berg. “The event will be an annual finance extravaganza that African finance professionals simply cannot afford to miss.” l

FINANCE INDABA 5,000+ finance professionals, 60+ exhibitors, two days of inspiration

Finance Indaba Africa

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reasons not to miss it

Finance Indaba Africa has announced its presence this year as the annual expo and conference that finance professionals cannot afford to miss. With over 5,000 people attending, more than 60 exhibitors and dozens of inspirational speakers the event turns the Sandton Convention Centre into a feast of learning, networking and fun for finance buffs for two full days: 13 and 14 October 2016. We asked a selection of exhibitors why they are excited about the event – and what they’ll be talking about.

20.

Thandeka Zondi, director SekelaXabiso “The Finance Indaba is an important platform for our organisation, as it brings together the key minds involved in financial and ultimately the economic decisions in this country. We have retained our entrepreneurial culture, which has enabled us to deliver innovative solutions to clients that are always aligned with their needs.”

19.

Nadine Kater, general manager AAT(SA) “The Indaba presents an opportunity for us to engage with leaders in the finance field

about training opportunities for accounting technicians, whose practical knowledge is easy to apply to the workplace.

Sometimes, companies think that training is just a nice-to-have, so I will be presenting a case study on the actual ROI and focusing on financial and non-financial benefits of training in general.”

18.

Simon Jackson, director Futuresense “As a niche business consultancy that sells, implements and consults on the full suite of Oracle Hyperion financial software, Futuresense is in the unique posi-

tion of having the right tools, the right expertise and the right attitude to help finance professionals solve complex problems innovatively, simply and effectively. And where better to engage with these finance professionals than at the Finance Indaba?”

17.

Charles Savage, CEO Purple Group (EasyEquities) “The opportunity to present at and be part of the Finance Indaba is an awesome one. We look forward to engaging and learning more! It’s time for financial services firms to realise that they need to provide opportunities

for all South Africans to access the stock market.

We will also touch on how we believe asset management firms of the future will be shaped.”

16.

Gary Kartsounis, partner Crowe Horwath “The Finance Indaba Africa is the place to interact with leading finance professionals from all sizes and sectors of business. The event offers an exciting opportunity to showcase Crowe Horwath as a service provider of choice in the audit, tax and business advisory space. We look forward to the chance to meet personally with prospective

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FINANCE INDABA clients and to develop solutions to service their specific needs.”

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15.

Marius Fabian, CEO 4Most “As a conference for financial professionals, the Finance Indaba is set to create a unique environment. As a leading SAP Business One solutions provider and ERP Consulting firm, we will be addressing the issues of data integrity, transparency and availability – and we will be addressing some common myths regarding SAP solutions, namely that they are expensive, complex and only for very large companies.”

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14.

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Nick Braxton, national sales manager QuickBooks SA “QuickBooks, with 70 million users worldwide, is the global leader in accounting packages, with the most detailed audit trail currently available on an international scale.

There is a misconception that only small businesses and accountants can use our products, but we want to show that we are here to help finance professionals assist their clients to run more efficiently.”

13.

Zobuzwe Ngobese, SAIPA executive “The South African Institute of Professional Accountants (SAIPA) sees

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10 the Finance Indaba as the perfect platform to engage with top executives in the financial services sector.

It affords us the opportunity to share information about SAIPA, specifically in the areas of transformation in the profession, and competency-based training and the benefits of membership.”

12.

Advocate Eric Mkhawane, CEO Office of the Tax Ombud “We are a new office and of course we want the public to know more about us and what we do. It is important to note that when people receive a below-par standard of service from SARS, our office offers a free channel to air complaints.”

11.

Alban Atkinson, managing director Ince “Our business was built around helping firms to meet JSE compliance regulations, but we are now very much an investor-marketing agency that assists our clients to sell themselves

better to investors, with a particular focus on retail investors. We want to showcase a range of solutions in this particular space at our Finance Indaba stand.”

10.

Zahra Cassim, head of CIMA South Africa “The Finance Indaba presents the opportunity for the Chartered Institute of Management Accountants (CIMA) to share the new developments in the management accounting profession. We will talk about the new CGMA report ‘Joining the dots: decision-making for a new era’. High-quality decision-making has never been more important – or more difficult.”

9.

Prof Humphrey Gowar, Monash South Africa “Monash South Africa will be present at the Finance Indaba to share more information about our range of postgraduate degrees and programmes aimed at working professionals and those who aspire to study in the fields

FINANCE INDABA to showcase our technology, talk about the latest developments around our products and services, and speak to customers and potential customers. We’ll be talking about how businesses can use the cloud to manage their financials more effectively.”

of finance, business and management. We recently launched a professional Master of Business Administration (MBA) degree, which is now available as a study option.”

8.

Anna Puzone, Zetta Business Solutions “We have been partnering with CFO South Africa, the organisers of the Finance Indaba, for a while now. We want to take the learnings that we’ve gleaned over the past couple of years and showcase how we think we can improve processes, technologies, corporate performance management, big data analytics and visualisations.”

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5.

Carolina van der Ark, Transparent “We will be talking about how businesses can recover working capital, not only from eliminating double- and over-payments, but also from improving efficiencies and using our payment analysis reports. For instance, we provide freeof-charge reports on errors. We’ve found that in as many as 60 percent of cases, the mistake is on the supplier side. We aim to find out where things can be streamlined.”

7

7.

Mark Neethling, Bytes Technology Group “The business unit that I run focuses specifically on financial services in South Africa and surrounding countries. We have a portfolio of software and service solutions that are focussed on the middleand back-office operations of banks, asset managers and insurers. The Finance Indaba is a good opportunity to meet with potential customers in this space.”

6.

Steven Cohen, Sage One “It’s the biggest annual expo and conference for finance professionals, so we simply cannot miss it. For us, it’s a valuable opportunity

4.

5 2

Roy Clark, Clarkhouse Human Capital “I believe there are excellent synergies between what the Finance Indaba and Clarkhouse Human Capital are trying to achieve for the finance industry in Africa. I will be there to offer advice, guidance and assistance to those in the industry as well as provide insight into how the employment landscape is going to change for financial professionals and how to harness these opportunities.”

3.

Shirley Riddick, managing director Excel4apps “We will be sharing how our financial reporting products designed specifically for Oracle, SAP and PeopleSoft can eliminate time wasted on generating reports, leaving more time available for detailed analysis.”

2.

Patience Semenya, ACCA “At ACCA, we equip our learners with business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.”

1.

Nicolaas van Wyk, SAIBA “We see ourselves as the gateway to the accounting profession. We don’t try to be the leaders, but focus on providing access to anyone seeking a career in accounting. We sit down with you, work out a career development and training path and monitor your progress and facilitate mentorship. We also help you find a job and set up a practice.” l

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FINANCE INDABA Finance Indaba speaker Coenie Middel about the power of innovation

Mining needs a soul

Recipe for inspiration – Coenie Middel ”We have always believed passionately in the role accountants play in

“In every industry, ground-breaking leaps into the future are being reported on an almost daily basis. All except for one – mining. Could it be that our current world view limits the way we think about mining companies? Could we invent a more powerful, more soulful, more meaningful way to mining? I think we can,” says expert accountant Coenie Middel, who is one of the most anticipated speakers at the Finance Indaba Africa 2016.

J

ust recently, Elon Musk released his ‘Master Plan’ for Tesla. In it, Musk revealed that he is focussed on creating a sustainable future for our planet, and that he will likely reshape the fundamental nature of our society in the process. Indigo, an agriculture start-up the world was first introduced to in February, just released news of new probiotic seeds that grow crops which require less water to survive.

Earlier this month, Google switched on Faster – a 9,000km undersea internet cable connecting the USA to Japan, delivering internet speeds that are approximately 10 million times faster than your standard home broadband connection.

While telecommunications, healthcare, education, and even the non-profit sector enjoy headlines filled with inspiration, evolution and growth, the mining industry remains in a state of continued turmoil. And following the slow-

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down in demand growth over the past four years and consequent fall in prices and mining profits, the industry is in fact devolving.

Having spent over 20 years in consulting and seeing mining giants go through endless rounds of change programmes, cost reductions, changes in mining methods, productivity improvement strategies, feasibility studies, new IT systems, new mission statements, new scorecards or new incentive systems, I can without a doubt say that these traditional recipes we believe will bring about change are often part of the problem, not the solution. Traditional thinking didn’t result in the world’s first electric car or seedlings that yield ten percent more cotton with less water.

But is a new mining company model genuinely possible or merely wishful thinking?

And it’s not just our thinking that

needs to change. Outdated hierarchical pyramids place too much focus on who has power, while unfulfilled pursuits of ego have resulted in the mining industry losing its value. That is why investors are now looking elsewhere.

If we are to overcome the daunting problems of our times, we will need new types of mining companies – more purposeful businesses.

If you are one of a few players, if you feel called to create a radically more soulful, purposeful and productive mining company, then I would like to share more ideas with you on how to bring this about. Change, no doubt, will be met with some resistance.

However, as anthropologist Margaret Mead once said, “Never underestimate the power of a few committed people to change the world. Indeed, it is the only thing that ever has.”

I have no doubt that the world is ready and waiting for new innovative mining. l

FINANCE INDABA

creating a better world by helping to make businesses more successful, creating jobs and generating wealth,” says Coenraad ‘Coenie’ Middel, whose firm Middel & Partners was named as one of the most inspiring accountancy practices in the world and has been included in the recently published ‘The World’s Most Inspiring Accountants’ by author Steve Pipe.

SAICAs Yuven Gounden, recently spoke to Coenie and Steve about what it takes to be an inspiring accountant, how to go beyond tax, auditing and accounting and the approach young finance professionals should take.

Middel & Partners is one of only four firms in South Africa to feature in the book. At the announcement ceremony, Steve Pipe, who was the book’s author and led the research team,

said: “Over a hundred thousand accountancy practices from across the world were eligible, but after a rigorous 18-month research process only 57 of them from 10 countries made the cut. Along with the other firms in the book, Middel & Partners are helping to raise the bar for accountants across the world: inspiring an entire profession, and showing it how to make more of a difference by serving clients better than ever before.”

Founder Coenie Middel said: “We are humbled and proud to be named as one of the world’s most inspiring accountants. We have always believed passionately in the role accountants play in creating a better world by helping to make businesses more successful, creating jobs and generating

wealth. So it is wonderful to see our commitment to those things being recognised on a global stage.”

Coenie explains his core services as follows: “I provide strategic advisory and deal making services, and craft business models for clients and my own businesses to deliver value to all stakeholders by linking strategy with resources, finance and capabilities. My key focal area is making innovation a key strategy for short-term and long-term success, and establishing frameworks for radical and incremental innovation. By creating a lifecycle approach to running the business, and developing a strategy for success at every stage — from business plan to launch, to growth, and to maturity.”

More inspiration: Vusi Thembekwayo

One of the most anticipated speakers at the Finance Indaba Africa 2016 is Vusi Thembekwayo, the globally renowned public speaker, disruptor and investor from Wattville, Benoni. Known as ‘the rockstar of public speaking’, Vusi is expected to set the stage alight with his razor-sharp insights (and humour!) into building a business that does much more than just survive. How do finance leaders operate on the edge of chaos?

More inspiration: Martijn Aslander

The maverick Dutch ‘lifehacker’ Martijn Aslander has become a feared and admired sparring partner for South African boardrooms over the last few years. His wit, exhilarating and sometimes scary view of the future will be for everyone to hear at the Finance Indaba Africa 2016. Expect fast-paced analysis on the future of mining, the future of Africa and the future of the finance profession. Or isn’t there one?

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responsible leadership.

FINANCE INDABA CEO Terence Nombembe calls on CAs to give back to society and embrace integrated reporting

SAICA excited about Finance Indaba “As SAICA we are very excited about the Finance Indaba Africa, which will be held on 13 and 14 October 2016,” says Terence Nombembe, CEO of the South African Institute of Chartered Accountants (SAICA). “The event is a great initiative from CFO South Africa, where we can showcase excellence and the value CAs(SA) can contribute to society.” By Joël Roerig

S

AICA CEO Terence Nombembe calls on CAs(SA), particularly those in business, to register for the Finance Indaba Africa at the Sandton Convention Centre on 13 and 14 October, where SAICA will be a platinum partner along with dozens of other exhibitors, partners and sponsors ranging from ERP providers and recruiters to accounting bodies, banks and professional services firms. “I am very glad we are collaborating comfortably with CFO South Africa around the Finance Indaba. This way we can take the country forward.”

What can visitors to the Finance Indaba expect from SAICA?

“First of all, there will be a network of like-minded people gathered in one place,” says Nombembe, who wants to use the event to call on CAs(SA) to get more involved with the integrated reporting framework advocated by the International Integrated Reporting Council (IIRC) and supported by

the International Federation of Accountants (IFAC). “As SAICA we will be able to share thought leadership, with topics that will enrich our members in the work that they do. The Indaba should be a platform to consolidate and showcase examples of success stories that CAs(SA) are involved with in the trenches,” explains Nombembe.

“The Finance Indaba Africa is a great initiative from CFO South Africa.”

Collaboration with CFO SA SAICA’s commitment to the Finance Indaba is evidence of a new wind blowing under the leadership of Nombembe, who moved from his position as Auditor-General to become SAICA CEO almost three years ago. “Our focus

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FINANCE INDABA

“The ability to pull together such a big number of finance professionals for an event like this is hugely significant.”

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FINANCE INDABA has been on encouraging collaboration within SAICA itself, thus enabling us to operate better as a collective. We have also started looking at collaboration with other like-minded players and strategic partners. We do realise that we can effectively support nation building and be everything to everybody if we work collaboratively with others,” indicates Nombembe.

It is clear that he recognises that most South African CFOs are SAICA members.

Working with CFO South Africa is a logical way to equip SAICA members to get better at what they do and become pioneers of thought leadership. “The collaboration with CFO South Africa, especially around the Finance Indaba Africa, is a true example of the level of comfort that SAICA has about working with others for the common good of the profession.”

The SAICA CEO envisions that the annual Finance Indaba will be an important agenda setting event for the Institute and its members and associates. “The ability to pull together such a big number of finance professionals for an event like this is hugely significant,” he says. “There are many opportunities for topics, not only in 2016, but also going forward. What we then need to do as SAICA is follow through afterwards, because we cannot achieve what we need to in half a week. The Finance Indaba can be a trigger to get people thinking, thereafter, we need to follow up with implementation, leading to the next Indaba in 2017.”

Schoolyard bully Collaboration is a keyword in the thinking of SAICA’s leadership, which is keen to shed the image of ‘schoolyard bully’ that dictates to other organisations by the sheer power of its impressive membership. “There is no benefit in playing an elitist card in society,” Nombembe says. “Collaboration is a culture we have been working on at SAICA. We started working with every accounting body when the Forum of Accounting Bodies (FAB), was founded, of which SAICA chaired the first meeting. It is meant to brush aside the competitive posture that neutralises effectiveness.”

In the bigger scheme of things, it doesn’t make sense to compete with other accounting bodies like ACCA and CIMA for every yard, while

the qualifications might be complementary, he says. “If you look at issues of regulation and standard setting, there is a lot that binds us together. We also work together comfortably on an international level within IFAC, so it would be hypocritical if we could not work together locally.”

One of the themes of the Indaba is the Future of Finance. What is Nombembe’s take on that?

“Finance is the backbone of success of any enterprise in the world. That fundamental position ought not to be watered down,” he says. “At the same time the future is in integrating financial capital with other capitals, like human capital and issues of society and environment. In the end those are all issues of sustainability. Financial capital is one element and that is why the CA(SA) is viewed as a significant player in facilitating sustainability. The future of business needs to be driven by finance people who look at the bottom line with a view of creating sustainable value through all the six capitals.”

Role models There is a long way to go still, even within the SAICA ecosystem, Nombembe admits.

“Very few members have embraced this reality. The Finance Indaba is an opportunity for this awareness to be driven home. Not to force people into something they don’t like, but we need to make clear that CAs(SA) and CFOs cannot be operating in the back office and only make an appearance when numbers need to be discussed.”

Perhaps one of Nombembe's greatest passions is the potential that CAs(SA) have to shape society and to be role models.

“If I look at my own development, I was fortunate to be part of a university where Prof Wiseman Nkuhlu, the country’s first black CA(SA) and prominent member of the panel of judges for the CFO Awards 2017, was teaching.

I was also part of the accounting community in Umtata when he established his firm.

Especially the two CAs(SA) he produced, Sabelo Magwentshu and Wakeford Dondashe, were role models to all of us in that community, as we could relate to them as brothers, talk to them and shake their hands.”

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FINANCE INDABA Role models should always be people who are in close proximity to you as a CA(SA) or aspiring accountants, says Nombembe, steering the conversation towards the contribution SAICA members can make. “Teaching is an important thing that CAs(SA) should be considering, even if it is just guest lectures. Members, regardless of their occupation, can play a significant role at school and university levels. It is all about telling stories of how we have progressed to CAs(SA). That always relates to our young people and provides them with the courage to keep going.”

What it comes down to is mobilising the intellectual capacity of CAs(SA) for the greater good, something that doesn’t happen enough yet, says Nombembe. “We do request our members to find time to give back. The country needs us. The SAICA brand is not only about the qualification. It is also about how stakeholders view us as being responsible citizens. The little that CAs(SA) can do, for example, could be to donate some of our little time and money to ploughing back to the vulnerable communities. That will make a massive difference, as long as we do it communally as a collective. This will sustain our vision at SAICA of 'responsible leadership.'

We need to mobilise our members in business in a manner that will enable them to participate effortlessly. All we need is a little of your time.”

Representation of goodness Nombembe acknowledges that he is setting himself tough targets and even calls the job of SAICA CEO more difficult than when he was Auditor-General. “At SAICA we need to deal with a combination of stakeholders, including our members, who collectively have great potential to make a difference. By virtue of their position in society, CAs(SA) can play a big role in problem solving and social cohesion. Our members are very talented and enlightened. Without interfering with their primary roles, we want to demonstrate that they can make a great contribution to good governance, a growing economy and nation building. We have the ability to expose rich talents to schools, for example. As SAICA we have a great natural geographical footprint, not only in South Africa but globally, which as CAs(SA) we need to use

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as a representation of goodness in accountability, transparency, integrity and credibility.”

Nombembe says that soon after he joined SAICA, he realised this job was harder and more challenging than he imagined. “You would naturally think SAICA members have a natural affinity with the profession, but people are busy and many CAs(SA) are not doing the technical work that they were trained to do. Being a CA(SA) in today’s society boils down

“The role that the CA(SA) plays needs to be elevated and exposed – and we need to move beyond financial reporting.”

to how to use the ability to think in a structured, creative way. That is why the CA(SA) is well-placed to be leading from the front in terms of integrated thinking. The role that the CA(SA) plays needs to be elevated and exposed – and we need to move beyond financial reporting.”

Pointing to SAICA nation building pilots in schools, Nombembe says the Institute has “demonstrated that CAs(SA) can bring order where there is disorder”. There is a lot of potential. Something as simple as participating in school governing bodies can make a big difference. We have seen an amazing impact in the most dysfunctional schools. Something that is very easy for a CA(SA) makes a world of difference where the need is greatest. We are also extending these nation-building projects to vocational colleges, public health institutions and municipalities – and make a mass impact on skills development, public sector accountability and getting small business to be a catalyst for economic growth. We need to turnaround economic stagnation.”l

PUBLIC SECTOR Rendani Sadiki explains what it takes to be a public sector CFO

Integrity is everything For two long years Rendani Sadiki fought for what is right, after she took on her superior’s dodgy dealings. Who better to chat to about the tension between the incredible opportunities and the enormous pressure of working in the public sector than the current CFO of the Department of Rural Development and Land Reform? By Toni Muir

“

You have to be mindful of operating within the law at all times as a CFO in the public sector, because it’s your career on the line,” says Rendani. She speaks from experience, as she fought long and hard to prove that her rejection of a contract that contravened the law was the right thing to do, putting her personal and professional reputation at stake. “Honesty, trustworthiness and integrity are the most important traits for a CFO. You don’t compromise when it comes to that.”

The Department of Rural Development and Land Reform is mandated to create and maintain equitable land dispensation and acts as a catalyst in rural development to ensure sustainable rural livelihoods, which it does through various programmes and initiatives. There are 5,800 staff across the various offices of the department, 600 of whom are

in finance, and 12 of whom report directly to Rendani, who oversees strategic financial management within the Department – a mandate she says is quite broad. “As the financial strategist, I have to develop and implement financial strategies to manage limited resources at our disposal so that the department is able to deliver the services efficiently and effectively, and within budget.”

Rendani has been in this post for 18 months and is proud of what she’s achieved in a relatively short space of time. “When I first arrived there was no permanent CFO and there hadn’t been a permanent CFO for some time. So I had to first build the team and build trust in the team,” she says. “I’ve worked hard on cohesion, something I think makes for success in any role.”

While it was tough going initially, Rendani believes her and her team

have successfully identified those areas which need the most attention in terms of the current fiscal crisis, and work efficiently with very limited financial resources.

Brutal cost-cutting measures had to be implemented, and Rendani says she’s strict on ensuring the implemented policies are adhered to. She also brought integrated financial reporting to the department and enforces alignment between the strategic plan, annual performance plan and the budget.

“This has ensured that the budget is informed by performance plans,” she explains. “So, from strategic planning to the annual performance plan to the budget – they’re all linked. We also report monthly and quarterly so that we are able to track financial and non-financial performance and analyse them.

That gives a whole overview of the department performance.” Rendani sounds proud when she says the team achieved an unqualified audit

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for the department and for the DEEDS trading entity, and a clean audit for the ALHA trading entity.

Other key focus areas for Rendani are governance and compliance.

“When working in government, the governance and legislative frameworks are wide-ranging and every transaction that you process involves some sort of regulatory implications,” she says. “A key part of my role is to ensure that the compliance is not comprised.” While many CFOs find compliance something of a bane, Rendani seems to have this all figured out, though she admits it’s not an easy thing to do. “First, you must ensure everybody knows. Internally that’s easy.

“You mustn’t just say no, you must bring a solution.”

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Everytime there’s a new piece of legislation, I ensure people know about it. We’ve got a unit, we call it PPRM and internal control, which deals with policies. They ensure that changes are circulated and workshopped regularly to officials,” she says. “Training and constant communication is the number-one principle.

And when people don’t comply you must take them to task as a measure to enforce compliance.” Once you’ve got the internal sorted out, the external follows suit, she says, “because you have more control over external.

You say look, these are my laws, stay within these and you’ll be fine.”

An area of concern for many CFOs in the public sector is ensuring they work within the law at all times. In this regard, the public sector can be a very challenging environment to work in, Rendani says. “When you are a CFO, you’ve got to be part of a solution.

Colleagues may make requests that are outside the ambit of the law but you have to explore the prescripts before you respond. You

“I firmly believe that if it’s wrong, it’s wrong.”

mustn’t just say no, you must bring a solution. That person might not be intentionally trying to break the law, they might just not be acquainted with those prescripts.

So I rather try to advise them of their options.”

Rendani is no stranger to adversity. She says one of the most difficult things she’s ever had to do as a CFO was say no to a superior when he extended a contract with financial implications of over a billion rand without following the prescripts (section 217 of the constitution of the republic, the PFMA and the Treasury Regulations),

PUBLIC SECTOR

which was a contravention of the law. “That decision caused a lot of suffering for me,” she recalls. For two years the contract was the subject of a court battle. The Supreme Court of Appeal finally ruled the contract to be invalid, acknowledging that Rendani had been right.

“I think I appeared more than six times in various courts. It’s good to stand in your integrity, no matter what you’re going through. Standing up for something like that is really tough, though.”

Rendani recalls wanting to give up many times, though she says prayer and the support of a few strong women in her office helped see her through. “Going through that process for more than two years was difficult, but the respect I earned was immense. I can’t compare it to anything. But it wasn’t easy. I firmly believe that if it’s wrong, it’s wrong.

It’s about being resilient and not wavering when the situation gets tough. Through this experience I grew more than I thought possible,” she says. Given the chance, would

she do anything differently? “I have no regrets. For as long as the reasons are right I would do all of that again,” she says.

Thankfully, this experience did not deter Rendani from continuing to work in the public sector – an area where she feels she can make a real difference. “The public sector is such an interesting environment to work in because there are so many challenges but you’re working directly with people, so you get to see the difference you’re making in their lives,” she says. “You have to be a CFO but also put yourself in the shoes of the communities you serve. You’re not driven by profit but by service delivery. And it’s very difficult, because some of the communities’ needs can’t always be delivered due to budgetary constraints. But what encourages and motivates us is the effect and change in people’s lives through the services offered by the department. That element makes me want to stay in the public sector because it’s where I can make a difference; a tangible difference. That’s very fulfilling for me.”

Rendani cites political influence as one of the biggest challenges in the public sector environment: “You often find yourself having to balance political interests and the mandate of your department. You have

“You often find yourself having to balance political interests and the mandate of your department.

to ensure you manage the relationships, the compliance, the risk, the expectations, the resources – all these things become overwhelming at some point. You’ve got to have a higher power that keeps you going, otherwise you get exhausted.” l

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PUBLIC SECTOR Events for public sector CFOs are raising the bar

Change management and the power of storytelling Inspiration, education and networking are key in the series of monthly round table discussions for public sector CFOs that CFO South Africa is currently running in partnership with KPMG. This report provides a taste of the June and July events, which dealt with the nuances of change management and the power of storytelling for leaders.

“

Sometimes we change just for the sake of changing, without understanding the drivers bringing about that change.

But in order to deal with any change situation, you need to understand the reasons behind the change,” said Dumisani Ntombela, Academic Director at Worldsview Academy and an independent organisational development and strategic human resources management professional, speaking at the public sector roundtable event on 21 June.

ponent is always the people one.

According to Dumisani, this is because people are all different, and people are unpredictable. To counter this, change needs to be clearly led and driven and the ‘why’ made absolutely clear, he said.

The discussion shifted to the role

of the leader. “As leaders leading change, you must be very conscious even of your own bias and limitations, so that you walk the talk and people understand what you are doing,” Dumisani said. He went on to talk about IQ, emotional intelligence, and a new player on the board, spiritual intelligence; this being moral

The evening’s programme tackled the always topical subject of change management, asking CFOs to look deep and answer the question: are you a catalyst for change? Dumisani was joined in the discussion by Sean Doherty, CFO of the Investment Bank at Standard Bank.

While there are various areas of focus as far as change is concerned, Dumisani and Sean agreed that the most complicated com-

Peter Christie

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PUBLIC SECTOR judgement. “Those are the qualities that the leader needs to have and to demonstrate,” he said.

One of the CFOs in attendance asked the pertinent question of how best to get people to get on board with change. Sean said this comes down to practical things, such as the way the change is done. “As leaders we have been thinking about these things often for months, but then we expect people to absorb it in mere minutes. But it takes time for people to absorb it, and that requires an honest dialogue. That constant communication can’t be overlooked.”

Sean added that, rather than telling people how to do something, sketch a vision of the final outcome, because everybody’s ‘how’ is different, and there is more than one way to get to the same end solution. “The best teams I’ve ever worked on have been diverse, because that brings different ways of thinking and solving problems,” he said. Dumisani agreed: “It is easier for people to move with you than to be instructed what to do.”

In closing, Dumisani posed one last question: What would you do if you weren’t afraid? The CFOs were quiet, some shifting in their chairs.

The answer, he said, is that in the absence of fear we would perhaps all make that change and take that risk, because isn’t the real risk not taking a risk at all?

“One of the challenges for corporate leaders is that often, they are not good communicators or are not very effective communicators,” said consultant and academic, Peter Christie, better known as ‘Big Chief Talking Bull’. Peter was addressing public sector CFOs at a roundtable event on 27 July, which explored the power of storytelling for leaders.

According to him, what distin-

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Dumisani Dlamini, Public Sector CFO of the Year 2016, Nadine Kater (ACCA) and Simon Dakalo Mandlwana, who works with Dumisani at the National Arts Council of SA

guishes effective leaders is the ability to tell a good story and the ability to embody the stories they tell. “You’ve got to tell stories that resonate with truthfulness and you’ve got to embody those values in your day-to-day behaviours. Your storytelling must fit you like your clothing – comfortably.”

A story is a particular kind of communication that has certain features, Peter explained, and every story, irrespective of what kind it is (stories falling into four main categories, namely anecdotes, biographical dramas, historical accounts, and mythological or symbolic stories), has these same features. The first is a strong beginning and end, which the storyteller should know by heart.

The plot comes between these, and is the narrative or sequence of events of the story. It must be interesting and coherent, with a clear message. Characters are another important feature, and are most interesting when they are unpredictable. Allowing your audience to visualise what you are saying is important, and is where strong imagery comes into play.

“When we think about a vision, it’s a picture of a future state. We need to

ensure it is compelling in its imagery. That will stay with us longer and be better remembered,” explained Peter. Dialogue is crucial and makes the storytelling more powerful.

Changing voices makes it fun. The setting of the story must also be elaborately described, Peter advised: “Use your imagination and extend yourself to describe something originally.” Things such as emotion, tone of voice and gestures all aid in the delivery of a story, helping to make it more meaningful and memorable.

“Storytelling is a way of communing together, building a community.

Stories bind people to a common culture,” Peter said. “They can also be a good bridge into difficult situations or discussions, allowing you to discuss them in an easier way, rather than just diving into the topic.”

Wrapping up, Peter reminded the rapt CFOs about the importance of knowing your audience in order for your story to have the greatest traction. “Different audiences interpret stories in different ways. Just like different people tell stories in different ways. If you can relate to the people you are talking to, what you are saying should resonate with them,” he said. l

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XX CFO Rob Katz talks boxing, ultramarathons and the secret to Peregrine Group’s success

Lessons from the ring Boxing and long-distance running have taught Rob Katz leadership lessons that he feeds from on a daily basis in his “relentless” role as group CFO at Peregrine Group. In this candid interview he discusses the need for finance leaders to be both ruthless and human, and shares what he has learned in the ring, on the road and beyond. “You cannot afford to crack under the pressure. You can never go backwards, you have to go forward.” By Joël Roerig CFO MAGAZINE • CFO.CO.ZA

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Our era is poor in authentic heroes,” writes Rob Katz in a recent edition of Soul Sport, a publication by and for the Jewish community in South Africa that explores the fusion of sport and spirituality. A read through this gripping article about three Jewish prizefighters who were caught up in the holocaust reveals much of what Rob – chief financial officer at Peregrine Group – loves and stands for: contemporary history, biographies, Judaism, writing, order and structure, boxing and the amazing power of the human spirit.

“The youth from Poland, the fighter from Thessaloniki and the Sephardi Jew from Tunisia all tell of the horrors of traveling in cattle cars, of the painful separation from loving families and the violation and exploitation in the name of war and genocide. All three are bound together by two common threads: being Jewish and a love for the sport of boxing.” – Rob Katz in Soul Sport In 2016 Rob not only penned this piece, he was also nominated for the CFO of the Year awards for his successful tenure at Peregrine, an innovative niche listed financial services company within the wealth and asset management domain. After he let slip that he “grew up in the ring” during his childhood in Johannesburg and after he talked about the “tough” working environment and the role he sees for himself as a mentor to his staff, CFO Magazine decided to look Rob up in his office in Sandton and interrogate him on the lessons CFOs can learn from boxing and long-distance road running.

“I like to read and write,” says Rob, when asked about his Soul Sport article. “I also get interviewed on a boxing talk show quite often,” he reveals, showing some YouTube footage of the internet show Hot Boxing Talk, where he is introduced as a boxing historian and discussed the

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legacy of the legendary Muhammad Ali, who passed away in June, calling him “the greatest in heart and the greatest in toughness”.

Scrolling through his phone, Rob then shows another video, in which the CFO is donning gloves and having a go at a punching bag. He later says that he was “a very average boxer” when he grew up, never able to dedicate as much time as he would want to the ring, as studying at night and working during the day got in the way. But he clearly still loves to throw a punch.

“As you take on better opponents, the margin of error decreases and the ability to fail increases.”

CFOs can learn a lot from it. “Boxing has taught me it is lonely in the ring – and it is lonely in leadership. The higher up you are, the lonelier it gets and the more slippery the slope. As you take on better opponents, the margin of error decreases and the ability to fail increases. The same thing is true when making a career as an executive.”

Both long-distance running and boxing dictate that you cannot go backwards, says Rob. “As a CFO you are often faced with long, relentless hours of working through decisions or long meetings where you have to be on top of your game all the time.

You need to be well-prepared technically, mentally and physically. The discipline that is required in my sports has provided me with practice for the long hours I work as a CFO, either in meetings, doing research or putting together presentations for the board. You cannot leave anything to chance.”

No room for error

Lonely in the ring “Boxing was my first passion,” says Rob. “As I got older, I wanted to find a sport that was social and physical and I started long-distance running.

If you want to keep fit consistently, you have to participate in a sport that you like with people that you like, just as in your work you need to do a job you like with people you like. The advantage about long-distance road running was joining a club like Bedfordview running club, where lifelong bonds and relationships were formed with people from all walks of life running up big hills at five in the morning training for Comrades Marathons.”

Boxing and running require a methodical approach, discipline and long hours. No wonder Rob says

No doubt there is a significant dose of adrenaline that stimulates both the sportsman and the CFO to keep going and stay focussed. “It is not normal to take punches or run 89 kilometres, but if you condition yourself you can do it. It often gives me an advantage over other people. I can outlast almost anybody.

Being a CFO is very pressurised and it is relentless. You cannot afford to crack under the pressure. Just like in the ring and on the road, giving up means failure. You need to carry on.”

“Being CFO of a listed company is no joke!”

LEADERSHIP These lessons are becoming more pertinent each day, says Rob. “There is no room for error. Being CFO of a listed company is no joke! It is also important to note that as technology is speeding up, the CFO’s decision-making process needs to accelerate too and it is increasingly important to have high levels of energy. You need to be relentless and keep going, one step in front of the other.”

Being born into a Jewish family, Rob lives his religion, which is “very structured and rule-based”, not unlike what is required from a CFO. “It is a way of life,” he confirms. “The values and philosophy of Judaism dictate everyday life. I enjoy reading Jewish law and philosophy.” A few weeks after Muhammad Ali died, the famous Romanian-born Holocaust survivor Elie Wiesel passed away.

“Elie Wiesel was one of my absolute heroes. Despite the horrors, like witnessing his father’s cruel death, he came out of Auschwitz with humanity and dignity. He still had hope and wrote and spoke about that, which culminated in him winning the Legion of Honour and Nobel Peace Prize in 1986.”

Focus on the core Peregrine is a niche financial services provider says Rob. “Peregrine attracts some of the most competent and capable people in the industry, real traders that stand out in their fields.

In these businesses we need people with the right mentality, people that can take the business forward through all kinds of economic cycles.”

Rob’s nomination for the CFO Awards came on the back of a massive and prolonged spike in the share price of Peregrine Group – the value of the company grew threefold between mid-2013 and mid-2015. As most CFO’s would, he deflects questions about his role. “I am just one of many people responsible for Peregrine’s

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LEADERSHIP success,” says Rob. “The Holdings team led by our group CEO Jonathan Hertz has enabled the people that run our businesses to “run the businesses”. In addition we have disposed of non-core businesses along the way and focussed on the core.”

UK-firm Stenham Property was one of the sales, as was Peregrine’s private equity business with its “choppy earnings”, says Rob. “We prefer predictability. With my background as CFO of the retail division at Standard Bank, I have a good understanding of the importance of annuity income.”

utive. “What I enjoy is the academic and people side of being a CFO. It is technically challenging. I work with a lot of people in a lot of disciplines and am integral to the strategic decision making. I believe in honesty.

Being a CFO in a listed company, if you lose trust once you lose it forever. I also believe you need to enjoy what you are doing. You cannot go to the gym and hit the bag and keep the discipline if you don’t enjoy it.

Work is the same.”

The success of Peregrine’s businesses is largely due to a number

of leaders, Rob calls them “real leaders in their industries”, who are both brilliant and in many cases exceptionally well-off financially. “The challenge is to make sure we can assist these leaders of the underlying businesses strategically and with financial muscle.

To do that we need to be clever, fair and human. Our secret at Peregrine is that we do not accept mediocrity. If you are not successful, we will part ways. Life is not a dress rehearsal and we certainly try to be honest all the time with our people.” l

Intellectual capital Besides running a nimble and effective group finance team, one of the most important aspects of his role is the relationship with the markets, says Rob. He adds that a thorough understanding of future growth prospects is vital. “The market looks to the CEO and CFO for guidance on the company and to find out what fair value is. We are proud of our success, but it has not come as a surprise. We have a fantastic amount of intellectual capital in the group. We are now getting recognition from the markets.”

Following on the theme about sports and its social side, Rob says the people side of work is crucial because of the sheer amount of time you spend together. “The influence of a leader on other people is enormous. You have a meaningful effect on their well-being. I view the people who work with me as my responsibility. I like to see them growing. I don’t mind people making mistakes, but they shouldn’t make the same mistake twice. I try to build people up, and it does require a big investment of time but it is certainly worth the effort."

Rob feels the intangible nature of Peregrine’s business makes it even harder to operate as a finance exec-

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Jonathan Hertz, Group CEO. Charlene Nolan, Group Financial Manager.

Heather Berrange, Audit Partner KPMG. Rob Katz, Group CFO.

Shoshana Foundation Besides boxing, running and working as a CFO, Rob Katz also runs a charity that he founded. The Shoshana (rose) Foundation aims to assist single mothers in need, by providing financial assistance and organising get-togethers. “I grew up in a single mother background,” says Rob. “It is difficult being a single mother. You have to be both a mother and father. Earning a living is challenging because often you have to focus primarily on your children. I can tell you some heart-wrenching stories.

That is why I decided to do something to help.” www.shoshanafoundation.co.za

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LEADERSHIP Double winner at CFO Awards 2016 Osman Arbee ready for new challenge at Imperial

Recognition for the mentor

Osman Arbee mentored many of the country’s industry leaders and once even untangled Nelson Mandela’s finances. The Imperial CFO is not one to boast about that, but in this interview he candidly shares his views on his upcoming promotion, his youth in Dullstroom, the two CFO Awards he recently won, and his drive to turn CFOs from “historians into partners”. By Lesley Stones CFO MAGAZINE • CFO.CO.ZA

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Osman about mentoring: “My whole life depends on mentoring and coaching, from clerk to managers and young partners. They all look up to you. I still talk to people I mentored at Deloitte and at Imperial, mentoring and coaching is what we do every day to ensure we get the best out of the team.”

F

ar from slowing down now that retirement age is looming, Osman Arbee is about to enjoy a serious promotion. The CFO of Imperial Holdings will become CEO of Imperial Motors in January, and will hold both posts simultaneously for three months while he grooms the next CFO to replace him.

“It’s not a bad way to finish off your career, running a big business for three to four years then retiring,” he says. “It’s a nice change at the right time of my life, working with people I enjoy working with in a business I know and enjoy. It’s an opportunity to use my brain in another way.”

Imperial Motors has a turnover of

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With Mikateko Tshetshe, CFO AstraZeneca Sub-Saharan Africa

R70 billion and an operating profit of R3.5 billion. It has operations across Africa, the UK, Germany and Australia and deals with vehicle suppliers in France, Korea, Japan, China and India.

At 57, Osman hasn’t considered early retirement. “I enjoy good health, I’ve got good family support and enjoy travelling, so there’s no need for me to stay at home and be a pain in the backside.”

Acknowledgement Far from being a pain, Osman is a very chatty, open and amusing person, happy to share the credit for his successes, of which there have been many. He’s been such a huge asset to the Imperial Group that he

earned two triumphs at the annual CFO Awards on 12 May 2016 – the Strategy Execution Award and the High Performance Team Award. He was very chuffed to win, he says. “I just do my job to the best of my ability, so it’s nice to be recognised by people in your industry. As you go up the hierarchy people don’t say thank you or well done, so I appreciate that acknowledgement from my colleagues.”

Winning the High Performance Team Award came because he inherited good people in the group and was able to exploit their abilities, he says, adding that the chartered accountants he works with have the innate skills, so success depends on how well you use

LEADERSHIP

With Telkom CFO Deon Fredericks

With Ahmed Jaffer and Nick van Niekerk of KPMG

them. “My skills are nothing – I take their skills, exploit them, give them leadership and guidance and empower them and let them feel like they made the decisions. Then one plus one will make three.”

That’s dreadful maths for an accountant, we joke, but it underlines his expertise in developing his people by providing proper leadership and guidance.

Change your life His own story was fuelled by the ambition to escape to a better life.

“When you’re a youngster growing up in Dullstroom if you don’t get an education you’re going to be stuck behind a shop counter for the rest of your life,” he says.

As a coloured child he couldn’t attend the local primary school, so he travelled to a school in Belfast every Monday morning and caught the bus back home on Fridays. He enjoyed maths and accounting lessons and saw it as an exit strategy.

“It wasn’t the money that drove me at that stage — you just want to change your life.”

Osman was one of nine children, and was the first person in the family to study. He spent 23 years in accounting at Deloitte, where one of his strengths became mentoring and empowering other youngsters who were also trying to rise above their circumstances.

Deloitte absorbed 80 to 100 new graduates every year and Osman

Osman on hedging: “The weak rand is a big issue, as we import 75,000 vehicles every year and you cannot pass on a 25% increase to the customer. We decided to enhance the group asset-liability committee (ALCO) by setting up an International ALCO, Africa ALCO and SA Hedging Group. The International ALCO will manage and control funding and banking requirements of the international businesses based in the UK, Australia and the European businesses. The Africa ALCO will manage the funding and currency risks in the 23 African countries we operate in outside South Africa. The SA Hedging Group aims to better manage the group’s hedging policies for SA Imports, reduce risks and forward cover costs, and protect profitability by locking in better hedging rates.”

helped to mould the skills and develop the careers of those for whom he was responsible.

He left Deloitte 12 years ago when a lot of accounting rules and regulations were changing. “I thought: I’m an entrepreneur at heart, do I want to get back into accounting standards and learn different things? I wanted an environment where I’d still fulfill my ambitions, but in a different way.”

He had private school fees to pay for his three children (his son later died in a car crash aged 18) and realised if he was going to make a change, it had to be then. “I was worried about approaching 50 and I had to make a call,” he says.

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Osman on his recipe for success: “Things don’t happen in isolation. You’re only as good as your people and there are a lot of unsung heroes. I have a strong wife and independent daughters, a very good PA and good CFOs in the divisions. They make me successful.

The way I talk to the CFOs of the business and stimulate them to challenge their CEOs is also important.

Problems are not that big when you break them up.

My philosophy is that when someone walks out of my office, he or she thinks he or she has solved the problem. I don’t need credit for it.”

The opportunity came when Imperial Holdings asked him to recommend a smart black chartered accountant to run its charitable arm, the Ukhamba Community Trust, which benefited 15,000 black employees. Osman asked if he wasn’t black enough to take the job himself, and they told him he was overpaid and overqualified. “I said I’m not greedy, make me a decent offer I can’t refuse,” he laughs. The offer was presented a week later on an informal piece of paper with four bullet points on it. “I left a 23-year career for a job with four bullet points,” he jokes.

Responsible CFOs At Imperial he soon joined the exec-

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utive committee, and within a year his boss realised that his talents were being wasted and gave him the additional task of helping to grow the car rental business. When the CEO of that division retired Osman took over, and later he became the CFO of Imperial Holdings.

One of the huge impacts he has had, has been to sharpen the other CFOs within the group into taking more responsibility for the corporate strategies. He’s adamant that CFOs must do more than count the numbers, and he’s written a training document to turn bean counters into strategic partners to the CEO. They must work with all the different operating units to come up with practical solu-

tions for the business, he says. “That wasn’t a culture that was familiar in Imperial, but if all you’re going to do is count money then I’ll pay someone half your salary to do it,” he says. “You have to give CEOs the best information to make decisions, then you’ve achieved your job. CEOs are quite lonely and they don’t have all the information, so you have to provide them with that so they make the right decision.”

For a potential acquisition, for example, the CFO must do the research to figure out if it fits the strategy, if they have the cash to pay for it and if the acquisition will make money. “Accountants are historians; we tell you what the numbers did in the last six months but the

LEADERSHIP

Osman on giving back: “Alongside the employee trust, we have also formed the Imperial & Ukhamba Community Trust, of which I am a Trustee. It is set up to help with the education of previously disadvantaged children by improving schools in the south of Johannesburg. Today we manage 17 libraries impacting 18,500 learners. By December 2016 we will have 20 libraries impacting 21,000 leaners. This costs the group about R10 million per year and we employ 50 people who were previously unemployed.”

“In addition, the group has set up 25 clinics, all over Gauteng in containers that cost R450,000 per container. We recruit nurses and receive a monthly fee to cover initial costs and in five years these clinics belong to the nurses. There is a desperate shortage of health facilities in the townships and these clinics are well located and the close access saves transport costs."

With JSE Limited CFO Aarti Takoodeen and Deloitte's Andrew Mackie

CEO needs to know where you will be in the next six months. We have to give them the information that makes the CEO look good. So that’s the philosophy I instilled in these people. We were historians and I made them partners to the CEO.” Now he’s moving back into a CEO role himself, so he’ll be able to test how effective his influence has been by whether the CFOs below him provide him with all the relevant information to make better decisions.

Think differently Osman sees himself stepping down when he’s 61 or 62, a few years ahead of the official retirement age.

“In a business like this the environ-

ment is changing so much in terms of technology, and our customers are no longer 40 or 50, they’re 30 and 40 and their buying patterns are different,” he says. A company now needs the fine balance between experience and the input of younger people who understand the new generation of customers.

In the past, a customer would walk into a car showroom and the salesman would give them advice on the most suitable vehicle. Now people Google everything and come in knowing exactly what they want and what colour they want it in, making the employees order-takers rather than salesmen. “The way we sold cars 20 years ago isn’t the same now

and won’t be the same in 10 years.

You have to reinvent yourself and employ people who are IT savvy and think differently,” Osman says.

The downside is that many youngsters come with an attitude of asking what the company can do for them, rather than what they can do for the company. That’s where his mentoring and guidance will come in handy again.

“You have to sit them down, develop them and exploit their potential.

Common sense isn’t always common today – they are so tuned in to information but you have to help make them practical. Sometimes they’re not as street-wise as we were because they have knowledge and a lot more money than we had.” l

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LEADERSHIP Futures researcher Morne Mostert explores intellectual humility and courageous decision-making

Multiple possible futures… and what to do with them “It seems that many executives continue to make decisions not only based on the past but even in the interest of the past or in its defence,” writes Dr Morne Mostert, Director of the Institute for Futures Research at Stellenbosch University in this guest article exclusively penned for CFO Magazine. He concludes that “the intellectual agility to engage simultaneously with multiple possible futures is highly likely to increase as a prerequisite for a chair in the boardroom of the future.” By Morne Mostert PhD – morne@ifr.sun.ac.za

I

f the mind of the executive was a set of financials, balance sheet resilience would be under threat, despite good cash flows.

Executives often have good insights, but incessant change, talent deficits, rising complexity, compressed time-horizons and raging stakeholder demands with globalised interests have all contributed to an intellectual tax on those with executive accountability for their portfolios and organisations. That responsibility is, self-evidently, for a future state. To navigate towards that future state, requires advanced anticipatory abilities for high quality decision-making. In a certain sense, all decisions may be seen as futures thinking, since no decision can be made for any other time. Despite the glaring, indisputable veracity of this observation, it seems that many executives continue to make decisions not only

based on the past but even in the interest of the past or in its defence.

As executives rise in seniority, the quality of their decision-making becomes ever-more central to their effectiveness. As figure 1 on the next page illustrates, the nature of their technical competence is often inverted to their seniority. This is not to suggest that they require less technical know-how, but simply that the nature of their technical competence mutates with seniority to a more macro-perspective, characterised by knowledge of cycles, patterns and meta-perspectives, in addition to the integration of their technical field into the ever-broadening fields of expertise of others, including peers, direct reports and seniors.

In addition to the evolution in the nature of their technical competence, seniority also implies an

expansion of their relational abilities – they must persuade, influence and build ever-growing networks of convergence. They must lead, motivate and inspire those around them to take on gargantuan challenges and believe in their cause.

As networks grow, so does the level of complexity of decision-making inside those networks. This means that executives face tremendous intellectual demands. One trend over the last few decades as businesses left behind a more industrial approach and mind-set, is that the executive’s tools have become dramatically less tangible. Issues such as customer loyalty, staff motivation, goodwill, management engagement levels and brand equity have been added to more traditional considerations like capex budgeting and hardware maintenance. The ability, therefore, to engage meaningfully with concepts

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LEADERSHIP Technical

Relational

Conceptual

Contextual

Staff

Fig 1. Mostert, M. Competence Evolution Matrix

Supervisory/TL Junior Management Middle Management Senior Management General Management Executive Management Board/Council

that have decreased in tangibility and measurability, requires that their cognitive processing (the methodology by which they think and make decisions) needs to be at the highest possible levels for strategic competitiveness.

Such networks further act as sensors of their environment, which may contain several opportunities and risks. These may be present not only in the immediate environment and current planning cycles, but also in the long-term and contextual environments. For this reason, contextual intelligence (the awareness and navigation of non-immediate factors that are relevant and potentially subject to influence) has increased dramatically as a critical determinant for executive success.

It is in the interchange of relational, conceptual and contextual competence that the ability to navigate the future emerges as essential for the senior executive. As executives grow in their careers, the maturation date of many of their decisions is extended and evidence of the validity of their decision-making is postponed, sometimes for several years. Consider, for example, that an executive decision for a merger or acquisition only proves its worth over multiple

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budget cycles, while technical challenges of more junior staff can be tested almost immediately. For that reason, executive decision-making reaches far into the future for both the organisation and its community of stakeholders, thus strengthening the case for the enhancement of the quality of those decisions.

The ability to navigate the future has therefore also developed strategic relevance. Far from concerning itself with prediction and implying a type of clairvoyance, futures thinking examines the ability to anticipate a range of possible futures. It requires the ability to discern from the broad realm of possibility those futures that may be more plausible. This set is often simply a first indication of likelihood and should be tested by what is probable. By the latter is meant a more considered, well-argued and evidence-tested case, based on a set of assumptions.

But this introduces a classical dilemma for futures thinking, namely the source data for decision-making. If the futurist is concerned with a time yet to come, then from which time is the data drawn? The obvious implication is that evidence from the past (as all

investment vehicles warn) is by no means an indication of the future. It is at this juncture that Preferability enters the fray. This suggests that all organisations and the executives who represent them have an explicit or tacit desire for a particular future state. Said desire is expressed in the form of decision-making. This can easily be proven by showing that not all executives in the same industry will make the same decision. The difference in their decisions can, at least partially, be explained by their different schemas (the totality of their unique histories) and their distinct expectations for what the future should hold in their view.

But the unique desirability of a future must always be contextualised by the range of possible futures, because for the futurist, more than one future is always possible, despite any evidence from the past or even present.

This perspective requires the unusual marriage of intellectual humility and courageous decision-making, since not making a decision patently constitutes a decision by default.

One way in which the range of possible futures may be navigated is simply to evaluate alternative futures. As seen in figure 2 above, the

LEADERSHIP Much room to manoevre Limited time; may already have passed Spatial

constellational structure

Q2

Q1

Limited manoeuvrability Limited available time; proximal time horizon Q3

In Quadrant (Q)3, the executive takes the view that there is limited room to manoeuvre, and that time constraints further render the strategic option negligible.

In Q4, the view is taken that, despite structural constraints (such as legislation), there is ample time to conceive of and execute a workable strategy.

Q2 suggests that time is weighing heavily on the options available for decision-making, but that strategic options abound if the time compression factors could be overcome.

Q1 indicates a highly desirable strategic landscape, in which the spectrum of strategic options is broad and the time for achievement is ample. In this quadrant the next strategic step might be to explore a-symmetry in favour of the executive’s organisation, in order to prevent all competitors from following suit.

What this diagram illustrates is that, at the very least, different perspectives on the future may be imagined. For that reason, the mul-

Q3

Narrow, limited manoeuvrability Ample time to achievement

Temporal

Fig. 2. Mostert, M. Spatial-Temporal Futures

strategic executive may examine the spatial room to manoeuvre in relation to the time available to exercise a particular course of action before the strategic benefit expires.

Large structural scope Large strategic window of opportunity

pattern-based; evolutionary

tiplicitous nature of the future should not be underestimated. Even then, executives may be limited by a myopic selection of future options.

One way of illustrating such myopia is to distinguish between two foundational forms of decision-making, namely selective versus creative decision-making. In the former, the executive simply selects from the options currently available. A set of criteria is usually created that form the score-card of the ‘best possible’ option based on a predefined set of ideal characteristics. This is valuable for highly repetitive operational decisions, but for strategic decisions in a dynamic context such as that faced by the CFO of today, creative decision-making, characterised by innovation, may be more suitable.

In the creative version, options are generated that did not formerly exist. Any conceivable innovation is an example of this approach – it is generative of new possibilities, rather than defensive of previous or current possibilities.

The future is by no means inevitable. No future ever is. It is subject to our collective imagination and design. Executives are therefore advised to make decisions on the likely evolution of a considered bou-

quet of possible futures, not simply on an extrapolation of the patterns of the past or even on current trends. Once the need to defend the past has been exceeded (and this includes transcending both emotional and specialisation defensiveness), decisions should be made not only for the future, but also based on the emerging spectrum of possibility. And this must surpass the current outlook on the future, and should include multiple futures with relative probability, including the decay, mutation or death of current trends and the birth, non-linear development and convergence of yet-unborn opportunities.

Metaphorically speaking, it is fair to argue that executive decisions are ‘forwards, not options’, by which is meant that ‘payment’ for the decision to obtain the gain or loss will be made at a future time and that the exercising of that right is the compulsory consequence of today’s decisions. Given the far-reaching systemic implications of executive decision-making, the intellectual agility to engage simultaneously with multiple possible futures is highly likely to increase as a prerequisite for a chair in the boardroom of the future. l

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Immediate ROI with AAT(SA) accounting technician training Which CFO doesn’t want less errors, better financial statements, shorter month-end periods and cleaner audits? This is where AAT(SA) can help and add enormous value, says its general manager Nadine Kater. “We are the only professional body that focuses on accounting technicians directly to professionalise their area of work.” By Toni Muir

“

My passion for education and training comes from the fact that it changes people’s lives in a substantial way,” says Nadine Kater, general manager of the Association of Accounting Technicians South Africa – AAT(SA). As a former high school Accounting teacher, Nadine has strong feelings about the value of education, perhaps also influenced by her forebears, as her father and

grandparents were teachers too.

“Education and training gives people not only an individual skill but something they can use to change their own circumstances and their family’s circumstances. It creates a positive cycle out of poverty.”

Formed in October 2008, AAT(SA) works with the South African Institute of Chartered Accountants (SAICA) to professionalise finance

support staff in the accounting profession. “AAT(SA) supports and regulates the profession for accounting technicians, registers them as members and encourages them to continue with continuing professional development (CPD),” explains Nadine. “We are the professional home for accounting technicians.

While other professional bodies do have qualifications in this space, we are the only one that focuses on accounting technicians directly to professionalise their area of work.”

The organisation adds quantifiable value to the finance profession, says Nadine, adding that to build strong finance capabilities within an organisation you need to build your team where the work actually starts, and that’s from the basic transaction level. “Developing competent staff at the basic, principle level of accounting adds value to the entire accounting process,” she says. “It adds value where CFOs and strategic people need to make decisions. If you get the work right at support staff level there are less errors, the quality of financial statements should be better, you should

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TRANSFORMATION see shorter month-end periods and cleaner audits.”

According to Nadine, the AAT approach is extremely practical. “For people already in a finance team, it’s open access. There’s no prerequisite qualification, so it allows those people to be recognised and receive a professional certificate and membership for the work they do – if they’ve been working in it for a while. We are also able to recognise their previous learning, so they don’t have to go back and start from scratch. We can look at their experience and incorporate that into AAT,” she explains.

“The way the coursework is structured and assessed, people learn to do the work in a competent fashion.

It’s not like traditional academics where you tie two things together – theory and practice. While they are learning they work through practical case studies, so they can change the way they work almost immediately.”

Asked where vocational training fits into the grand scheme of things, Nadine calls it a “fast-track route to developing competent finance teams” because adequately trained individuals are able to add value sooner. “So you are setting the tone for people being able to do the work in a better way, almost immediately,” she says. “I think it’s very undervalued in South Africa, especially in finance areas. You find vocational training in so many other fields, such as education, medicine, engineering.

There’s full cognisance that it needs to be integrated but in the finance field it hasn’t happened that quickly.”

Nadine offers insight into what she believes are some of the most pressing challenges that CFOs today face: transformation, skills availability and the changing nature of the CFO role. “Directly in their work CFOs are coping with basic matters such as optimising, cost reduction and just generally getting the finance areas

done well. They are also grappling with finance transformation in the face of change and linking that to the impact that technology has on the way they work. The role of CFOs has substantially changed over the years, and today is much closer to strategy.

Their numbers have to make a difference and lead to scenarios that allow the C-suite and the board to make decisions based on the facts around the numbers,” she says. “Skills availability poses another challenge.

There’s a gap between what’s being taught in education programmes and the actual practical skills that employers need. In South Africa there’s a huge skills shortage around finance, especially if you think about the challenges around finance transformation and technology.”

“AAT(SA) is a fast-track route to developing finance teams.”

With regards to what CFOs can do from a leadership perspective to help their teams to blossom and grow, Nadine believes it is important that everybody is kept abreast of the organisational strategy in order to understand their role in it, as well as how their role impacts decision-making. In this regard, mentoring and sharing knowledge and experience becomes critical, she says: “I think we need to be looking at the younger generation as willing to develop.

There’s a ‘good opportunity to grow your own timber’, as the saying goes.

CFOs need to look beyond compliance and onto the impact of the work they are doing in general, as well as on business objectives.”

The rest of 2016 looks to be busy for

AAT(SA) is a silver partner at the Finance Indaba Africa on 13 and 14 October 2016 at the Sandton Convention Centre in Johannesburg. “The Indaba presents an opportunity for us to engage with leaders in the finance field,” says general manager Nadine Kater. “We are hoping to engage with firms about opportunities for accounting technicians, whose practical knowledge, unlike that gained in many other academic qualifications, is easy to apply to the workplace.”

AAT. According to Nadine, the organisation has a 2020 vision and is currently keenly focussed on creating sustainable membership growth, as well as further developing the brand of the accounting technician. “We want employers to see the value of the accounting technician,” she says.

AAT has also started professionalising the public sector, Nadine adds, and has developed a unique qualifications offering for this sector. “We feel there’s great opportunity to change the public sector, which will add value to the economy together,” she explains. “If we can get financial management right at government level we’ll see reduced levels of corruption and government may well become an employer of choice. Ensuring that the country manages taxpayers’ money in a consolidated way should lead to better service delivery and more confidence in government implementing the objectives and plans.”

Asked what she wishes CFOs knew about AAT(SA) or better understood about the organisation, Nadine is quick to answer: “For them to understand that developing their finance support staff can have an immediate return on investment for the business and the strategic business objectives.” l

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LEADING THE CFO AGENDA

As the world’s largest professional accounting body, ACCA’s research and insights explores issues that matter in accountancy and the wider world.

Through our research we engage the profession, business, policy makers, standard setters, educators and the public to analyse current issues, challenge thinking, project future scenarios and provide practical insights.

Our research and insights covers a wide range of subjects, including finance transformation, sustainability, corporate reporting, risk and reward, audit and access to finance.

With the free ACCA Insights app for iPad, you can access video interviews, interactive infographics, findings of world-class research and trends, and issues crucial for business.

With these insights at your fingertips, you’ll be poised to develop your financial leadership and performance as a leading-edge or aspiring CFO. www.accaglobal.com

TRANSFORMATION Number cruncher and Young Farmer Award winner

Meet Sihle Ndlovu Sihle Ndlovu is a passionate farmer with a good head for numbers. Growing up poor motivated him to pursue a career in finance, as he hoped this would help him to build a better future. Fast forward to 2016 and 35-year-old SAIPA-member Sihle is on track to complete his PhD in Business Administration and has just received an #Agristars recognition award worth R50,000 from the Department of Agriculture, Forestry and Fisheries, sponsored by the MTN Foundation.

S

ihle Ndlovu’s love for farming began early, when he was a youngster herding cattle in Impendle village in Mpumalanga. He also enjoyed working with numbers and helped his parents with their finances, working out profits and pricing on goods they were selling.

“I then took an oath that I wanted to be a professional accountant,” recalls Sihle, whose parents had always placed a high value on education and worked hard to ensure their children received quality instruction. “Finance professionals play an important role in every organisation.

Working in a role which contributes to the success of an organisation will make you a respected business professional. As well as being a challenging and rewarding job, a career in finance offers opportunity and excellent financial reward,” he says.

Sihle says he was honoured to receive the Young Farmer of the Year Award: “When I look at the calibre of other young farmers who participated in the event, I can conclude that the future of agriculture is in safe hands in South Africa.” His farm, Virginia Farm, is located in the KwaZulu-Natal Midlands, in Boston,

and spans 360 hectares. On it he farms livestock (cattle and goats) and crops (cabbages, potatoes and yellow maize). He also has an underground natural spring on the land and wants to begin bottling this natural spring water in the future.

Despite some difficulties of late, given the extreme drought conditions, Sihle believes the future of farming looks bright: “I am optimistic that the next billionaire in Africa will come from the farming industry.” l

Demonstrating good business sense, Sihle intends to invest his winnings back into his business, and offer a portion to his staff in thanks. “The responsibility of winning is huge because I need to work with young farmers to develop them and offer training as well,” he says. “I have already prepared myself, as I serve on various boards for agriculture organisations and public entities to contribute significantly to the development of young farmers in South Africa.”

Asked what has motivated him over the years, Sihle says: “My parents have always motivated me. They taught me how to live in society. I work hard and believe in myself. I have learned how to balance life and am not afraid of failure.” His top tips for success: manage your finances effectively; negotiate everything; keep your expenses in check; network; invest by giving; get a good mentor; and polish up your soft skills.

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TRANSFORMATION Clarkhouse Human Capital’s Roy Clark talks diversity and transformation

The elephant in the room Roy Clark, managing director of Clarkhouse Human Capital, delves into why transformation and diversity remain such misunderstood notions, and considers how corporate South Africa can make these ideas work within their organisations. “As uncomfortable as this subject is to talk about, unless we acknowledge the elephant in the room we have no chance of becoming the diverse, powerful nation that every South African strives towards.” By Roy Clark

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ransformation, diversity in the workplace, organisational change, empowerment, inclusion – these are all terms that have been bandied about very loosely since South Africa’s democratic birth in 1994. Businesses were given mandates, policies were drawn up and haphazardly implemented, and a fervent misconception about the true meaning and purpose of diversity, empowerment and transformation, as well as an absolute apathetic view to its importance, arose. But why?

As uncomfortable as this subject is to talk about, it is also a deeply emotional one. Its roots lie in years of oppression, discrimination, imbalance, prejudice, segregation, and an iniquitous South African landscape where, based on race, ethnicity, colour and creed, education, a peaceful upbringing and opportunities were denied. So it is not an easy discussion to have. But unless we acknowledge the elephant in the room, along with all its

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dirty baggage, we have no chance of becoming the diverse, powerful nation that undoubtedly almost every South African strives towards.

are other steps that can assist in tackling the beast effectively for good end results. Each is addressed below.

Engage on all levels Usually a business is given a mandate to meet diversity and transformational goals. Many a time this mandate is passed on to HR or other hiring line managers, who then have the responsibility of sourcing and employing resources that match the transformational instruction. Should their innate thinking be that this is merely a tick-box exercise and that their actions have no implications on the business as a whole, then there is absolutely no way that diversity and transformation in its truest form can exist in that business. Given this thinking, they will default to what they know and hire what they know, and the cycle will never end. So how do we change this?

In order for transformation to work, it needs to be implemented from the heart and not from the mind. Thus, it must be made a heartset and not just a mindset. Once this is done, there

It is key to engage with all levels of your business – from the CEO right down to the cleaner. If you want to implement change, empowerment and transformation, you have to get an understanding of everyone’s thinking to be able to explain how it will affect every single environment.

Design your transformation process to be inclusive Transformation strategies are far more successful if the people in the existing entities are part of shaping it. Let them help to design the strategy and work with you to land the vision together.

Create buy-in from the top down As with engagement, you need to create buy-in from the top down. Talk with the various stakeholders about how you will reach your transformation goals and encourage this intent to be clearly communicated to the

TRANSFORMATION

rest of the business and shareholders.

The power of remuneration A fundamental area where companies fail in their transformation and empowerment strategies is partnering remuneration and reward with transformation and empowerment outcomes. Transformation must be part of set key performance indicators, governance and financial reporting. This can be reflected in bonus incentives, pay and rewards.

If transformation becomes part of the job, and not just a nice to have, it will reach far greater successes.

Companies must reflect the demographics of their customers If a company expects to sell well to a certain demographic, their employee base should reflect this. Not only should the employee base reflect this diversity, it should also be remunerated and rewarded to encourage excellence in this regard.

Connect personally with individuals Not only is this a valuable point

when it comes to transformation and diversity but it is also a valuable point when managing people.

Making a personal connection will help you to get people’s buy-in when you need to implement change. Remembering birthdays, having one-on-one conversations and asking after an employee’s family all go a long way to building a personal connection with staff members.

Successful transformation needs an end goal As with any other business strategy, what are you hoping to achieve, what are the outcomes? Ensure this is measurable and that you have a clear goal, and most importantly, that this is communicated to all involved.

Beware of complacency Transformation and diversity marry perfectly with creating an innovative, forward-thinking business.

This means hiring people who do not think the same, have diverse backgrounds, different ideas, and varied experiences and knowledge.

To quote Andy Stanley: “Leaders who don’t listen will eventually be surrounded by people who have nothing to say.” Meaning that if you keep defaulting to what you know in your hiring decisions, you will eventually create a stale culture lacking innovation, a voice or ideas, and your staff will always tell you what you want to hear.

Those businesses which have really taken the goal of transformation and diversity to heart, which have stepped out of their comfort zone and endeavoured to become better corporate citizens, who have seen the profound effect that transformation can have on a business and our country, who have collectively stood together and visited uncomfortable, hard-to-communicate recesses of this ugly beast of our past and have seen the beautiful fruits that are born out of opportunities given, those are the businesses that will thrive and continue to grow, leaving behind an exceptional legacy in this magnificent land that is our country.

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CFOs weigh in Here’s what several CFOs had to say on the matter of transformation and diversity.

Walter Leonhardt, Financial Director at Coca-Cola Beverages South Africa “With regards to transformation and empowerment, of course there are many guidelines, codes and goals which we all have.

However, I do think it’s very much a question of style. If you have an engaging, friendly and approachable style, you probably empower by default. People all want to do the right thing. By ensuring people understand the context, when you give people freedom, they want to do the right thing. This empowerment encourages transformation and innovation. That said, not everything we try always works. For example, we had some

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quite progressive ideas for recruiting young candidates into our organisation, which didn’t work well. We subsequently adjusted and have appointed a number of great young people into our organisation, who bring in fresh (and sometimes pushy) alternatives on how we can do things.”

the right decisions to move the country forward. Having a framework that holds every industry or sector accountable is a step in the right direction. We are making good strides. But is there still room for improvement? Yes. Should we keep refining the legislation as time offers its lessons? Definitely.”

Seithati Bolipombo, CFO of Chancellor House Holdings

Clifford Appel, CFO at the Department of Social Development

“Legislatively it’s a step in the right direction. Putting it into a regulatory framework such as BB-BEE and AA, that’s a step in the right direction. Transformation won’t happen by osmosis or natural selection because at its core, it is a people thing. It comes down to people and behaviour and the decisions that people make. Therefore, you can’t afford as a country or as a government to leave it up to the individual decision-makers to make

“Finance is a key enabler, implementer and enforcer of transformation and empowerment. For me, transformation speaks about how the organisation can adjust to the needs of the public. We have a very dynamic customer and that requires continuous change. When you require change in people, you need to empower them. The staff needs to be transformed, just like management and our partners, because society is changing.” l

Committed to Transformation KPMG’s commitment to transformation is based on our conviction that it is the right thing to do and is a key pillar of our business strategy.

We strive to create a culture of inclusion that allows our people to be successful, ensuring that our development strategies are aligned with business needs, and enables our people to flourish and grow.

kpmg.co.za

2016 black leadership quotient:

60%

POLICY BOARD

55%

ADVISORY EXECUTIVE COMMITTEE

50%

EXECUTIVE COMMITTEE

© 2016 KPMG Services (Pty) Ltd, a South African company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”),a Swiss entity. All rights reserved. Printed in South Africa. KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG International”), a Swiss entity. MC15181

GET SMART Finance Indaba speaker Marcel van den Berg shares the secret behind productivity

Getting it done Dutch productivity guru Marcel van den Berg is one of the most anticipated speakers at the Finance Indaba Africa 2016. We sent our senior editor Toni Muir to chat to him and ever since the interview she’s been raving about Marcel’s incredibly practical approach. Read Toni’s writeup and be the judge.

W

e’ve all had days when our inboxes just never seem to empty, when we don’t get the time to do any or many of the items on our to-do lists, we spend precious time in what turns out to be a pointless meeting, and where we feel utterly flustered by the end of the day because we haven’t been nearly as productive as we needed to be. According to Marcel van den Berg, specialist training company Think Productive’s director for Western Europe, who will

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be speaking at this year’s Finance Indaba Africa, the key to being productive is… being in control.

“The word ‘productivity’ is interesting because it implies something.

We define productivity as achieving what you want to achieve with the least effort, or having the ability to achieve what you want to achieve with the least effort,” Marcel says. “Productivity is about reducing stress, worrying less, achieving more and enjoying what you do.” In this regard, it’s also important to be clear

about what you want to achieve, and knowing what the two or three main drivers of results in your job are, he adds. “You can relate it back to Steven Covey’s ‘big rocks’ analogy: the big things you want to achieve in life you must put first. The trick is learning how to do that.”

Something Marcel pegs as equally important in being productive, is knowing when to stop and take a break. He explains that the eighthour work day dates back to the industrial age, when much of the work was physical. Today, most of us knowledge workers use our brains to work, only that the brain cannot work effectively for a period as long as eight hours, or sometimes more. “It also needs to rest,” Marcel says. “If you rest, your brain is capable of producing better results. Though the thought of rest does feel counter intuitive.” In addition, the brain has a limited capacity to make decisions. “It’s not that you aren’t willing, it’s just that your brain’s ability to take decisions is over. It’s called decision fatigue,” he explains. “That’s why some people try to eliminate unnecessary decisions, as it affects productivity. Doing something like this saves thinking energy.” You get people, for

GET SMART

“Productivity is about reducing stress, worrying less, achieving more and enjoying what you do.”

example, who choose their entire week’s working wardrobe before the week begins, or plan out their meals in advance, or who even eat the same meals day after day to avoid having to make such fairly mundane decisions. It all comes back to attention management, Marcel says, when and how you use your attention to create the biggest impact.

You’ve surely heard the expression, ‘work smarter, not harder’ more than once. It’s all very well to say this, but what does it actually mean? “If times are busy and there’s a lot to do, the first thing that people naturally do is think they can deal with it by work-

ing longer hours,” says Marcel. “But that’s the wrong approach because there’s no end to that. So putting in more time is not the answer.”

According to him, it’s more about doing the right things, and thinking about what will create the most impact, as well as how you can manage your attention and use your brain in the best way possible. Thus, you need to look at output. “It’s arbitrary how many hours a week you want to work, so you have to be smarter about work and do things that will add value to your work,” Marcel says, citing the 80-20 rule as a good example. You also need to be critical about what you have to do

and what could – or should – be delegated, he adds.

So how did we come to get mired down in this productivity dilemma in the first place? What are we all doing wrong? “I don’t think we are doing things wrong, per say, I think it’s just that we’ve never been taught how to work,” Marcel says. “We learn a profession but never how to work or how to organise our work. We might watch how our colleagues or superiors do things, and learn from them, or figure out a way of doing things that works, but very few people automatically develop a way that gives them a feeling of being on top

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GET SMART of things.” Marcels says that when he first came across the principles of productivity he was upset because they are, in essence, quite easy to comprehend – though applying them is another thing.

“It’s not rocket science,” he says.

“These things can have a tremendous impact when applied. I don’t understand why we don’t learn them in school or university, or sooner in life.”

“Our attention span is not eight hours, it’s two to three that we are at our very best.”

Graham Allcott, founder of Think Productive, cottoned onto this glaring need, launching the company in 2009 in the UK. The company has seen superb growth in a relatively short time, and now has offices in the US, Canada, Australia and Western Europe – the latter being the entity where Marcel fits in. Think Productive’s courses focus only on the topic of productivity, covering personal productivity, meetings and emails, and its client base ranges from small organisations, universities and government institutions right through to multinational companies. The training model uses the analogy of a ninja, taking nine identified characteristics thereof and showing knowledge workers in today’s economy how to apply these in their everyday working lives. One of these, for example, is ruthlessness. Marcel explains: “Nowadays, when there is so much coming towards you,

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you have to be ruthless in making choices and determining to what you pay attention. For a long time, time management was the order of the day. Nowadays the focus is on attention management because our attention span is not eight hours, it’s two to three that we are at our very best.”

Zen-like calm is another ninja trait, and pertains to having a clear and open mind. “People carry a lot of stuff in their heads,” Marcel explains. “The brain is not capable of carrying all these loose things around and cannot prioritise to bring things up at the right times.

This is why your brain will remind you, in the middle of a meeting, to stop at the supermarket for something on the way home, for instance.

It’s much better to use your brain for creativity and new solutions, or putting together business proposals.

So we tell people to get everything out of their heads and teach them a system to do this, which allows them to be more present in the now and to give their full attention to what they’re doing at present.”

Marcel says there is a lot of momentum for skills development such as this, though it’s initially difficult to sell the concept, as most people don’t want to admit there’s a problem or that they could use a bit of help. “Many people we encounter love their work but are fed up with all the other things that come with it, like emails, meetings, document drafting, and so on, and are looking for a better way of dealing with those less-enjoyable aspects. People feel great relief when their email inbox is emptied, like it’s a burden they didn’t realise they were carrying. We’ve had an overwhelmingly positive response to the training programmes,” he says.

Marcel will be presenting at the upcoming Finance Indaba Africa,

and promises to touch on some of the characteristics of a productivity ninja. The session will include both conceptual and practical aspects. “We always start with the psychology, the thinking model and concepts, but then delve into the practical so people know straight away how they can apply it. I usually try to challenge people in the way they think about their work, and we always end up laughing at ourselves,” he says. l

Five top productivity tips: Nurture your attention Attention is as delicate as an egg. Easily broken, very hard to put back together. But look after it and it’ll grow and thrive.

Silence those pings Turn off all visual and audio notifications on your desktop or mobile devices. The ping is far too addictive and tempting – you’ll want to go and check.

Lower your expectations Realise you’ll never get everything done. Instead, make the best choices about where to deploy the capacity and energy you have to get the best results.

Unplug!

Only be online for tasks that absolutely need online access.

Get unplugged and offline when you need to fully concentrate on being creative.

Don’t use email as a ‘to-do list’ If you do, you’ll end up having a to-do list written by others, sorted in the wrong order!

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msa.ac.za/apply-today | 011 950 4009

GET SMART The CFO Case Study Competition draws 1,300 entries

Grooming future finance leaders The winning team will be crowned at the global finals on 14 October at the Finance Indaba

T

he CFO Case Study Competition was created in response to rumblings that tertiary education had become far too academic, leaving young graduates unable to meet the needs of business. “A vast majority is battling to make the mindset transition from the ‘what-you-know’ type education to the ‘what-you-can-do’ type the corporate world is looking

for,” explains Valentine Nti, CEO of The CharterQuest Institute and Project Executive Director of the competition.

According to Valentine, it is common for big businesses to invest in case study competitions to scout the brightest young business talents to hire. In this regard, the decision was made to launch the CFO Case Study Competition. Now nearing its final stages, the competition – which boasts a R100,000 grand prize, scholarship packages for the runners up, and two smaller cash prizes – has been incredibly well received, accepting close on 1,300 entries from 320 teams representing 53 universities and institutes from 25 different countries spanning five continents.

Valentine says they never antici-

pated this sort of response: “The entries were 300 percent higher than our best expectations for this 2016 first edition. We anticipated it would not be until 2018/19 before the competition began to boast such a huge response, so we are certainly proud of the business case for this project.”

The competition, which enjoys support from CFO South Africa, the Association of Chartered Certified Accountants (ACCA) and the Association of Corporate Treasurers (ACT), is now in its final stages, with six teams vying for the top spot. The winning team will be crowned at the global finals on 14 October at the Finance Indaba and also be given the opportunity to open the JSE Market on 18 October by blowing the famous kudu horn. l

UP’s Elize Kirsten named 2016 CFO Brand Ambassador Elize Kirsten, a lecturer in the Department of Financial Management at the University of Pretoria, was elected as the 2016 CFO Brand Ambassador in the CFO Case Study Competition, receiving R10,000 in prize money. One of Kirsten’s teams, Team UP 116, is one of the Top 6 teams heading to the semi-finals in October. “The CFO Case Study Competition was a great learning experience for my students,” Kirsten said. “Not only could they apply their technical knowledge to a real-world scenario, it was also an opportunity to develop and showcase their leadership skills and the ability to work in a team. I will definitely encourage my students to enter The CFO Case Study Competition next year!”

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Modern ERP Cloud Complete Financials, Procurement, Projects, EPM & Value Chain Global 23 Languages, Localized for 50+ Countries Real-Time Analytics & Social Collaboration Enterprise Performance & Security Ready

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GET SMART Why winning companies invest in the well-being of their staff

Health = wealth Healthier companies outperform the market by as much as 50 percent, recent studies indicate.

Our senior editor Toni Muir chatted to two top CFOs and two corporate wellness experts to find out what companies can do to invest in the well-being of their staff – and what ROI they can expect.

I

f health is an important measure of a country’s developmental status and needs, the same goes for a business.

In this regard, companies are becoming more attuned to the need to both measure and report on their staff’s health and well-being, as research has shown this has a significant effect on financial performance.

“The wealth of business depends on the health of workers.” – Dr Maria Neira, WHO “The wealth of business depends on the health of workers,” Dr Maria Neira famously writes in the report ‘Healthy workplaces: a model for action’, issued by the World Health Organisation (WHO), where she is a director. Recent studies agree with her, indicating that healthier companies outperform the market by as much as 50 percent.

Both US and South Africa-based

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studies have demonstrated that best-in-class workplace health programmes are linked to improved stock performance, according to insurer Discovery.

Slowly but surely that penny is dropping, says Derek Yach, chief health officer of Vitality Global, in a recent publication: “Business increasingly recognises this reality yet – with important exceptions – has been slow to embrace the potential for mutual benefit to profitability and to society that could be achieved by companies more explicitly and actively addressing health.”

Speaking to the correlation between employee health and organisational fitness and financial performance, Marcia says the former directly relates to the latter. “The cost of sick leave and absenteeism on productivity is particularly significant in the South African environment,” she says. “At a subtler level, other dimensions of wellness have further impact. Employee morale and engagement are now considered to be further measures of employee health. The phenomenon of ‘presenteeism’ – being present in the office but not productively engaged – has a negative impact on performance and productivity.”

Experts are quick to caution that This does not only include providing an optimal environment for promoting and maintaining physical health but also mental, motivational and social health, says Marcia Eugenio, CEO of South African company Phela Wellness.

“Organisational health is thus enabled by a culture that promotes personal and collective ownership of health and, as such, that is why it is important that employee health becomes a strategic focus,” she says.

Brett Tromp, award-winning CFO at Discovery Health, is one of the pioneers and biggest advocates of reporting on health metrics. He says looking after employees’ health is simply the right thing to do.

“There seems to be a big correlation between companies with a healthier workforce, or at least who invest in the health and well-being of their workforce, and greater returns on the stock market,” he says. “From an employee point of view we are seeing – especially with the millennial

GET SMART

Marcia Eugenio

Brett Tromp

Jo Pohl

Penny Abbott

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GET SMART generation – that people want more from a company than just a salary.”

deliver value if you are able to place your capital wisely.”

For investors and people who understand business, the term they are looking for is sustainability, says Brett. “We strongly believe the health of a workforce, which is a company’s biggest asset or expense, is an important factor in financial performance. Mental well-being and health all lead into employee engagement and loyalty. It’s another angle for the investors to look at, on top of standard measures. A company with a robust and healthy workforce, and with low absenteeism, is a more attractive investment.”

As more companies begin to consider health reporting, and as the metrics become more clearly identified, so different organisations have begun putting frameworks into place to assist companies in compiling the data. Last year a working group convened by Dr Penny Abbott, then Head of Research and Product Development at the SA Board for People Practices (SABPP), developed a concept for measuring human capital. It was aligned with both integrated reporting principles and King III and dubbed ‘The Human Capital Measurement Framework’. “Based on the framework, organisations will be able to use a standard template to report human capital metrics,” Penny explains. “Current reporting on human capital is inconsistent and provides more anecdotal than real human capital value measurements. The framework will provide a holistic picture on the state of human capital in organisations.”

Marcia agrees that there is an increasing legislative requirement for companies to look after the well-being of their employees.

Measuring employee health creates a functional awareness of this vital business dynamic as a strategic issue, she says. “Measurement is able to demonstrate, firstly, the health status of the employee body, but, secondly, with more recent sophisticated tools, to track trends in employee health and target the required preventative measures.”

Jo Pohl, CFO of Telesure Group, agrees that undertaking wellness assessments to determine employees’ health helps to determine emerging trends. “For example, does the person have the right job fit and do they see longevity and opportunity there for themselves? It also sheds light on their emotional load, because there’s a person at home and a person at work and you don’t know what they bring in with them each day,” she says. Such assessments also help measure the impact of absenteeism on productivity and turnover, Jo adds. “By being able to measure it we are quite excited as an exco because we know what we can do to address it. Our workforce is our greatest asset. You can only

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In addition to the human capital risks driving business value, the metrics framework is also intended to highlight other human capital risk that could be of concern to boards. “If an organisation underperforms on some of the metrics, it could pose a risk to the business.

The framework therefore serves as an early warning tracking system for things like reputational risk caused by a lack of employment equity,” Penny says. Although still in draft phase, the SABPP anticipates finalising the framework by the end of this year, after which it will be piloted within organisations.

Marcia believes the biggest mindset shift required by companies is in transforming the view of the employee from being a replaceable cog in a productive machine to

being recognised as a living component in a healthy system. “The health of the employee body represents the health of the company and has direct implications on performance. Consequently, company identity must now transcend the limit of brand, capital and market share to embrace its employee body,” she says.

As a CFO known for her practical insight and accessible leadership style, Jo thinks the staff’s well-being is a case of ‘walk the talk’ and that the example must be set by those at the top. “A debate we’ve had as exco is how we are seen to be living this in terms of our own wellness. We try to ensure that health and wellness is at the centre of what we do, but the exec has to live that,” she says.

“Also, what we as the company are doing to endorse healthier options, such as subsidising healthy eating at the canteen, or endorsing company sports teams. We talk through our turnover regularly. Financial wellness, physical wellness – everything we do talks to the holistic person.

The real way to change a mindset is to understand the consequence of not doing it, as opposed to the cost of doing it.”

Jo does emphasise that all of this takes conscious effort from the executives and a lot of collaboration. “Over time it becomes a habit or more about the corporate culture or DNA but it doesn’t happen overnight.” Brett agrees with the notion, saying it is easy to convince people of something that makes so much sense. But reality is stubborn, the Discovery CFO acknowledges. “It is a bit like with life – if you don’t have to do it, people generally won’t. But we believe it’s the right thing to do, regardless of whether it’s law or not.

We want companies in South Africa to treat their employees well in all aspects, and the well-being aspect is a big part of that.” l

GET SMART

Measures of employee health • • • • • • • •

Physical: enabling optimal functioning of the employee or team at the physiological level.

Mental: promoting optimal functioning of the employee or team at the cognitive level.

Emotional: ensuring optimal functioning of the employee or team at the attitudinal level.

Intellectual: providing optimal functioning of the employee or team at the ongoing learning and development level.

Vocational: ensuring optimal fit of the traits and capacities of the employee and team to the tasks and roles aimed at achieving strategic objectives.

Social: enabling healthy social relations between the employee and the team, including healthy relations with the broader social environment.

Environmental: ensuring the activities of the employee and team do not have a negative impact on the life-sustaining milieu.

Spiritual: facilitating the employee and team in experiencing a sense of meaning and purpose characterised by a defined ethos.

Source: Phela Wellness

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QuickBooks has a proven track record Intuit, the developers of QuickBooks Desktop and QuickBooks Online software was founded in 1983 on the premise that the future of accounting would be accounting software. Their first product was Quicken, a personal accounting package, which

I run on QuickBooks.

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OWN IT

achieved great popularity. Consumers liked it so much that they begged for a business version. The result was QuickBooks accounting software for small and medium sized enterprises (SME’s). As the saying goes, “the rest was history”. QuickBooks became the biggest selling accounting software in the world and Intuit became one of the most admired software companies in the world. With over 70 Million users worldwide, QuickBooks has a proven track record that is hard to match.

The South African arm of QuickBooks was launched in 1994 and in 2004, EasyBiz (Pty) Ltd became the exclusive distributor of QuickBooks Accounting and Business Software solutions in South and Sub-Saharan Africa. Since then, QuickBooks market share of small, medium and growing businesses in the South African and Sub-Saharan African market has grown substantially.

Currently, more than 70,000 businesses enjoy the quick to learn, quick to use accounting package that makes running the financial side of business easy.

Whether you are using an online or desktop accounting software, use the software that’s quick to learn and quick to use.

QuickBooks makes managing and running your business smarter, not harder as you can see how it’s performing every day of the week.

That’s why more businesses worldwide, choose QuickBooks.

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QuickBooks offers a full range of Accounting Software packages, from Desktop Accounting Software to Online Accounting Software, Payroll Software and 3rd Party Add-ons that assist users to make the most of their accounting software. QuickBooks as a brand and a product has the range available to satisfy the financial needs of start-ups, SMEs and growing businesses. There is, however, a misconception that only small businesses and accountants can use QuickBooks products, but QuickBooks is also able to aid finance professionals to assist their clients to run more efficiently.

Says Gary Epstein, Managing Director of EasyBiz QuickBooks, “QuickBooks as a brand and a product has the range available to satisfy the financial needs of start-ups, SMEs and growing businesses. We pride ourselves on our products being very easy to use and learn. Although there is no real accounting experience needed from an end-user or business-owner perspective, all the relevant information is there for finance professionals. QuickBooks is there to assist the business-owner without accounting expertise,

QUICKBOOKS DESKTOP For more information go to www.quickbooks.co.za

but also included in the package are all the features for the professional. This is what has made QuickBooks such a successful brand worldwide.”

Quick to learn, quick to use

TECHNOLOGY Which companies will make the African FinTech 100? What is the most innovative bank?

Mind-blowing success: African FinTech Awards With well over 14,000 people voting and an elite panel of 40 judges helping to determine the eventual winners, the African FinTech Awards 2016 (#AFTA16) are shaping up to be a “mind-blowing success”, to quote the man behind the awards, Alex van Groningen.

N

ot long ago FinTech had the financial services industry shaking in its boots, but lately banks, insurers and the like have started viewing the rise of innovative startups as an inevitable – and even exciting – revolution they are all going to be part of. FinTech isn’t disrupting Africa’s financial industry, it is building it! In this context, the inaugural African FinTech Awards

are shining a light on the best and brightest ideas in the scene.

“The main purpose of the African FinTech Awards is to celebrate innovators that shape the future of finance and acknowledge the work these companies did to make a difference,” says FinTech Africa founder Alex van Groningen. “We have an amazing panel of judges who will use their expertise, knowledge and ideas to determine the winners. The public

voting also plays a pivotal part in the eventual outcome.”

Since the voting opened to the public on 23 June 2016, social media have been brimming with excitement about the awards, with many FinTech firms calling on their fans to vote – especially on Twitter. When this magazine went to print more than 14,000 people had already cast their vote with hundreds of votes still streaming in on a daily basis.

Winners of the first round will be determined by online voting (weighted at 25 percent) and a high-powered panel of global FinTech experts (weighted at 75 percent). Based on this, the organisation will announce the African FinTech 100 in September – and the Top 3 in each category: Lending & Financing, Payments & Transfers, Retail Banking, InvestTech, Blockchain & Bitcoin and Most innovative incumbent bank. The Public Awards competition will run until the end of 12 October (one day before the event) and the FinTech companies with the most votes per category will win the Public Award in their category.

The second and final round will be on 13 October 2016 during the African FinTech Awards & Conference, which is an integral part of the Finance Indaba Africa at the Sandton Convention Centre. Here, the Top three FinTech companies within each category will present a pitch of maximum seven minutes in front of the top-notch panel of judges, who can ask additional questions for another five minutes. The judges will deliberate and winners will be announced on the same day. www.fintech-africa.com

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TECHNOLOGY

Financial inclusion and money-making: June’s FinTech Africa event

How can FinTech companies help millions of Africans get access to financial services? And what should FinTech entrepreneurs do to build viable, money-making businesses out of this? Those were some of the key questions during a spectacular FinTech Africa event on 23 June 2016, hosted at the beautiful Woodmead offices of Deloitte South Africa and co-sponsored by WeChat, the company that invented the social communications app that is taking the world by storm.

With more than 200 FinTech entrepreneurs, experts and financiers in attendance, the gathering at Deloitte was the biggest of its kind ever held in South Africa – and probably on the whole continent. It will only be exceeded on 13 October 2016 at the African FinTech Awards (#AFTA16).

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For the crowd in the room the unstoppable ascent of FinTech was no surprise, but there were still a few oohs and aahs when it was revealed that more than 60,000 people had voted for the European FinTech Awards, organised by the same Dutch entrepreneurs who are behind FinTech Africa.

The event kicked off with a welcome and a thought-provoking presentation by Valter Adão, who is in charge at Deloitte Digital Africa.

He spoke about Moore’s Law, joked about Nokia phones and noted how fast industries are being disrupted, starting with retail and followed by all others. “A lot of innovation is taking place at universities, and by ex-employees and entrepreneurs with some cash. Those are potential competitors for traditional players,” said Valter.

After three-minute pitches from a range of exciting FinTech companies, panel moderator Simon Dingle, host at Binary Podcast & Product Guy at Curve, then asked a panel of industry insiders if it is possible to make money from financial inclusion initiatives. Dominique Collett, driving force behind all RMI’s FinTech initiatives, said: “There are two things that you need to bear in mind with regards to financial inclusion; one being the impact on society, and two making sure that you are commercially viable." Her fellow panelist, Trudi Makhaya, founder of Makhaya Advisory, pointed out that “once you get past barriers like regulations and you understand the problem within communities you are trying to serve and that your idea has some scalable model that is possible then you can make money.”

Joining Dominique and Trudi in the discussion was James Ransome, senior manager Digital Banking Innovation & Strategy at Deloitte; Johan Meyer, founder at WalletTec and Pat Wilson of Quona Capital. “A lot of traditional banks need to move away completely from the traditional system, start from scratch and reduce the amount of political influence because that is also a serious game changer,” said James.

The captivating debate around financial inclusion also sparked interesting questions and commentary from the audience. Roy from Deloitte, shared that the three primary reasons people don’t use traditional banks anymore are that firstly, they are expensive, secondly, avoiding having to sacrifice the whole day queuing at the branches and thirdly, lack of money to put into the bank account. Pat Wilson agreed with Roy, saying “Yes, a lot of people don’t have money, but what the banks should do is provide people with access to new ways of making money, like selling airtime.” l

© 2016 SAP SE or an SAP affiliate company. All rights reserved.

COMPLEXITY HAS A MILLION IDEAS IT CAN’T MAKE HAPPEN.

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TECHNOLOGY IBM South Africa’s new CFO Sandra Atkins-Sadler brings international expertise to local shores

Focus on value Sandra Atkins-Sadler recently moved from the United States to join IBM South Africa as CFO. We spoke to her about finance transformation, work-life-balance and the biggest misunderstanding about IBM among South African CFOs.

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We have to shift the lens through which CFOs look at finance transformation and make it effective by focusing on value,” says Sandra Atkins-Sadler, who joined IBM South Africa as CFO earlier this year. “I think IBM can make a difference by continuing to invest in skills training and development of future CFOs. At the same time our business solutions will make a difference to the bottom line of current CFOs.” Sandra has occupied various senior roles in the United States since she started her career at the firm in 2000. She was appointed as CFO in February 2016, and CFO Magazine spoke to her in July, just after she arrived in South Africa. “I’d like to gain a better understanding of the local dynamics and culture as it relates to building a cohesive team internally as well as externally,” she says, regarding what she hopes to learn from the South African finance community. “I also would like to understand from other CFOs how IBM can enable their own finance transformation and leverage that to provide growth opportunities that are a win-win for IBM and their respective companies.”

Asked what she considers some of her most notable professional

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achievements, Sandra says the successes she has achieved in her career come from the fact that she has had the opportunity to work cross-functionally in most of the major business units in IBM. “I would say I’m most proud of my role as a financial services manager for two of IBM’s largest outsourced accounts.

These were important and high visibility accounts. It was very challenging. I was new to the role and the unit, there were some staffing changes, so the cards weren’t stacked in my favour. I had to conquer a steep learning curve to get results,” she says.

IBM’s professional culture has been much lauded and experienced professionals in the firm are often careful to talk about themselves.

However, CFOs are people too and Sandra admits that in her downtime she enjoys watching movies, especially stories based on actual events or biographies. “I also like to travel, though I don’t get to do much of that because I have a five-year-old child – my daughter – in tow.”

Like many CFOs in South Africa and elsewhere, work-life balance is a continuous struggle. “I try for more work-life integration,” says Sandra.

“It helps to have a supportive team at work and at home, but I realise

this isn’t feasible for everyone. As far as offering advice goes, I’d say, where possible, align yourself with a supportive team and be open to sharing your personal circumstances. You never know, there may be a manager who can relate to that and understand your situation. If you withhold that you don’t give yourself a chance to get help if needed. So, try to align yourself with a team that’s going to support you where possible.”

“IBM has played a vital role in Africa’s development for nearly a century and is part of the continent’s technological fabric.”

What is the footprint of IBM like in South Africa and how would you like that to change?

“IBM has played a vital role in Africa’s development for nearly a century and is part of the continent’s technological fabric. Some

TECHNOLOGY of our recent footprints include establishing our client innovation centre, and we opened a state-ofthe-art research lab last year to advance IBM’s African agenda. Our cloud data centre is the most recent one. We have 46 cloud data centres across six continents, and it’s remarkable that we now have one in South Africa as well.”

“My role as CFO is to expand on what we’ve done so far and build on it, and to ensure that our customers get the efficiencies and cost savings on which our value proposition is anchored. So I don’t want to change this, just build on it.”

“IBM is now emerging as a cognitive solutions and cloud platform company.”

What do you aim to achieve as country CFO and what do you expect to be your most challenging task?

“My key objectives include supporting our country general manager and the overall team, sustaining the growth of the last two years, and continuing to build a talent base and attract new talent. We want to continue to produce the best in the workforce.”

What is the biggest misunderstanding about IBM among South African CFOs? “There is still a perception that IBM is a hardware business. Reinvention is a keyword in the company’s history and, today, IBM is much more than a 'hardware, software, services' company. In fact, IBM is now emerging as a cognitive solutions and cloud platform company." l

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TECHNOLOGY KPMG’s Frank Rizzo talks Pokémon GO and the new tech revolution ahead of his Finance Indaba presentation

Five top tech trends Cloud, mobile, cyber security and data & analytics are considered the most relevant technological trends for finance professionals of the moment. But, argues KPMG’s Frank Rizzo, those trends are so 2016! So buckle up and get ready for the future of finance as he shares the new technological revolution’s five hottest trends.

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I have always had a passion for technology,” says Frank Rizzo, who is in charge of the technology sector and of data & analytics at KPMG across Africa.

Frank is a popular speaker at CFO South Africa’s events, combining ultra-current insights with an easy presentation style that will be on show at the Finance Indaba Africa 2016. We asked him about his love for technology and discussed the five ‘new wave’ technology trends finance teams cannot afford to ignore.

“In my school days I was already messing around with computers,” says Frank, when asked how he ended up as an IT expert. “When the internet just started, I was one of the few people in my environment who saw the possibilities,” explains Frank, who was wise enough to first qualify as a chartered accountant, before specialising.

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Frank is excited about the work KPMG has started doing with startups, an approach borrowed from the UK. “We are part of a technology hub in Braamfontein, Johannesburg with Wits University. It is a place to meet, work and share notes. We have a desk there where people can come with questions and request assistance around registering a business, tax and other practical issues.” He believes the next giants will be future clients “if we build relationships with them now. Often start-ups have great ideas, but no business insights.”

As start-ups and corporate finance teams alike need to stay ahead of the curve, Frank is happy to list the five most exciting trends of the moment:

sonal level, we are moving towards the quantified self, on a business level towards the quantified consumer, which has great ramifications for supply chain and the production process.”

AI & cognitive computing “This is the next level of data & analytics. Think about the things that IBM Watson, Facebook and Google are doing already, or the suggestions that Amazon provides you with of books you should read. The forecast is that this will be a five-billion-dollar industry by 2020. In South Africa a lot of companies are involved in data & analytics, but they are still in the descriptive phase: reporting and visualising. Only a few companies are using the predictive power of cognitive computing, for example

Internet of Things “The prediction from Gartner is that there will be 20.8 billion devices by 2020, whether they are in the car, iPads or mobile phones. All these devices will generate data. On a per-

“Banks don’t want FinTech companies to eat their lunch.”

TECHNOLOGY Discovery, which is using telematics and predictive models to link driving behaviour to determine the likelihood of claims and pay-outs.”

Cryptocurrency “The most relevant example is blockchain, with Bitcoin being the most famous example. It is about info that needs to be trusted, that is stored in the cloud and cannot be messed with. All South African banks are doing proof of concept on Bitcoin.

They don’t want FinTech companies to eat their lunch, but it is also an offensive move as the banks can explore working without their current big in-house systems. A prediction from the end of last year was that large financial institutions would spend $1 billion on blockchain in 24 months.”

Robotics “There are two different stories. The industrial application of robotics is not new. But now we can use AI in robots, like Baxter from Rethink Robotics, and show it what to do at a production line. It can learn, which

is very cool. The cost of one Baxter is just below minimum wage in the US. We are also seeing robotics at a digital level, which can revolutionise customer service as robots can be used in chat boxes and call centres.”

Virtual and augmented reality “We all know this now from Pokémon GO. The most exciting aspect of this for business is augmented reality, whereas virtual reality is very much aimed at gaming and entertainment.

With augmented reality you can walk into your warehouse with special goggles on, linked to your ERP system, and see how old your stock is. Engineers can see which part of a machine is going to break next when they use their goggles.”

“Today, the key challenge is the data deluge, especially when you work with data from outside your own organisation,” says Frank, when asked how CFOs should deal with all these trends. “Executives need to filter what is relevant. When describing the properties of data & analytics, experts talk about the three Vs: volume, veloc-

ity and variety. From the beginning, KPMG has added two other Vs to that: value and veracity. There is also a lot of rubbish data around and you cannot rely just on Twitter feeds. You need to be asking the right questions and be able to test the data and you need people who have the technological background, understand the data cycles, but also understand the business. That is still quite difficult to find.”

Finance departments need to transform to deal with the changes, says Frank. “The CFO needs access to different skills. Younger people who have grown up with a different mindset can gather information from many different sources and analyse data on the fly.” Good external advice is also crucial, with KPMG offering a package that not many can. “Our biggest asset is our multidisciplinary approach,” says Frank. “For a number of clients, we have been able to use data & analytics to look at their tax and find savings, for example.

Tapping into the skills from our different departments is what sets us apart from other big firms.” l

Beware of the cyber threat The prevalence of cyber threats is forcing companies to make tough decisions quickly, otherwise they stand to lose direct control of data security, writes Nathan Desfontaines, KPMG South Africa’s cyber security manager, who is speaking at the Finance Indaba Africa 2016.

“Businesses need to move away from believing that cyber security is a point-in-time exercise – a fad that is ‘hyped up’ - or that the threats of cyber-attacks will go away. When it comes to protecting businesses’ information from potential cyber-attacks, businesses need to understand what their ‘crown jewels’ are. By knowing what the business has and what it is worth – both to the business and to outsiders – only then will the business gain a better understanding of what information needs to be protected. Trying to achieve 100 percent security across all facets of the IT estate is a challenge and is bound to dilute the focus, which should be on the critical information assets of the business.”

“Aside from a possible legislative or regulatory financial impact on a business as a result of a cyber-attack, businesses are becoming increasingly concerned around both the financial and reputational impact to their operations and their environment."

“Although breaches do not always directly affect revenue or stock prices, businesses must also consider other possible effects of a compromise to their information assets. For instance, some attackers are driven by direct financial loss to the business or financial gain to themselves, whereas other attackers are motivated by a reputational agenda and building a name for themselves. Others simply enjoy the thrill of testing their ability without a particular agenda or malice in mind.”

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TECHNOLOGY

Dear CFO Magazine reader, KPMG is delighted to be a Diamond partner at the Finance Indaba

2016. In an age where the role of finance professionals is integral

Africa to the

smooth running of an organisation, KPMG realises the need to remai

n close

to those teams who consider it their daily duty to achieve top finan

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As evidenced by KPMG’s recent global CEO Survey, the business world

idly evolving. Some 1,300 CEOs across all major geographies indica

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sionals would no doubt need to ensure that they are properly struct

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To address this at the Finance Indaba Africa, KPMG is presenting

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finance professionals will find them insightful. There is also a KPMG exhibi tion stand, where we invite you to come by and hear more about the conten t discussed in the presentations.

We are also excited to be hosting a KPMG cocktail function on the

evening of

day one of the Finance Indaba Africa 2016. One of the important princi

at KPMG is to nurture life-long connections with clients and

all our people, both past and present and we look

forward to connecting at this event!

Trevor Hoole (CEO) and John Saker

(Partner Sales & Markets)

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