CFO Magazine 2017 - 4th Issue

MAG AZINE FOR FINANCE PROFESSIONALS IN SOUTH AFRICA 4 • 2017 CFO.CO.ZA

Ebrahim Ally CFO ZAR X You dare not fail Ockert Janse van Rensburg CFO Motus Ain’t no mountain high enough Chris Patricios CFO Primedia Credit where it is due

Curb your cryptofear Everything you were too afraid to ask about bitcoin The man behind the model Finance Indaba sensation Colin Human Sola David-Borha Meet Standard Bank’s Africa CEO

EXECUTIVE JOURNEY Steinhoff’s secret STAR

Nadine Bird CFO Africa

Your cheat sheet for 2018 in 10 Finance Indaba sessions

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TABLE OF CONTENTS Sola David-Borha

Nazrien Kader

In March of 2017, Sola David-Borha moved from Nigeria to Johannesburg to become Standard Bank’s new CEO for all African regions outside of South Africa.

Recently, CFO Magazine sat down with her for an interview and discovered a powerful leader with an incredible presence, a self-assured calmness and a focused passion.

Under Nazrien Kader’s leadership, Deloitte’s Tax & Legal Services have turned into a success story that is realising sustainable, growing profits. “Passion is contagious,” she says. “My team has a unity that I value above everything else.”

32 Nadine Bird

22

“In the period that I have worked here, we have grown from a 20-billion-rand business into a 20-billion-euro business.” Meet Nadine Bird, the 37-year-young reporting guru behind the incredible success of Steinhoff, who was also instrumental in the recent listing of Steinhoff Africa Retail Limited (STAR) and the bold acquisitions of Conforama and Pepkor, which she says have been game changers.”

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CFO South Africa is the organisation for finance exec-

MANAGING DIRECTOR

utives in South Africa. Our goal is to connect finance

Graham Fehrsen

professionals online and off in order to share knowledge,

gfehrsen@cfo.co.za

EDITOR IN CHIEF

Badenhorst, Dirk Pieters,

exchange interests and open up business opportunities.

+27 (0)79 898 0227

Joël Roerig

Jorina Botha

+27 (0)82 570 9482

PHOTOGRAPHY Patrick Furter, Liezel

jroerig@cfo.co.za CFO South Africa

Johannesburg | South

HEAD OF OPERATIONS

CFO Enterprises PTY ltd

Africa

Sarah Chalmers

33 Impala Road |

+27 (0)11 083 7515

schalmers@cfo.co.za

SENIOR EDITORS

Georgina Guedes, Jabulile

Chislehurston | 2196

CFO.co.za

+27 (0)82 570 9482

Toni Muir

Ngwenya, Kate Ferreira,

tmuir@cfo.co.za

Raymond de Villiers,

+27 (0)82 908 8687

Sungula Nkabinde, Tiisetso

OTHER CONTRIBUTORS Dianne Tipping-Woods,

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

MARKETING MANAGER

part of this publication may be reproduced, distributed or

Judith Kamffer

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

jkamffer@cfo.co.za

Ebrahim Moolla

tocopying, recording, or other electronic or mechanical

+27 (0)82 859 1245

emoolla@cfo.co.za

PRINTING

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methods, without the prior written permission of the pub-

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HEAD OF SALES

in critical reviews and certain other noncommercial uses

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DESIGN

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CFO MAGAZINE • CFO.CO.ZA

coenraad.pretorius@novus.

Leadership 18 The solutions man: Sasfin’s Lushen Pather 22 The power of your mindset: Sola David-Borha 26 The executive journey: 10 #findaba17 lessons

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Growth 40 Ain’t no mountain high enough: Motus CFO Ockert Janse van Rensburg 46 Credit where it is due: Primedia’s Chris

40

Patricios 50 Colin Human: the man behind the model

Disruption 54 African FinTech Awards: Easy Equities and ThisIsMe lead the way 59 You dare not fail: Ebrahim Ally, CFO ZAR X 63 Curb your cryptofear 66 Dream big, change your life

Do the right thing 72 Finance and ethics: Nkonki’s Emma Mashilwane at #findaba17 76 Standard Bank dazzles #findaba17 with innovation

And further 7 From the Editor in Chief 8 On the move: new CFO appointments

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11 From the MD: the silence is killing us 13 Finance Indaba Africa 2017 79 Calendar 2018 CFO South Africa CFO MAGAZINE • CFO.CO.ZA

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TALK TO 30,000 FINANCE PROFESSIONALS st your o o b o t y ortunit p p o r u o ience. y d s s u i a m t e t ’ nd be g a r a e t Don g r d u e l o y with e know business our brand, shar ey Showcas your clients! to relevant

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FROM THE EDITOR IN CHIEF

The executive journey

J

ust before this tenth issue of CFO Magazine went to print, Sasfin CFO Lushen Pather WhatsApped to let us know he had resigned and accepted a senior role at the South African Reserve Bank. What to do with the interview (page 18) in which he reflects on his career and his transformational tenure at Sasfin? We decided to leave it untouched, as the conversation contains lots of interesting insights – and who doesn’t want to get to know the new ‘policeman’ of South Africa’s banks?

Lushen’s colourful career has taken him from articles at EY to group finance roles at Macquarie Group, Standard Bank and Sasfin – and this before his 40th birthday. The diversity of finance executives portrayed in this magazine is a reminder that there is not one single way to build an amazing career. What to think of Nadine Bird (37), who, until her promotion to Africa CFO, was Steinhoff’s group financial manager for a full 10 years.

Stagnant? Not so much: in that period the retail giant grew from a 20-billion-rand business into a 20-billion-euro business (page 32).

There is no map or manual to guide finance leaders on their executive journey. No wonder that the panel discussions and conversations with CFOs and business leaders were among the most popular sessions at Finance Indaba Africa 2017. On page 26 we have summarised the highlights of those 10 ‘executive journey’ sessions, while an event report of the entire Indaba can be found on page 13.

This issue also features inspirational CFO interviews with Ockert Janse van Rensburg of Motus (page 40), Chris Patricios of Primedia (page 46) and Ebrahim Ally of ZAR X (page 59). Significantly, there is equal space for two topics that should be high on every leader’s agenda: disruption and governance. Who are the best FinTech companies at the moment? Head to page 54. Are you confused about how bitcoin works? Fast forward to page 63. Do you want to know who has turned Deloitte’s Tax & Legal Services into a big success?

Meet Nazrien Kader on page 68.

Two very different but equally impressive people in the magazine are Goalfix CEO Colin Human and Standard Bank’s African Regions CEO Sola David-Borha. Colin is probably South Africa’s foremost financial modelling expert and his sessions were an incredible success at this year’s Finance Indaba. On page 50 you have the opportunity to get to know the man behind the model.

Sola is a powerful leader with an incredible presence, a self-assured calmness and a focused passion. Her insights (page 22) on the power of the mindset are crucial reading for leaders charting their path on their own executive journey. “Whether it’s your gender, your race, your religion,” she says, referring to challenges that many leadersof-the-future need to overcome, “you must remain focused on how you can improve your skills and your knowledge base, remain professional no matter what circumstances you see, and conduct yourself with integrity.

Invariably the promotions will come.”

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CAREERS New CFOs for Clover, Wescoal and Bowmans

On the move Besides a few noteworthy CFO appointments, there were some interesting promotions to CEO for well-known finance leaders in the last few months.

Globetrotting head of finance Wayne Beifus has left his position at British American Tobacco South Africa after being promoted to head of finance for the West Europe area, based in Paris. Wayne is a South African, who previously was in charge of finance for BAT in the Fiji, Samoa and Tonga region, South Eastern Europe and then Japan, before coming back home for a twoyear-stint in Cape Town.

Bowmans had been looking for a new finance boss after CFO Awards nominee Grant Karolus left the firm last year to become FD at LeapFrog Investments.

D

airy products group Clover has appointed long-serving EY auditor Frantz Scheepers as new CFO, taking over from 2017 CFO Awards nominee Elton Bosch on 1 January 2018. Frantz is no stranger at the Clover headquarters, as he was EY’s lead audit partner on the Clover audit from 2007 to 2013.

During that period the company also listed at the JSE. Law firm Bowmans has appointed the highly experienced Jo-Ann Pohl as CFO. Jo previously worked as CFO at Standard Chartered Bank Africa and Telesure and currently also fulfils the role of chairperson for Africa at Hansal International.

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Former KPMG chairman Ahmed Jaffer, who resigned amidst the Gupta-linked upheaval at the firm, is now the group CFO of Crestar Printers and Publishers, a Centurion-based business run by his children Ikraam and Salahhuddeen. In a public statement following his resignation he also indicated that he was “looking forward to new challenges on various boards and to continue the outreach work I do in my community”.

Wescoal promoted Izak van der Walt to group CFO of the JSElisted mining company from 1 September, after Bothwell Mazarura left to lead the finance team at Kumba Iron Ore. Izak joined Wescoal in August 2015 as group financial director and held the role of acting CFO for nearly

a year. Until September he served as executive director of Wescoal subsidiary Wescoal Mining, and as an executive director of the recently acquired Keaton Energy.

In another promotion, agricultural products and services provider NWK has appointed Pieter Kleingeld as its new CFO, effective 1 November. Pieter joined NWK in 2015 as group manager for asset management and risk services. His professional exposure to internal audit and risk management in the agricultural sector spans 23 years.

He also gained experience in the strategic and operational positioning of IT during his 14-year career at PwC as senior manager.

Two new executives were recently appointed to Broadband Infraco: Ian van Niekerk as CFO and Andrew Matseke as CEO. Andrew took over the CEO role from Puleng Kwele, whose five-year contract ended in May this year.

BP Southern Africa (BPSA) recently appointed CFO Priscillah Mabelane to the role of CEO. She took over from outgoing CEO Daniel Odogwu on 1 September, six years after joining the organisation as CFO. Pricillah is the first black female to head up the organisation. Prior to joining BP, Priscillah held various executive roles in a number of large South African companies, including Airports Company of South Africa (ACSA), where she was

CFO; EY, where she was a tax director; and Eskom, where she held various roles in finance, tax and general management.

Thandi Orleyn, BPSA chairperson, said: “Given her proven track record in her previous executive roles, we are confident that Priscillah will be a strong leader for our business, especially as we continue to explore new areas of growth and development.

Priscillah’s appointment reinforces BPSA’s pioneering role and strength of commitment to cultivating a diverse and inclusive workforce that will breed creativity and ensure we meet, even exceed customer expectations.”

In another CFO-becomes-CEO move, JSE-listed chemical group Rolfes recently announced that its current acting CFO Richard Buttle will soon take over the reins from outgoing CEO Lizette Lynch. Prior to joining Rolfes, Richard was CFO of Metrofile Holdings Limited until the end of

Deon Viljoen relishes new CFO job at Discovery “Invigorating!” That is what CFO of the Year 2015 Deon Viljoen called his first few months as CFO of Discovery, where he started in May this year, following a tough but celebrated ten-

ure as Alexander Forbes CFO. “It has been a lot of fun, it has been busy, it has certainly been no controlled arrival,” said Deon during a CFO Summit in Johannesburg.

a bank under its financial services umbrella. Deon plays a crucial role in that. “It has been brilliant to work with [CEO] Adrian [Gore]. We have a phenomenal team,” he said.

Deon is passionate about the CFO role and has been a member of the panel of judges for the CFO Awards since 2016. He guided Alexander Forbes, the country’s largest retirement fund administrator, through a delisting and a relisting in a period of just seven years.

Deon specifically noted the vast difference between the strategies of Alexander Forbes and Discovery: “Both companies have very valid strategies but they are very different.

Alexander Forbes has focused on trimming down to its core, while Discovery is taking a core competency and expanding it to geographies and sectors, building on its shared-value model.”

One of the biggest tasks that Discovery has set itself is the launch of

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CAREERS

2014 and engaged in numerous private ventures subsequently.

He will retain the role of acting group CFO while a suitable successor is identified.

Sim Tshabalala was recently appointed the sole CEO of Standard Bank, having shared these responsibilities with Ben Kruger until now. The joint leadership structure came about as part of Standard Bank’s management succession plan when it was introduced in March 2013.

Ben will continue as an executive director reporting into Sim, who is the only black person to lead one of South Africa’s biggest banks since Sizwe Nxasana retired as the head of FirstRand in March 2015.

African Bank might also get a black CEO, after it recently announced that its CEO Brian

Riley will be stepping down at the end of March 2018, while maintaining his position as director on the board. While a replacement for Brian had not yet been formally named as this magazine went to print, Basani Maluleke had been publically identified earlier this year as a potential successor. She was appointed onto the executive team on 3 July 2017, although she has been a board member of the African Bank Group since July 2015.

Wim de Klerk, the current CEO of ArcelorMittal South Africa and a former Exxaro finance director, has said he intends to retire in January 2018. He would have been in the role less than 18 months by this time.

KPMG South Africa’s new CEO, Nhlamu Dlomu, recently

announced the firm’s new executive team.

Gary Pickering, a CA and audit partner, will lead the group’s Audit practice, while Sipho Malaba, also a CA, will continue as the executive team member responsible for KPMG’s largest business unit, Financial Services Audit, in addition to leading the firm’s strategic projects.

Granville Smith will lead the Advisory practice; Joubert Botha, currently the Chief Operating Officer for Tax, will serve as interim leader for that part of the business; Modise Maseng will lead the public sector work; and Makgotso Letsitsi will be the leader for KPMG People.

Other noteworthy appointments include two deployments from KPMG International: Andrew Cranston as the interim Chief Operating Office and Brian Stephens as Head of Risk. l

CFO Awards Anoj Singh suspended The organisation of the CFO Awards in South Africa, CFO South Africa, has suspended all awards received by Anoj Singh until further notice. This has happened in close consultation with the current panel of judges.

He was also handed the Governance & Compliance Award in 2014 and the Strategy Execution Award in 2015.

These awards were given to Anoj following an interview and voting process by the panel of judges.

Both the organisation and the panel consider the recent revelations about Anoj’s conduct during his tenure at Transnet (for which he received the awards) and subsequently at Eskom to be damaging to the stature and integrity of the CFO Awards.

The awards can be reinstated if a court judge or official commission of inquiry clears Anoj of all charges. The awards can be permanently revoked if a court judge or official commission of inquiry finds him guilty. This decision is at the discretion of the panel of judges and CFO South Africa.

Anoj received the Public Finance Award (now called Public Sector CFO of the Year) in both 2014 and 2015.

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“Integrity and ethical conduct are crucial assets of good leaders. In

times where both the public and private sector are subject to important scrutiny, CFO Award winners need to be role models and shining lights of excellence,” says Graham Fehrsen, MD of CFO South Africa.

FROM THE MD

The silence is killing us “We need you to change the headline of your article – it’s sensationalist and incorrect”. This SMS request took me by surprise as we’re not in the business of sensationalism or fake news. A follow-up phone call lead to a firm exchange. When the complaining party was offered the opportunity to provide more information or context, we received no response. The story was accurate and the real issue was that the “sensational” headline was causing a PR and reputational headache. The truth can be an uncomfortable bedfellow.

The 2017 South African story is dominated by the “captured” theme, but the real enemy among us is silence. Silence from those who know better, silence from those who are too afraid to speak up and silence from an industry and its leaders, where, for a very long time, decidedly poor corporate behaviour has been quietly ignored.

Only recently has some of this behaviour, exposed by relentless and unapologetic journalism, been corrected or kickstarted a variety of processes designed to right the wrong.

Silence is truly our greatest enemy. Ask the women who suffered at the hands of Harvey Weinstein, ask the good people still working at KPMG or SAP, ask those dedicated members of the South African Police Service committed to reducing crime.

South Africa’s current social ills have

many causes but none, in my opinion, as deep and as destructive as our silence on our past and our ongoing silence around the huge economic inequality of today.

As a professional, each and every one of us has a responsibility to speak up, be honest and hold our ground. Anything else compromises not only your personal integrity, but the values and principles that underpin your profession and your hope for a better society. More importantly, if you are silenced there is a very good chance that others will be too, and before you know it your team, your organisation or your community will be victims of your inaction.

If you’re wondering – we kept the headline. We’ve made no friends but we did the right thing and weren’t silenced. We will continue to say the things others might not want to hear during our events in 2018 and we will continue to write in CFO Magazine and on CFO.co.za about what really matters for a community of exceptional professionals, South African accountants.

Martin Luther King Jr’s words best convey why your voice is important: “In the end, we will remember not the words of our enemies, but the silence of our friends”.

Raise your voice, confront the truth and help make South Africa a better place for the next generation.

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“

Relevant, thought provoking and inspiring.

Wow , what an awesome experience.

The Finance Indaba is a fantastic opportunity to hear from high quality presenters on their experiences and insights.

Don’t miss out on Finance Indaba Africa 3 & 4 October 2018 at the Sandton Convention Centre

Finance Indaba Africa is the biggest finance conference in Africa. More than 5,000 visitors tap into a wealth of resources, know-how and inspiration.

With more than 120 sessions hosted by expert speakers and rockstar disruptors like Vusi Thembekwayo, this is the one annual event that finance professionals can’t afford to miss.

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

FINANCE INDABA REPORT

A resounding success, Finance Indaba Africa 2017 makes attendees and exhibitors hungry for more

Unparalleled learning and networking The unparalleled value of the learning and networking at this year’s Finance Indaba Africa was mind-blowing, with exhibitors, sponsors and thousands of attendees all vowing to be back for more in 2018.

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FINANCE INDABA REPORT

O

n 12 and 13 October, nearly 4,000 finance professionals and accountants attended the Finance Indaba Africa, soaking in knowledge and inspiration during packed presentations of world-class speakers, getting up to speed with the latest and greatest tools and services for finance, catching up with colleagues and making new friends across industries.

Powered by the inspirational theme ‘Build a better future’, diamond partner Standard Bank stole the show with a range of incisive presentations, putting their money where their heart is through the launch and growth of two “public good” programmes: the Standard Bank Incubator, and Feenix, a crowd-funding initiatives to help people pay university fees. The bank also

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lifted the veil on what is internally dubbed ‘The offering’, an innovative banking solution co-created with accountants and entrepreneurs.

days. “The entertainment was out of this world, the presenters were of very high calibre and the energy from everyone electric.

Can’t wait for 2018!”

The 70 exhibitors, the sponsors, the presentations, the FinTech Arena and the entertainment made a lasting impression on the attendees, as evidenced by the deluge of registrations that the organisation of the event has already received for the next edition on 3 and 4 October 2018.

“Finance Indaba understands that finance is more than just numbers,” commented attendee Cheryl Howell, finance manager at the CSIR. “It’s about connecting people, ideas and information to add value and improve the numbers. Thanks for a great event!” Unathi Mlisa, management accountant at MTN Group, also lauded the value of the two

Take on the world Financial accounting director Charlotte Makaringe, who works at the public works department of Limpopo province, called the event inspirational. “I will never miss it. I attended last year and always come back ready to take on the world.” Shaun Carter, part-time FD at CFS Recruitment ‘complained’ about “information overload”, but called the event “a great one-stop-shop to find service providers in the industry”.

V-Switch director Hannes Venter echoed that sentiment: “I met a lot of people and was introduced to new solutions and services that will be for our business growth in future.”

As thousands of people made their way through the doors of the Sandton Convention Centre for the much-anticipated twoday event, one of the world’s foremost experts on employee culture – the American Stan Slap – took the stage to open the event. If you can’t sell something to your own employees, you can’t sell it to potential customers, he told the gathered executives, managers and ‘managed’.

“While making profits, delivering on big projects, and improving the share prices of a company are all good things, leaving a legacy impact on the lives of the human beings that helped you to do that is a GREAT thing,” said the California-based expert at the end of his talk, which was made possible by the fast-growing South African business, ClarkHouse Human Capital. “For

yourself, for your family, for your employees, for your clients, for your company, and for the world, you should be a HUMAN first and a manager second.”

South Africans are interested in transformation, it has to be done properly. Real transformation is not the look of it, it is substance over form, he said.

Exceeding expectations

Vusi shared his dream of seeing a future where his daughter who loves ballet doesn’t have to worry about her race and gender, so that she can realise her full potential. He invited South Africans to desist from being individualistic and being merely concerned about their nuclear family. People need to look beyond their immediate and think about the children in Diepsloot, as well and how they can change their lives.

“Transformation is not about colour,” he said. “It’s about how we make this country a better place for everyone.” Martijn echoed Vusi’s sentiments that entrepreneurship should be placed

Maverick investor and global speaker Vusi Thembekwayo, and futurist and stand up philosopher Martijn Aslander, were back due to popular demand after their stellar contributions in 2016, both exceeding expectations once again and providing revitalising perspectives on the current situation in South Africa and the road ahead.

“Transformation is about stopping those who keep people poor and making sure they stop doing it,” said Vusi, tackling a tricky but important topic in front of a massive crowd brimming with positive energy. The trailblazer told finance enthusiasts that if

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FINANCE INDABA REPORT

at the forefront of change. Having never had a boss in his life, Martjin spoke about how stifling a nine-tofive job can be, saying that you only learn something at work within the first three months, that it is a waste of time. “In the first three months of your job you learn the most, but after that it goes down, so actually you should get a new job every three months,” said Martjin. He urged people to become entrepreneurs because that is what will define the way we live in the future.

The Dutch standup philosopher also implored people to read books – and not just about business. “If you are just in business for business you will be out of business,” he said. “I want to focus on this because most people don’t focus on how to learn faster,” the highly regarded co-author of the bestseller, ‘Permanent Beta’ told a room packed with finance professionals. “You have to learn as fast as you can without being in

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a hurry; it’s really about learning how to learn.”

Executive journeys With leading professional accounting bodies like SAIPA, CIMA and ACCA all providing important insight into their vision for the future, Finance Indaba attendees realised once again that the annual event in October simply cannot be skipped. Among the most popular sessions in 2017 were the in-depth panel discussions with top CFOs. Under the title ‘Executive journeys’, finance leaders like Christine Ramon (AngloGold Ashanti), Nishlan Samujh (Investec), and Wayne Koonin (Omnia) provided what turned out to be mass group mentoring sessions for the gathered finance professionals.

Business and governance icons like South Africa’s first female CA(SA) Nonkululeko Gobodo, Auditor-General Kimi Makwetu

and Transunion CEO Lee Naik were among the most popular speakers during the 2017 event, while the Finance Indaba also provided somewhat of a breakthrough for Goalfix CEO and course director Colin Human. His two presentations on financial modelling were both so well attended that many people had to stand – some as far as in the hallway.

“Wow,” said Dr Tim London, Senior Lecturer at the Graduate School of Business of the University of Cape Town, after the event.

Tim himself delivered one of the most thought-provoking contributions, discussing how to avoid “becoming the next KPMG” in a presentation titled ‘accountability in times of Gupta-leaks’. “First time at Finance Indaba and I have to go back next year,” he said.

“Great speakers, really smart and passionate attendees, and the whole thing was run exceptionally well.” l

2018 registration now open Finance Indaba Africa 2018 is going to be bigger and better. The event is expected to smash records in terms of numbers of attendees, exhibitors, international speakers and business opportunities.

On 3 and 4 October 2018, over 5,000 finance professionals will gather to learn, share knowledge and network. Many of this year’s exhibitors have already renewed their commitments and other companies – who realise they have missed out in 2017 – will be joining the exhibition.

3 & 4 October 2018

Register today on Finance-indaba.co.za (invitation code FIA2018)

Sandton Convention Centre

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LEADERSHIP

Sasfin’s Lushen Pather talks about diplomacy, acquisitions and building a strong team

The solutions man Sasfin’s finance boss Lushen Pather thrives on challenges, whether it is building better relationships with regulators, changing an unhappy team into winners or getting stuck into transformational acquisitions. By Ebrahim Moolla

“

A CFO of a growing business must find solutions to solve complex problems within the risk, compliance, regulatory and accounting frameworks – or else you will never grow,” says Lushendren Pather, Sasfin’s chief financial officer, who was acting group FD and was slated to take over the reins from his long-serving predecessor Tyrone Soondarjee at the JSE-listed financial services group founded in Johannesburg in 1951.

Lushen was nominated for the 2017 CFO Awards and lists moulding a younger high-performance finance team among his biggest achievements, along with some landmark acquisitions and building a good relationship with the South African Reserve Bank.

“How we manage the risk, grow our business and bring in and

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retain the people are major challenges,” he says. “My view is that the CFO must be the wingman to the CEO and the business. Too often in a highly regulated industry, we just hear 'no' from finance executives.”

One thing is clear: Lushen is a solutions man who didn’t take the well-trodden road of elite universities and well-established social networks to the C-suite, like many of his peers. Born into a humble home in Shallcross, Durban, he didn't even set foot in a bank branch during his childhood, let alone dream that he would one day be managing the financial destiny of an entire banking group.

Attitude While at school, Lushen stumbled upon his aptitude for accounting. After matriculating,

he had to take on a job as a filing clerk at NBS Bank to pay for his studies towards becoming a chartered accountant, which he did part-time through Unisa and the University of KwaZulu-Natal.

“I was never the smartest guy in school and didn’t pass my CTA or Board exams the first time around. But I love my job and am enthusiastic about coming to work everyday. It is more about attitude than aptitude,” says Lushen, who values hard work over many other things and exudes an ironclad determination.

In July, Lushen took up the cudgels as group FD from the Cell C-bound Tyrone Soondarjee, a man with whom he enjoyed a close working relationship. He will continue in an acting capacity of the group and is financial

BREAKING NEWS: A few days before this magazine went to print, Lushen Pather announced his resignation from Sasfin. He has been appointed as Divisional Head: Bank Supervision at the South African Reserve Bank (SARB), starting on 1 January 2018. “It is an opportunity I could not turn down,” says Lushen, who built a strong relationship with the SARB during his tenure at Sasfin. “There were no push factors at Sasfin and I left on excellent terms. As a CFO I feel I can gain invaluable experience by working on the side of the SARB, an internationally respected regulator. I will also be exposed to banking regulation on a global level, which is very exciting.”

director designate of Sasfin Bank Limited, subject to regulatory approval. He says he is enjoying the extended strategic ambit of the role.

Restructure Sasfin is in the process of completing a restructure that will see its banking, capital and wealth businesses operate independently and with their own dedicated management teams.

The group is already realising the benefits of increased efficiency and focus, according to Lushen. Sasfin has recently also

concluded a B-BBEE deal with Women Investment Portfolio Holdings Limited that sees the empowerment group subscribing for 25.1 percent of Sasfin’s issued share capital for a total consideration of R413 million.

Apart from these initiatives, the industrious former head of group financial planning and budgeting at Standard Bank has been instrumental in overseeing the group’s acquisitions, which play a pivotal part in the future direction of the company.

“Sasfin acquired Fintech (Pty) Ltd a year and a half ago,” Lushen explains. “The assets of the equipment finance company were approximately R1 billion and added R30 million to the bank’s profitability, so it was significant. The deal called for due diligence and South African Reserve Bank approval. There was a huge team and different systems to take on and it used up quite a bit of executive bandwidth. Finance was integral in concluding the transaction and bedding it down post acquisition. The group is now looking to acquire another equipment finance book of approximately R1.5 billion – that of Absa Technology Finance Solutions.”

Strong people An amiable man with a laid-back demeanour, Lushen took on the role of diplomat when seeking to CFO MAGAZINE • CFO.CO.ZA

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“ My recruitment drive intentionally targeted younger people, who can adapt and deal with tech changes more easily. Now I would go to war with my team.”

build a strong relationship with the South African Reserve Bank, but he isn’t one to shy away from tough decisions. On arriving at Sasfin, he was not satisfied with the output of his finance team and was compelled to make changes. Where others may have chosen to be conservative soon after joining an organisation, Lushen looked to youth to transform his department, and a facilitative leadership style that is the hallmark of his people-centric management approach. Together with his young team, they effected significant enhancements to the group’s financial, capital, liquidity and regulatory reporting.

“I try to send out the right message by hiring strong people – experts in their fields – and trusting their expertise, taking them into my confidence, asking them what the best way to

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achieve the desired outcome is. I feel that people and stakeholder management is a bigger part of my role than my pure technical expertise and the real benefit that I bring to Sasfin.”

This mindset should stand Lushen in good stead as he looks to lead Sasfin Bank and the group through precarious economic and political times. He says that Sasfin continues to prioritise achieving critical mass to drive strong revenue generation across all its businesses, combined with cost containment where possible, together with stra-

tegic investment in technology and distribution.

The big difference, Lushen is seeing, is that his formerly unhappy team now operates as a high-performing unit. “When I joined, I received negative feedback in the climate survey and after initially being upset about negative feedback, I realised I had to fix this problem and could not find excuses. My recruitment drive intentionally targeted younger people, who can adapt and deal with tech changes more easily. Now I would go to war with my team.” l

Book your seat for the 2018 CFO Awards today

Meet 350 CFOs, share knowledge and boost your business 10 May 2018 | Johannesburg | CFOAwards.co.za

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

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

LEADERSHIP

An introduction to Standard Bank’s new African Regions boss, Sola David-Borha

THE POWER OF YOUR MINDSET In March of 2017, Sola David-Borha moved from Nigeria to Johannesburg to become Standard Bank’s new CEO for all African regions outside of South Africa. Recently, CFO Magazine sat down with her for an interview and discovered a powerful leader with an incredible presence, a self-assured calmness and a focused passion. By Toni Muir

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“

When I first started my career, I used to hate cocktail parties,” says Sola David-Borha, Standard Bank’s CEO for Africa Regions, basically its business outside South Africa. “Then one day I realised, this isn’t a niceto-do, it’s a must-do, it’s work.

Once I changed my thinking, I loved cocktail parties, because they’re quite efficient. You can meet many people in a short space of time.”

“Changing your perspective on things is very important.”

An award-winning business woman and long-serving stalwart of the financial services industry in West Africa, Sola is a powerful personality who talks with a self-assured calmness and focused passion about her work and clearly enjoys her chosen field. Her little anecdote about cocktail parties serves to illustrate something bigger. “Once you change your mindset about something, for example, your ability to take on a new challenge or move to another country, it changes the way you look at it.

What might have seemed difficult to do becomes quite simple.

Changing your perspective on things is very important.”

Sola moved to Johannesburg in early 2017, when she was appointed as Standard Bank’s Africa boss. She says her daily job includes a focus on governance, risk and conduct issues, as well as enabling business by ensuring that there is plenty of growth and an ever-improving client experience. In fact, interacting with clients is one of her favourite aspects of the role, she says, along with understanding the impacts of different factors on the economy.

Asked whether she has encountered any adversity being a smart and successful woman in business, Sola says every career has its challenges. “The important thing is not allowing those challenges to distract you,” she says, once again referring to the power of your mindset. “Whether it’s your gender, your race or your religion, you must remain focused on how you can improve your skills and your knowledge base, remain professional no matter what circumstances you see, and conduct yourself with integrity. Invariably the promotions will come.”

Night and day As a modern professional, staying current and ahead of the curve

is the route to success, says Sola, indicating that the business world is different “like night and day” to the one in which she began her career in 1984. “First of all, we now live in a digitised world, so the importance of IT as an enabler is critical. With this come numerous and varied risks, such as cybersecurity, which wasn’t an issue 20 or 30 years ago.” There is also increased regulatory intervention, she says, on the back of the 2008 crisis. “So, the cost of running a business and ensuring compliance with all regulatory regimes has gone up. There’s also regulatory pressure on margins. It’s a much more challenging environment to work in.”

Sola took up the Africa Regions role in March this year, moving across from Stanbic IBTC, where she was the chief executive in Nigeria. She believes the opportunities on the African continent are plentiful, saying that “Africa grows despite all the challenges we see”. In her opinion, Kenya, Mozambique, Nigeria, Uganda, and Angola have the greatest potential, but to realise this, it is important to have the right risk appetite and to participate in the growth sectors of each of the economies, she says.

Sola says her time in this role, which she notes is more strategic than her previous one, has thus

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“I always tell my children that travel is education.

We also like to hang about the house. My absolute favourite place is tucked up in my bed.”

far been interesting and exciting.

“I’ve been getting to understand the countries better, meeting the teams and regulators, and getting a better insight into the opportunities and challenges in each of those countries. We’ve also been focused on country alignment sessions, where the country teams have come to Johannesburg to present strategies and explain how they intend to execute on those.

The focus has been on ensuring there is alignment between those country strategies and the group strategy,” she says.

many thick books,” she laughs.

“Economics was real.” She graduated with a BSc in Economics, going on to pursue an MBA from the Manchester Business School. Her executive education includes the Advanced Management Program at Harvard Business School and the Global CEO Program jointly offered by Wharton (US), IESE (Spain) and CEIBS (Shanghai). She says that finance was a natural detour from economics, likewise banking from finance.

Although she is Nigerian, Sola was born in Accra, Ghana. Her father was a diplomat, which meant the family travelled a lot, and Sola recalls living the first decade of her life in various countries, mostly across Europe and Africa. They returned to Nigeria when she was about 10 years old. Sola undertook her primary and secondary schooling here, before completing her studies at the University of Ibadan, located on the outskirts of Lagos.

Sola began her career at NAL merchant bank, which was affiliated with American Express, before joining a boutique investment banking firm, IBTC, which in 2005 merged with two commercial banks to become IBTC Chartered. In 2007, Standard Bank Group acquired IBTC Chartered, where Sola served as Deputy Chief Executive of the Bank and Head of IB Coverage Africa (excluding SA), becoming CE of Stanbic IBTC Bank in 2011 and CE of Stanbic IBTC Holdings plc in 2012.

She recalls being fascinated by finance from early on. “I was introduced to economics in Class 4 and I fell in love with the subject. It was an escape from history, which had too

Her job also requires a lot of travel, which she says is a highlight. “Visiting the countries and meeting the teams on the ground, and understanding their challenges and seeing how I can

Executive education

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support them, is what drives me,” she says. There are 19 countries in the African region, spread across western, eastern, southern and central Africa, and while Sola has been to more than half, she’s not yet done. “I’m still counting,” she laughs, adding that she will be travelling to three African countries before November is out.

Purposeful Sola considers the appointment into her current role as her greatest professional achievement. Asked if she is ambitious, she considers before answering: “I’m not sure the right word is ambitious. Purposeful, I would say I’m purposeful. For me, the important thing is to contribute and add value to growing a franchise, to a business and to delivering on a strategy”

“Standard Bank is a place where talents are recognised, encouraged and developed.”

In 2016, the All Africa Business Leaders Awards named Sola Business Woman of the Year for the West Africa region. She says

she was surprised at the accolade, especially as she went on to be named Business Woman of the Year for Africa, too. She is humble, attributing her success to Standard Bank. “Standard Bank is a place where talents are recognised, encouraged and developed, and where you have an opportunity to work across regions, products and sectors, which really does stretch you and makes you more prepared than many of your peers,” she says.

Sola’s sage advice to young and ambitious finance professionals is to be committed. “Every employer wants people who are committed,” she says. Hard work and conduct are also important, she says, as is sharing the company’s vision. “You’ve got to conduct yourself in a way that is above board, even if this is to your own cost. And you’ve got to align yourself strategically to the direction in which the organisation wants to go. This doesn’t mean you can’t think for yourself or challenge people or ideas, but fundamentally you’ve got to align yourself.

I remember somebody once saying, you can’t belong to a club you don’t want to join.”

Work, family and faith If she had to give her younger self any advice, Sola says it

would be to stay focused. “You can’t control all the variables, so don’t worry about the things you can’t control,” she says. “But the variables that you can control, and your own behaviour, stay focused on those. The others will sort themselves out.”

With what can only be an incredibly busy work schedule, how does she find time for anything or anyone else? “I always tell myself that my life is divided into three compartments,” Sola says.

“There’s work, my family and my faith.” The mother of three children – a grown-up step-son, a 12-year-old son and a 10-yearold daughter, Sola believes that a work-life balance is something you only achieve at times.

“Allowing yourself to be there for the quality moments, birthdays and important school and life events,” she says. “It’s always a challenge. You always feel guilty.”

She loves swimming and playing golf, though she doesn’t often get to tee off, and enjoys reading – particularly current affairs.

Time spent with her family often involves travelling. “I always tell my children that travel is education. We also like to hang about the house. My absolute favourite place is tucked up in my bed,” she says with a laugh. l

Learn from Sola: what makes a great leader “Good leaders have a vision, inspire others and set the example. Their conduct has to be above board, always, and they need to hold themselves to the highest standards. A good leader is connected and not removed from what’s going on in the real world. To be a good leader, you need to talk to people you normally wouldn’t encounter in your daily life. This is how you make better decisions.”

“The difference between a good leader and a great one is empathy.

Great leaders can understand how the other side is feeling or thinking.

You can make better-quality decisions if you have a good understanding of what the other person might be feeling, and understand where they are coming from.

Empathy is something you’ve got to develop. You’ve got to make an effort with it. It’s about controlling yourself and telling yourself that to make a better-quality decision, you need to have a different point of view.”

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LEADERSHIP Your cheat sheet for 2018 in 10 Finance Indaba Africa sessions

The executive journey One of the absolute highlights of Finance Indaba Africa 2017 was ‘The Executive Journey’, a non-stop world class seminar of two days and 10 sessions, hosted and moderated with poise by Didi Sehume of CHRO South Africa. Discussion panels consisted of prominent business leaders and finance executives, many of them former nominees or winners of CFO Awards.

T

he packed room of finance professionals and accountants created an electric atmosphere, paving the way for unsurpassed learning and inspiration and laying the platform to build a better future for the attendees, their companies and the country.

For this magazine, we summarised the sessions, creating a practical cheat sheet for all your CFO discussions in 2018.

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1

International experience - my most valuable lessons Peter Walsh (CFO Servest) and Zaf Mahomed (CFO McDonald’s SA) ​ “When you work in a multinational you’re up against some seriously smart people,” said Zaf. Peter concurred, saying: “We are up against forthright, opinionated individuals but we’ve got to be confident in our own abilities and stand our ground. Just because we’re a developing country doesn’t mean we’re a poorer cousin.”

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Building a successful career in the public sector - what they won’t tell you in an interview Kimi Makwetu (Auditor-General of South Africa) and Nicola Dewar (CFO South African Post Office)

Building credibility with your international counterparts is about meeting deadlines, being accurate and managing expectations. Zaf added that, although people can be opinionated, they can also be culturally sensitive, which South Africans are not always aware of.

Corruption, slow turnaround times and lack of ethics are considered part and parcel of a career in the public sector, but if you stick it out, the personal rewards are worth it, say those who work in government. “It’s a roller-coaster,” said Nichola.

Reporting standards, which in the country are high, are an example of such a fact. As Servest South Africa currently facilitates its company audit and consolidates its accounts, it is also working with its UK counterparts to follow suit and adopt similarly. “The strictness with which we follow our audit is world class and the UK needs to follow suit,” Peter said.

Auditor-General Kimi Makwetu’s philosophy is to roll with the punches. While the job of the AG's office is to ensure checks and balances, Kimi says there will, unfortunately, be corruption.

You are generally dealing with two types of people: those who don’t understand and those who think they understand and play along. “It becomes hectic to work in an environment like that.”

Speaking of her own transfer from the private sector, Nichola remarked that initially working in the public sector was challenging simply because of how slowly it can take to get things done.

“But once you understand the system, you can work out how you can get things done faster and work better in the system and make changes.”

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No glass ceiling - Success my way Nonkululeko Gobodo (CEO Nkululeko Leadership Consulting), Mary Vilakazi (Deputy CEO MMI Holdings) and Debbie Ransby (FD Takeda Africa)​ Nonkuleko, the first black female to qualify as a chartered accountant in South Africa, firmly believes there is no glass ceiling.

“I was never raised to think about a glass ceiling. I grew up with lots of inspiration and affirmation and hardworking people to inspire me.”

Mary credits her family for being the anchor in her career success.

The strong women, she says, especially her mother, instilled in her the importance of hard work.

“But there is a glass ceiling,” Mary remarked emphatically to the packed room. “It is for us to smash. We’re making progress.”

Just like Nonkululeko and Mary, Debbie is confident and willing to get her hands dirty. The winner of the Moving into Africa Award at this year’s CFO Awards strongly believes people create their own opportunities by putting their hand up for any task.

For those who do that, there is no glass ceiling, she said.

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Building exceptional teams - what I’ve learned Bernardt van der Linde (FD Curro Holdings) and Lushen Pather (FD Sasfin)​ Building a culture of trust is an integral part of team building and ensuring that you have a thriving work environment, conference attendees were told.

How do managers build a culture of trust in the workplace?

Lushen firmly believes the only way to do this effectively is for managers to be honest and true to themselves. “You’re not going to build trust by buying people pizza because, after a while, your staff will pick up that you just bought them pizza because you want something from them,” he explained.

Bernardt said that managers must be more understanding and honest, highlighting that employees are dependent on them as team leaders, and they must be cognisant of the fact that people aren’t perfect and will make mistakes. “When your employees have done something wrong, when you broach the subject, always remember that you’re talking to a human being on the other side. Be honest but gentle, and always tell people that it’s not personal.”

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Work-life integration - what I know about balance Paul Marten (FD Microsoft SA) and Zaf Mahomed (CFO McDonald’s SA) According to Zaf, work-life balance is about setting boundaries on your time and communicating this to your colleagues and team leaders. For him, having breakfast and dinner with his family is non-negotiable. “My team doesn’t really fuss about that, because I give them the same freedom that I have. They can work whenever they want to, as long as the work gets done. In a finance team, it’s pretty easy to know when someone is slacking.”

For Paul, a former CFO Awards nominee, the most critical element in achieving a work-life balance is trust. He said: “The way I approach it, is that I have conversations with every member of my team and understand their priorities personally and merge those priorities into the workplace. I think you have to have those conversations regularly. I have them weekly, sometimes biweekly, where we check in on this topic. I ask them, ‘how’s your work-life integration? Is it working or not? If not, what can we do?’...That’s how you start to build the trust. And, in those discussions, you have to leave the authority at the door, because it’s about having a human-to-human interaction.”

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Staying the course what it really takes to succeed Christine Ramon (CFO Anglogold Ashanti) and Nishlan Samujh (CFO Investec) Five years is the minimum you should stay with a company and you shouldn’t focus too much on what you’re earning in your first job, argued the panelists.

Christine believes that employees need to stay at organisations for longer than three years to add value and grow personally. “Three years is too short. It takes time to progress in an organisation, not rushing to the next level, consolidating your experience, and being able to apply your knowledge in that organisation to be able to add value. I think you need to be in an organisation for at least five years to consolidate your experience and add value.”

“Culture is an important part of it,” said Nishlan, winner of the Compliance & Governance Award at this year’s CFO Awards.

“Knowing the culture and the strategy and where you fit into it is important. It may seem boring at the end of the day, but from an execution perspective, where you are and how you show up is fundamental to how you are seen in the organisation – how you grow and how you propel yourself to the next level.”

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Why being a techsavvy accountant is non-negotiable Wayne Koonin (FD Omnia) and Christine Ramon (CFO AngloGold Ashanti)​ It is vitally important for today’s CFO to be tech-savvy, agreed Christine and Wayne, last year’s and this year’s winners of the Finance & Technology Award at the annual CFO Awards.

Christine pointed out that it is essential to choose the right uses of technology at the right time.

“We have 60,000 reports generated across our business. The next area of focus is optimising these reports, and focusing on generating the relevant reports timeously, so you can focus the business on ultimately generating value,” she said.

Wayne agreed that people’s ability to focus on long reports is becoming “challenging”. He said: “Boards in general, excos in general, management teams in general – if you can simplify the message, it’s very helpful.

You have to be sensitive about info dumping. Do you use this report and what for? We’re going through a huge ERP change and people say they need reports but when you challenge them, it turns out they don’t really need them. In a pressurised environment, be very selective and quite ruthless in terms of stopping the runaway train.”

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Breaking into the C-suite - key insights Mohammed AbdoolSamad (CFO Illovo) and Ramasela Ganda (CFO Barloworld Equipment)​ The road to the C-Suite might not be a straight line or predictable, but for the panelists it was a path walked with clear intention, as they discussed extensively during this session.

Ramasela was recognised as Public Sector CFO of the Year at the 2017 CFO Awards, because of her successful tenure at Ekurhuleni Metropolitan Municipality. She revealed that a personal diary or private space for journaling and contemplation is useful for her. She uses this to plot a strategy and vision, and to check in with herself without the fear or self-censorship of a public record-type document.

Mohammed spoke highly of the benefits of networking to build relationships and to become known within your own organisation and industry. “You need to be known in the business. Not notorious,” he cautioned. “When opportunities arise, you shouldn’t have to put your CV in. They should be calling you.”

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The entrepreneurial spirit - lessons from the CFO Evan Tsatsarolakis (FD Taste Holdings) and Ryan McDougall (CFO MyBucks) In this session, the panelists detailed how the CFO can work to support and balance the creative impulses of entrepreneurial CEOs who they said tend to place people and business above issues like governance and process. Not only that, but Ryan and Evan believe that entrepreneurs actively seek this “counter-balance” from their hires.

“The CEO that I work for says the best thing you can do is hire people who are good at the things that you aren’t,” explained Evan.

In this way, the CFO and CEO work together to define a company’s values and culture, but not take unnecessary business risks by ignoring process and governance. Although the people-before-processes thinking is critical to culture, it can’t be left to overpower good governance.

“You do need to stick to your guns,” warned Ryan, “because it’s your reputation on the line, as well as the company’s and the entrepreneur’s”.

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Building a successful career in the public sector - What they won’t tell you in

an interview Rajesh Mahabeer (Garuda Capital) and Ramasela Ganda (CFO Barloworld Equipment).

“Everything that you do is tangible and real, especially in local government,” said Ramasela, who excelled as CFO of Ekurhuleni and was crowned Public Sector CFO of the Year in 2017. “The changes that we make are meaningful. There is a need for us to go and serve. Someone in an informal settlement does not have access to healthcare, for example. We need an engineer to build a road, and we need a strong CFO to hold that engineer to account.” Ramasela told the audience that they were “better off dying for the truth than standing for the things that are bringing this country down”.

“I believe the public service is the backbone of any country,” said Rajesh, a former CFO Awards nominee who previously worked as CFO for the Auditor-General and South African National Parks. “It can give finance professionals a chance to grow and gain important experience. Rajesh argued that finance professionals in the public service have an even larger duty to demonstrate their integrity. “It only needs a few of us to start to think differently,” he said, “and before you know it there is a mindshift. The more people say no, the more difficult it will become to do wrong.”

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An interview with Africa CFO Nadine Bird

Steinhoff’s secret STAR “In the period that I have worked here, we have grown from a 20-billion-rand business into a 20-billion-euro business.”

Meet Nadine Bird, the 37-year-young reporting guru behind the incredible success of Steinhoff, who was also instrumental in the recent listing of Steinhoff Africa Retail Limited (STAR) and the bold acquisitions of Conforama and Pepkor, which she says "have been game changers.” By Joël Roerig

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“M

aybe you shouldn’t write that,” says Nadine Bird, a split second after she called generating Steinhoff’s financials “just putting a few things together”. With revenue exceeding R300 billion, more than 12,000 retail outlets in 30 countries, 130,000 employees and an extensive property portfolio, nobody will believe that the work of the group’s 37-yearyoung reporting guru is simple.

But Nadine’s slip-of-the-tongue reveals the no-nonsense, coolheaded approach that has made Steinhoff world-beaters.

When we spoke to Nadine, the team had just finished a massive project: listing Steinhoff Africa Retail Limited (STAR) on the JSE. “For the first time in a long, long time we didn’t work in the weekend,” she says with a smile. The listing of STAR could be transformational for Steinhoff and Nadine’s own career. “When you stand there in the foyer of the JSE and you see the STAR share starting to trade... It was quite an exciting morning.”

For 10 years, Nadine was the group financial manager of Steinhoff, reporting to group CFO

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Ben la Grange. Last year, she was promoted to become the company’s CFO for Africa, which generates 26 percent of the revenue. “At Steinhoff, a title means very little,” Steinhoff’s secret STAR says with a smile. In the period that I have worked here, we have grown from a 20-billion-rand business into a 20-billion-euro business. The work is forever changing and I keep getting new responsibilities.

Even now as CFO Africa, I am still responsible for group reporting.”

In typical Steinhoff fashion, Nadine comes across fairly casual. But behind this lies one of the most purposeful and hard-working finance leaders in the industry. The separate listing of the company’s African

“The proof will be in the pudding, but we believe some investors prefer the direct exposure to either developed or developing markets.”

retail chains has been compared by analysts to the successful creation of mining company Sibanye Gold out of Goldfields. The private shares placement was widely welcomed, as Steinhoff’s business case made sense and the shares were correctly priced, according to analysts.

Happy investors “I mostly dealt with the JSE and the auditors, getting all our regulatory requirements in order. We had to go through various ruling requests, as the listing included the changing of year ends and an extensive internal restructure. We also hadn’t owned all of the businesses for three years at the time of listing, which made it more complicated from the accounting side,” Nadine explains.

The listing team worked long nights to produce a listing document that was both regulatory compliant and offered a credible investment story for investors keen to back big brands like PEP, Ackermans, Shoe City, Incredible Connection, Poco, Buco and Rochester. “It turned out to be 280 pages, which some people say is too long, but we had to ensure regulatory compliance,” says Nadine, making the process sound far simpler that it proba-

The STAR listing team: Ian Nel, Corné van der Schyff, Philip Robinson, Lieza van der Walt, Nadine Bird, Ivan Roux (all Steinhoff International), Riaan van Heerden and Henning de Kock (both PSG Capital).

bly was. “The regulators can be quite strict, for good reasons. We are very proud that we managed to produce a document including some pro forma and forecast numbers that provide very useful information.”

With the listing of STAR, investors who “love the Africa story” have an opportunity to back their passion with money. At the same time, developed markets investors who don’t understand Africa no longer have to discount Steinhoff’s international share price. “My personal observation is that some investors have sold out of Steinhoff into STAR after the September listing, which is what we anticipated,” says Nadine.

“The proof will be in the pudding, but we believe some investors prefer the direct exposure to either developed or developing markets. We’re already receiv-

ing fewer calls from international investors who have read something negative in the newspaper about Africa.”

Game changers The STAR listing hasn’t been the only mega project that Nadine has been involved in, with the company expanding into the US and gobbling up big fish elsewhere. “Over the last decade, Steinhoff has made a number of sizeable acquisitions, including Conforama and Pepkor,” says Nadine, who was responsible for IFRS reporting during the first deal and heavily involved in planning, structuring, implementing and reorganising during the second one.

“With those acquisitions, the press was worried that we bit off more than we could chew.

But they have been game chang-

ers for Steinhoff,” she says, when asked about her biggest achievement. “Returns from Pepkor have been phenomenal, while some analysts felt that we had overpaid at the time. And to add to that, to be part of a business that grew market share during the recessions has been another proud point.”

There is a certain magic to Steinhoff’s acquisition strategy that has paid off handsomely over the last few years. Nadine says it is Steinhoff’s DNA that makes the difference, focusing on synergies without centralising.

“Steinhoff invests in companies with excellent management teams who benefit from funding Steinhoff has access to, which allows for quicker expansion. An example is our Eastern European business, where we are seeing double-digit growth while grow-

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ing the number of shops from 600 to 1,000. They submitted a five-year growth plan as part of their due diligence and managed to accomplish the entire plan in two years.”

recently put on a second hat as CEO of STAR, with former Pepkor CFO Riaan Hanekom now the CFO of the new business.

Coming home “I fell in love with Steinhoff when I was assigned to the company’s audit, first as an article clerk and later as an audit manager,” says Nadine, who did articles at Deloitte in Pretoria. “Since I was three years old, my uncle was my hero,” she recalls. “He was a CA and I wanted to be a CA. He was younger than my mom and was more like an older brother to me. I wanted to be like him, maybe because he was a bit mischievous.”

Instead of sticking around at Deloitte or joining Steinhoff, Nadine accepted a job at Nampak. “There, I was forced to learn to excel outside of an environment where I was known,” she says, adding that her move to Steinhoff two years later felt like coming home. “The company is dynamic. I get to travel and meet new people. It is interesting. There is always something happening and I learn something new every day.”

Group CFO Ben la Grange has

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“This will give me time to lift my head and gain more operational and international exposure.”

For Nadine, this means her room to grow has suddenly opened up, although she will still be overseeing the financial aspects of Steinhoff’s businesses in Africa, including property, motor vehicles and investments. “I have been heavily involved in the detail of our African business until now,” she says. “This will give me time to lift my head and gain more operational and international exposure.”

Bigger picture Thanks to having the opportunity to see powerhouses like CEO

Markus Jooste and board chairman Christo Wiese in action, Nadine’s own working style is changing. “I used to be very quiet in board meetings, but I have been following why specific people speak up on certain things and have become much more vocal and effective. When I have the relevant knowledge, I speak up.”

As many CFOs can confirm, the real step up for a finance leader is to start seeing – and working on – the bigger picture. “I wish I could get rid of corporate reporting coming across my desk entirely, but the mundane stuff still takes about a third of my time,” says Nadine. “I am a person who can’t accept that something is good enough, even when people say I need to chill.

Corporate reporting needs to be 100 percent. That attention to detail is something that can hold a finance leader back, so I need to deal with that.”

What Nadine will always convey to her finance colleagues is to closely study the cash flow, if you want to know if the financial statements are accurate. “Cash is the only true story. These days, I love to sit back and consider if the numbers make sense when compared to the story. My rule

is that I don’t release any results to Markus and Ben if I have not yet seen the related cash flow statement.”

Relations with a wide range of people in the organisation are also crucial elements for CFOs to be successful, says Nadine, who moved from Gauteng to Stellenbosch in 2011, following the relocation of the corporate head office to the Cape winelands.

A collegial and warm working environment is not only about fun, but also about building successful careers. “A lot of people eat lunch here at the office and

we have a pub culture. I personally put a lot of value on those lunches and drinks, during which you can learn from colleagues from other areas of the business.

It also provides a bit of relaxation. You don’t have to stay until midnight, but at the end of the week, especially after a tough week, I like to sit down and enjoy a glass of wine.”

Shoprite

stake in retail giant Shoprite – after merger talks collapsed.

Steinhoff and STAR have secured call options which could see STAR acquire a 23 percent economic stake in the company, with 50 percent voting rights. “That means we will have to consolidate Shoprite’s numbers as part of our results, but they will stay separately listed at the JSE. It fits neatly with Steinhoff’s approach to decentralise.”

Life is never dull at the smallish Steinhoff head office in Stellenbosch. As part of the STAR plan, the company is also gearing up to establish a controlling

Advantages of close collaboration between the groups are many, says Nadine. “They have stores in more countries in Africa and their

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infrastructure is fantastic. We serve the same price-conscious customer with a complementary product range. Our combined buying power should reduce the cost of goods for both groups.

Another advantage is a property play in the rest of Africa. Together we can provide a 'one-stop-shop' offering. There is also the opportunity to learn from each other.

Every country is vastly different and working together allows us not to make the same mistakes twice and to build up in-country networks both groups can benefit from.”

Nadine believes the close relationship between Steinhoff and Shoprite will ultimately benefit the African consumer looking for basic goods. “I would hope so.

Pepkor’s philosophy has always been to offer products as cheaply as possible. Steinhoff’s absolute aim is to get the product to the consumer. If we can save costs and improve margin through our partnership with Shoprite, we don’t have to increase prices, which will help us to grow market share. Ultimately our customer benefits.”

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and all the other work that has “heaped up” while the focus was on the STAR listing. “For a number of acquisitions, we haven’t done purchase price allocations yet, and there are budgets to be done. It will be lots and lots of Excel spreadsheets,” she says, revealing that the 20-billion-euro company still primarily uses the popular Microsoft product for reporting.

However, elsewhere in the company, technology is right up there with the latest and greatest. “We

have recently invested in a complete digital retailer in France, Showroom Privé, giving the group access to first-class digital and mobile retail skills. As a group that primarily sells basic goods at the discount end of the market, we believe in an omni-channel approach. We believe in bricks and mortar, but we need to figure out how to successfully combine it with digital. Do we deliver? Is it click-and-collect? Or can you just view the stock online? It is interesting to debate this also from a numbers point-of-view.” l

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The extreme ambitions of Motus CFO Ockert Janse van Rensburg

Ain’t no mountain high enough “I like to set very high goals for myself and enjoy the journey to achieve them. I always joke that this is why I like to climb mountains,” says Ockert Janse van Rensburg, CFO of Motus Corporation. By Toni Muir

“

My forte has always been juggling things. I suppose that’s part of a CFO’s job these days – juggling many different tasks all at once,” says the Motus Corporation’s chief financial officer, who confesses that he is an “extremely ambitious person”.

Ockert spoke to CFO Magazine about his career, which has seen him progress quickly through the ranks, had him involved in a massive management buyout, and pushed him to climb some of the world’s highest mountains.

Ockert has climbed several of what he calls “meaningful” mountains above 4,000 metres, and says the European ones stand out as the more memorable because they were “extremely

dangerous”. He proudly shows several photographs of himself standing on the snowy slopes of one of the mountains he so courageously conquered, ice axe in hand, broad smile on his face. “If I set out to achieve a particular objective, I will plan, direct, organise and control it until it’s done.

I think that’s the way I go about things.”

As a leader of a team, you need to be very deliberate in order to scale scary summits, says Ockert.

“Even though you know where the final destination is, it takes time to get there. You eat an elephant one bite at a time. Never try to put the ultimate goal in front of your nose right at the beginning.

Rather, put the final objective in the distance and understand

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that you need to achieve countless numbers of small things along the way. When you are taking a team along on a journey like that, it would be overwhelming to expose everyone to the larger objective on day one. Over time you will expose everyone to the final destination, but you have to put different stretched, but achievable, goals in front of them on a continuous basis.”

better suited to the legal profession. “After becoming a CA, I did an H.Dip in corporate law. Maybe that got it out of my system! But in truth, it put me in good stead, as a lot of what passes across your desk as a CFO is rooted in legal matters. So, it’s been hugely beneficial. I now have a better feel for some of the legal aspects and it gives me a different perspective on certain situations.”

Hydrate and fuel

Gaborone

The key to this is continuous appraisal and interaction with your team, Ockert says. “When you climb mountains, you have to do exactly the same. You have to hydrate and fuel your body and you need to monitor the team you are travelling with. The health and progression of every team member will determine the ultimate success of the task at hand.”

Ockert completed his articles at PwC and although he says he never wanted to be an auditor, he spent a significant chunk of his career – 12 years – at the firm.

At the age of 31, Ockert became an audit partner at PwC and also gained some valuable African experience by agreeing to move to Gaborone, Botswana, to run engagements there. He convinced his wife that the move would be a good one, and with one child in tow, off they went. “It was a complete let-go of your natural environment and a leap of faith,” Ockert recalls. “It was quite a lot for the family to get used to but it was worth our while to experience different things. Otherwise

Trust is another important factor, the CFO says. “You need to explicitly trust the people around you. People working for you must trust you fully, and you need to trust them. On day one I’ll trust you completely. You don’t have to earn trust in my team, I’ll give it to you, but if you break that trust then it’s on you.”

Such a driven individual must surely have had his career plans mapped out from early on?

Ockert says that although he’s always had a passion for numbers, there was a brief moment when he thought he might be

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“If I set out to achieve a particular objective, I will plan, direct, organise and control it until it’s done.”

you get too accustomed to your life in a certain kind of mould.”

Two years later, when he returned to South Africa in 2007, Ockert found himself working in commerce, experiencing a “total change of profession”. He joined Foodcorp, at the time the third-largest multinational food producer in South Africa, which was non-listed and held by private equity. He says, “I remember the interview with the CEO of Foodcorp. He said if you want to come, then join. I said I didn’t know if it was going to suit me and he said, well I don’t know if I want you either, so let’s do a six-month contract and see how it goes. Six months turned into almost eight years!”

“Being part of one of the largest privately held, completely debt funded entities in the country really was a roller-coaster ride.

One moment I was still learning the industry as the new CFO, and suddenly I found myself giving presentations to large international investment companies that were either trying to buy the shares or buying our listed bonds all around the globe. Coupled with rating agency and quarterly listing reporting, my life changed completely and I realised what it was like to travel to London for a day. It wasn’t even funny when I told my family on a Sunday that I was flying to London in the evening and would see them again on Tuesday for the morning school run.”

But then, Marikana happened.

“In September 2012, the international shareholder consortium, had a complete change of mind and wanted to sell immediately.

We found a suitable buyer in the form of Remgro, who decided they wanted to merge this business together with their chicken and sugar businesses, forming RCL Foods.”

Motor businesses

Learn from Ockert: how to get ahead “You need a few attributes to really be successful. You need to have some level of IQ or else you’re always going to struggle at some point in your career. Important to this is moral intelligence, as well as spiritual intelligence, and you need a value set in your life. You also need to be able to express these values to yourself. If you can do that, you can live with your own standards. Emotional intelligence is important – being able to interact with others is as important as understanding the numbers. In this job, you get to interact with people from so many walks of life, and you need to be able to relate to all these people, with humility in yourself. You might one day interact with workers on a factory floor and the next with execs at board level. You also need to be grounded and have a positive attitude.

You must set goals for yourself and also pursue continuous learning – you’re not perfect the day you finish your CA exam. You need to continuously challenge yourself and move into different industries, and you need to learn – be honest with yourself about what you don’t know.”

“With all the excitement suddenly taken away – I needed a new challenge (mountain).”

Without really looking, Ockert’s next opportunity arose in January 2015, with Imperial in the automotive industry. “I wasn’t sure I would like it but I was up for the challenge,” Ockert says frankly, though with a laugh. In July 2016, it was decided that Imperial’s motor businesses (vehicle import, distribution, retail, rental, financial services and aftermarket parts businesses) would be consolidated into one. The new company, Motus Corporation, was bedded down by January 2017, with Ockert as CFO and former award-winning group CFO Osman Arbee as CEO. In forging a new consolidated entity, different personalities with their own deeply rooted working ways were now also asked to work together and create a new common vision and mission. It was thought that one of the best ways to get everybody acclimated was to change the location of the offices, so that the

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working space was new for everyone – a key facilitator of change.

“We felt quite strongly that people would need to feel like they had a new sense of belonging.

With a new building, we could create a new culture. Also, on day one, everybody suddenly needed to learn where the kitchen was and where to make coffee.”

In this regard, Ockert says they encouraged the staff to get to know each other and says people had to learn how to interact.

He did his homework, learning a little about each person, and working hard on how best to position them in the office space, which he intentionally made very open-plan for the finance staff.

According to Ockert, one of the things keeping him most busy in his current role since starting at Imperial has been articulating the business strategy and ensuring strategic alignment of all the business interests. “There were a few non-core types of businesses that weren’t strategically aligned to what Imperial – and now Motus – wanted to do. Part of my function was to bed some of those down, so either decide where they’d fit into a bigger structure and amalgamate into other entities, or dispose of them entirely.

Ockert says the company has disposed of over 20 entities in the last year and recently announced some newly aligned acquisitions. “The new acquisitions we are making are consistent with

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Motus' strategy to deploy capital and its vehicle retail expertise in pursuit of growth and return beyond South Africa,” he says.

“These will also be bulkier in size to make a more meaningful contribution – one where you will see a noticeable difference to both the top and bottom line. We will also ensure that they fit into the company’s long-term strategic plans.”

“I’m the person who makes coffee and breakfast for everybody every morning at home, because it’s what brings us all together.”

Starbucks and Billabong At home, Ockert has a wife and two children – a son of ten and a daughter of 13. He says he spends as much time as he can with his family, as he feels “having

that connection is very important”. He says, “I spend time with each family member individually, too. You need to have the dinner or spa date experience with your wife; you need to find out what makes your teenage daughter tick – maybe Starbucks coffee and shopping at Billabong. My son wants to hit balls, so on Saturdays we play golf.” He adds that his family is also very fortunate to take proper family vacations whenever they can. “This is a very demanding work life. It’s a proper 12 hours. I’m the person who makes coffee and breakfast for everybody every morning at home, because it’s what brings us all together,” he says.

Asked if he ever manages to switch off completely, Ockert considers before answering. “There will probably always be something.

I think learning how to switch off is a bit of a skill that you need to teach yourself. I worry about lots of stuff, but it becomes a bit of a discipline as to how you switch off, and this is different for different people. You have to figure out what works best for you and your own routine.” l

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Primedia CFO Chris Patricios about his career, his team and doing what is right

Credit where it is due CFO Awards 2017 nominee Chris Patricios, group CFO of Primedia, is a thoughtful leader, one who takes the time to get to know his team and play to its strengths. “I believe that human beings thrive on recognition, down to the smallest things, even a simple thank you.” By Toni Muir

“

It’s challenging, but it’s healthy to have a challenge,” says Chris Patricios. He could be talking about his work as finance boss of Primedia, which operates more than 50 brands in broadcasting, advertising, marketing, promotions, sport, entertainment and digital media.

Instead, Chris is talking about what he does when he is not working. “I started running six years ago to get fit,” he says. “I got into half marathons, which I still maintain is the perfect distance. I always said I’d never do a marathon. I did four Two Oceans half marathons and thought, ok, let’s give the Ultra – which is 56 kilometres – a bash. I’ve done it twice now. I recently succumbed to some pressure from my running mates and have entered Comrades next year. When I’m

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training for something, I run six days a week.”

Dedication and a methodical approach are good qualities for any professional, but for CFOs they are pivotal. Chris has been in his current role for six years and with Primedia for nine. He says that while he may not be “absolutely, outwardly ambitious”, he does set high standards and strives hard for success, without being afraid of making mistakes. “I don’t like having regrets. Are there things I would’ve done differently in my career, or could’ve done better, yes, there always are. As long as I’m learning from it, then it’s positive,” he says.

Barack Obama One of Chris’s strengths – and indeed one of the aspects he most enjoys about his job – is

managing and motivating a team. A leader’s greatest asset is their ability to communicate well, he says; something he strives towards. In his opinion, Barack Obama is “one of the most outstanding communicators” in recent history. “Being able to communicate in the way he did, makes him stand out for me as a great leader. I believe he won people over through the strength of delivery of his communication.”

“When you are part of a team and feel valued, you’re more willing to go above and beyond.”

the routes that you can go. The CA route is well set out, it was an attractive option. I got into it almost by default and started to enjoy it. I did vacation work at KMPG and really liked the people I was exposed to – professional and like-minded people.”

His studies took care of the first seven years of life after school, though Chris says he was then faced with the task of choosing a way forward.

“The decision to pursue a commerce degree aside, for the first time in your life – now you’re 25-odd-years-old – you’ve got to make a career decision. For me, that came as quite a stark reality check. Do you want to stay in the profession and become an audit partner or get out into commerce?”

When it comes to getting the best out of his team, Chris says that giving credit where credit’s due goes a long way. “I believe that human beings thrive on recognition, down to the smallest things, even a simple thank you.

The response you get from that is immeasurable. I think leadership includes acknowledging performance,” he says. Trust is also important, he adds, and getting to know your team members helps develop a level of trust.

“When you are part of a team and feel valued, you’re more willing to go above and beyond. I try

to expose my team to divisional/ subsidiary board meetings and audit committee meetings where I can. They need to feel part of the business.”

Default Chris recalls how he came to pursue a career in finance: “My parents wanted me to study engineering. My father was in business – he was an entrepreneur – and I knew I wanted to be in business and pursue a career in commerce. I enrolled in a B.Comm at Wits University, and quite early on they present

Unsure what he wanted to do, Chris decided to take some time out to gain perspective.

He headed to London, where he joined Credit Suisse First Boston, and got exposed to financial services. It turned out that financial services wasn’t where he wanted to be but Chris says, having been exposed to it, he was able to come to this realisation confidently.

World Cup Home beckoned and Chris returned to Johannesburg – “a highly underrated city”, in his opinion. Having maintained his connections at KPMG, he rejoined the firm, though not in auditing. Instead, he started with one CFO MAGAZINE • CFO.CO.ZA

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of the consulting business units in hospitality, leisure and tourism. “It was interesting; a nice sector to work in,” he says. “It was during the property boom in South Africa. Some of the work we’d do included feasibility studies on new leisure developments. I was exposed to tourism planning work for the 2010 FIFA World Cup. I was the only finance person in a team of tourism and hospitality peers. It was good because, while they relied on me from a financial modelling perspective, I was exposed to a non-financial way of thinking. I realised that numbers are important but there are always other equally important aspects to a project to be considered.”

After three-and-a-half years, Chris decided he wanted more exposure to being in a business, and joined one of the Servest businesses – a unit involved in golf course construction – as a divisional finance director. “It was a baptism of fire!” Chris jokes about the role. Having always worked in a purely professional environment, he was now exposed to a wide variety of people, from the CEO to the teams working on the ground, he says.

“I realised things aren’t always as easy as you’re used to.”

Two years later Chris moved on again, accepting the group financial manager role at Primedia.

In May 2011, when the CFO role became vacant, Chris took the leap. He calls Primedia a “great

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place to work”. He says: “We have a good team here at group level, as well as in the different divisions and in our subsidiaries. We have a great executive team. We all work hard and get along well.

This is important because you spend a lot of time in the work environment and if you don’t get along with your colleagues, you’re simply not going to enjoy your role”

Hard times According to Chris, the current economic environment means his days are busy. “Most of my time is spent dealing with challenges related to performance in a very tough environment,” he says. Hard times mean that reporting needs to be accurate, he adds, as there’s no margin for error. “Trying to say positive is a challenge, so I find I need to keep the executives across the group motivated by consistently highlighting positives in financial performance, while remaining realistic and providing a frank assessment of trading in a tough market,” he says.

Something Chris finds somewhat frustrating about his role is that, as a media organisation, the company is dependent on advertising spend. “But ad spend is sentiment driven,” he says with a frown. “Companies take a view on the macro environment and that view impacts their ad spend decisions, which impacts us.

There is so much potential for us as a country to grow but we seem

so determined to put the brakes on that and not achieve what we should be achieving.”

One way to mitigate this, Chris says, is to streamline the organisation, and make it as efficient as possible. “We’ve had to look at our cost bases and do more with less – become more efficient.

There’s always more to be done but we’re getting there,” he says.

“This sets you up for when things do turn – and they will. You will then be well positioned to take advantage of the upswing. We are positive this will happen.”

“If something just doesn’t look right, tell people. If you keep it to yourself, it’s not going to end well.”

When the going gets tough, some might be tempted to cut corners. “Especially in the current environment, it’s important to do what you know is right,” says Chris. “If something is wrong, or you think it might be wrong, ask questions. If you don’t get satisfactory answers, let others know.

If something just doesn’t look right, tell people. If you keep it to yourself, it’s not going to end well.”

Family man Chris

“Like many South African corporates, we’ve had our fingers burnt in certain territories in Africa and learnt important lessons.”

Outdoor advertising Primedia has several business interests outside of South Africa.

Chris says they learnt as much about what to do as what not to do. “Like many South African corporates, we’ve had our fingers burnt in certain territories in Africa and learnt important lessons,” he says. “Our Rest of Africa business is focused on the outdoor advertising business. We saw potential in this and it grew, so we decided to split it out as its own business and formed its own divisional board.”

The focus for growth was on West and East Africa together with the more established Southern African businesses, says Chris. Specific countries included Zambia, Botswana, Namibia, Ghana, Zimbabwe, Nigeria, and Kenya. “We made an acquisition to grow our Zambian business. But, given the significant downturn on the continent, the opportunity now probably lies in consolidating our businesses and returning to what we know, so, Botswana, Zambia

and Namibia,” he says, adding that these countries are also Primedia’s biggest successes outside of South Africa. “Our focus has switched to protecting our investments in those other countries; for example, in Nairobi we put up a large format digital screen to distinguish ourselves from the general advertising clutter; a more focused approach.

We have downscaled our growth thinking generally and are reassessing where we are and identifying our risks.”

Chris’s advice to CFOs whose companies are considering African expansion: do as much market research as possible – both formal and informal – and pick the right local partners. “You’ve got to be able to trust your leadership on the ground. Sometimes you pick the partner you think is right and only once you begin trading do you realise the realities of operating in a particular territory,” he says. “In new territories, where things are quite foreign, you have to rely on these local partners for information, and supplement that with expert advisors.” The easy option is to pay a consultant for a country report, he says. “We find the best way to get information on a trading environment is to balance that formal report with informal visits and questions, and speak to competitors, advertisers and clients.

The value of an expensive formal report may be less than a nugget of information from someone on the ground who actually knows what’s happening.” l

Chris comes from a large Greek family. The third of four children, and younger than his older siblings by six years, Chris says his childhood taught him how to share and fend for himself – qualities he tries to teach his own children; a daughter, Charlotte, age 10, and a son, Jack, age seven.

A dedicated father and husband – Chris and his wife Tessa Lynn have been married for 12 years – Chris says family time includes involving himself in his children’s lives. “My daughter, Charlotte, plays tennis matches on Thursday afternoons. I block that time out in my calendar to go and watch her play. I can work at night,” he says. “The tech we are exposed to these days is intrusive because we are constantly available but it can work in your favour. Most things I can achieve in the office I can achieve at home.”

Asked how he balances his demanding job with his family, Chris says a work-life balance is not easily achieved, but something he always works towards. “Have I got it right, no.

Am I conscious about it and working towards it, yes.”

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An interview with financial modelling wizard, Goalfix CEO Colin Human

The man behind the model After the sensational success of Colin Human’s financial modelling presentations at Finance Indaba Africa 2017, we sat down with the Goalfix CEO to discuss the need for CFOs to look ahead, the importance of financial modelling and dealing with the lack of certainty. By Sungula Nkabinde

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Biography: Colin Human

T

oo many CFOs spend their time as financial gate keeper and get tangled up in accounting, says Colin Human, financial modelling wizard and CEO of financial management consultancy Goalfix. “It is infinitely more important to know what is going to happen or to have an ability to forecast in a flexible manner, than knowing with precision what happened in the past.”

Goalfix is South Africa’s best provider of financial modelling training courses and also offers help with corporate finance, corporate performance improvement and corporate financial health assessments. At this year’s Finance Indaba Africa, Colin’s presentations about financial modelling were among the most popular seminars, with Boardroom 4 bursting at the seams on both 12 and 13 October.

Using Microsoft Excel, Colin started his modelling activities in the early 80s, building up vast experience and knowledge through the numerous corporate financial models he has crafted.

“Let me tell you something about CFOs in this country,” says Colin.

“As you know, the accounting profession dominates boardrooms in South Africa. There are many people, I say this respectfully, who are CFOs of companies who should still be in the accounting profession, because they don’t really understand business and they are not

really involved in directing the company.”

Gatekeeper According to Colin there are many CFOs who just play the role of the financial gatekeeper.

“They are very good at reporting what has happened and producing monthly management accounts and all of that kind of stuff. But what has already happened is only of relative importance. History is important but it’s only relatively important.”

“Financial modelling is fast becoming a required skill in the finance profession.”

Colin Human is one of South Africa’s leading financial modellers with extensive business experience. A chartered accountant, he has occupied various senior management positions in both public and private companies across a wide range of industries from aluminum, building, ceramic tiles and engineering to granite, education, hotels and corporate finance. He is currently a director of a number of companies, and CEO of GoalFix (Pty) Ltd.

pany in the world. That tells you a huge story,” says Colin. “It tells you that the accounting profession is recognising the need and importance of giving value-added services to their clients, helping them to look forward.”

Know your business While customers, value chain and other stakeholders are important, it is the shareholders that ultimate decide the future of the business, says Colin.

“And the key to taking care of shareholders is being able to forecast future performance with some level of reliability. That is why financial modelling is fast becoming a required skill in the finance profession,” says Colin, adding that demand for financial modelling experience continues to outstrip supply.

“About a year ago, one of the largest international accounting firms, Mazars, bought Corality Financial Group, which is the second biggest modelling com-

Models are useless if they are built by people who don’t understand the business case. Colin says this is the first thing he explains to those studying financial modelling, because everything revolves around having the right variables, and accurately reflecting the impact they have on the business.

“You have to wrap your head around the business case,” he says. “I’ve built models for the Central Energy Fund to model methane gas production from landfill sites. I once built a model for the Swaziland electricity company to model the electricity requirements for the country of Swaziland for 10 years. I have CFO MAGAZINE • CFO.CO.ZA

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also built mining models and models for insurance companies.”

According to Colin, these examples show that modelling is pertinent and can be applied to almost anything if you can quantify it. “There’s an old saying that ‘if you can’t measure it you can’t manage it’ and, to some extent, that’s the truism of modelling.

Because, if you can’t identify what the driver is, then you can’t build a successful model.”

Colin says one of the main criticisms that people level at modellers is that they build models, but they don’t really verify the underlying assumptions which are driving the model. “If the inputs are wrong, then everything else that follows is going to be wrong. Sometimes you have to spend a great deal of time digging, in conversation, identifying, verifying and validating input.”

Excel Corporate financial packages like IBM Cognos, Hyperion or enterprise resource planning software SAP have modelling forecasting components, but Colin says they cost up to R2 million and are not as flexible as Microsoft Excel, which is what his company uses. “Excel is ubiquitous – everyone uses it – at all levels, in all companies.”

The downside with Excel is that there is concern among people around the integrity of the software, given that the formulas are not protected, which means there 52

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will always be questions about the accuracy of any given model.

“If you and I are going to invest a billion rand in a new mine and we have a model, we want to know that this model is right. The answers that it’s giving us really need to be accurate. The issue of accuracy and integrity have always been a concern relating to building Excel models,” says Colin.

The only way that you can address this issue is to adopt a methodology that is logical, sequential and structured, says Colin. Goalfix has adopted the internationally renowned FAST modelling standard to ensure model reliability. “I once built a model for a platinum mining company which was raising R1.8 billion on the London AIM market. It was a huge responsibility for me to build that model and present it to my client knowing that they were going to use it to talk to banks and private equity investors in London. It is a seri-

ous undertaking, and depending on the complexity, it can take hundreds of hours of work.”

Uncertainty No matter how good a model is, there will always be uncertainty, especially when forecasting over long periods. The further forward you go into time, the greater will be your margin of error. “The reality is that there is no certainty in prediction,” says Colin.

“The moment you enter into the future, you will be wrong. There is no certainty in prediction. It just doesn’t exist.”

So how do you solve the problem? “You build a model which is driven by well-researched assumptions and is dynamic and flexible so that you can react to changes instantly. The real beauty of financial models does not lie in their absolute accuracy, but in the ability to adapt quickly and easily to changing circumstances.” l

2018 course dates 22-25 January 29-31 January 06-08 February 12-15 February

20-22 February 06-08 March 12-15 March 16-19 April 23-25 April

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REGISTER TODAY Contact Sarah Chalmers (schalmers@cfo.co.za | +27 82 859 1245) for more information and to secure your seat today.

DISRUPTION

The continent’s top disruptors on display at African FinTech Awards 2017

Easy Equities and ThisIsMe lead the way South African homegrown FinTech sensations Easy Equities and ThisIsMe went home with the top prizes, but there were many other highlights at this year’s edition of the annual African FinTech Awards. By Ebrahim Moolla

A

s FinTech continues to make a meaningful and far-reaching impact in terms of financial inclusion across the length and breadth of Africa, the African FinTech Awards 2017 consolidated its position as the continent’s premier awards event with a dramatic finish that even the most astute sector analyst could not have foreseen.

ThisIsMe and reigning champion EasyEquities could not be separated by the judges and were both named overall winners after an intense two days of pitch battles at the Finance Indaba Africa 54

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at the Sandton Convention Centre in Johannesburg on 12 and 13 October.

There was a mix of familiar faces and new entrants in the winners’ circle of leading disruptors.

Last year’s overall champion EasyEquities clinched the InvesTech category once more, and has made great strides in investing in its platform, development and broadening access to both local and US stocks.

Co-champion ThisIsMe claimed the Innovative Banking title at the first time of asking with its focus on multi-factor identity verification, enhanced due diligence and

authentication through its proprietary platform. The company can complete the FICA process in under three minutes – an African record – and has completed over one million verifications.

Currently, it has more than 15,000 individual users.

Blockchain The ever-popular Blockchain and Bitcoin category drew unprecedented interest and was closely contested, but The Sun Exchange, an online socially conscious solar power marketplace and another winner from 2016, once again reigned supreme, with charismatic CEO Abe Cambridge saying its global success has been based

Winners of the African FinTech Awards: • Blockchain & Bitcoin: The Sun Exchange • Incumbent Banks: FNB • Innovative Banking: ThisIsMe • InvesTech: EasyEquities • Lending & Financing: Ovamba • Payments & Transfers: Kocela Overall winners: • ThisIsMe & EasyEquities

on the key innovations of fractionalised panel ownership and blockchain universal asset leasing.

FNB emerged as the winner of the Incumbent Bank category for the second year running under the astute guidance of visionary CIO Peter Alkema. The bank, which has earned global plaudits for its digitalisation efforts, was the first bank in Africa to offer integrated telco service in 2015 with FNB Connect, and launch its own branded smartphones.

Kocela took the honours in Payments & Transfers, another category that attracted much attention, bearing in mind the importance of remittances to mil-

lions of Africans. Founded by Abel Masai in 2014 after the developer noticed that no one was paying any particular attention to the mobile application development space, the firm has produced the leading payments app in East and Central Africa has worked with the likes of The Standard Media Group, Radio Africa Group, and Credit Bank.

Ovamba retained its Lending & Financing title. The company was founded in 2013 in the USA by long-time friends, Viola Llewellyn and Marvin Cole, who saw an opportunity to help empower fellow entrepreneurs in Africa and the Middle East by providing them with the access to finance

needed in order to flourish in their businesses.

Recognition The awards recognise innovative and disruptive financial technology companies operating on the continent that have excelled in their sphere of business. Participants took the opportunity to network with the 4,000 Finance Indaba Africa attendees, potential business partners and investors, demonstrate the value of their products and services and harness the power of an extensive marketing campaign that reaches more than 50,000 finance professionals.

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A rigorous voting process involving the public and expert judging panel defined the top three firms, who engaged in intense pitching battles during the awards event at the indaba. This voting process began in May, with public votes constituting 25 percent of the weight in determining the African FinTech 100, while the assessment of the judges constituted the other 75 percent of the weight.

The panel of judges consisted of seasoned investors, academics, innovation heads of top banks and entrepreneurs with an extensive track record in finance or technology. This year, it included such thought leaders as Liesl BebbMckay, Head of RMB’s innovation & disruption unit the Foundery, TechStars MD Yossi Hasson, Kalon Venture Partners CEO Clive Butkow and management consultant Heinrich Degener.

Pitches Pitches were capped at seven 56

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minutes and were followed by a five-minute Q&A session with the judges, which covered the areas of innovation, customer satisfaction, value, traction and delivery.

Alongside the awards pitches, groundbreaking firms such as Kalon Venture Partners and DocFox delivered fascinating insights into their operations, while other FinTechs also made presentations at a dedicated venue. SA’s newest stock exchange ZAR X was the sponsor of the awards and also competed in the InvesTech category.

African FinTech community manager Maud Meijvis was pleased with the continuing growth of the awards and said it was a positive sign for the FinTech sector on the continent.

“The standard of competition has been incredible this year, with the judges having a really tough time of it to decide the

winners,” she said.

EasyEquities EasyEquities and ThisIsMe may have been mightily impressive in romping to victory in the African FinTech Awards 2017 at the Finance Indaba Africa, but this doesn’t mean that these exciting FinTech firms are planning to let up on the pace of growth anytime soon.

EasyEquities will be aiming for its third win on the trot in 2018 and under the shrewd leadership of CEO Charles Savage, few would bet against that happening. The company is holding true to its vision of closing the gap between the haves and havenots by democratising stock investment and a hallmark of its success has been its customer-centric approach.

“Only a few people around the world hold shares, but these are the greatest assets for building

wealth. We abandoned the ‘minimum fees and investment’ so common in this sector, which gives people access to shares they loved through fractional ownership. Our users can invest a dollar in a Berkshire Hathaway for example,” said Charles.

“We solve the lack of access to education through social media and an intuitive brand interface.

In three years, we’ve saved R100 million in investment fees, which over the course of an investor’s career could mean the difference between retiring wealthy and not at all. We don’t build what we think our customers need – we build what they want us to build.”

The R100 million windfall from Sanlam’s investment in the company earlier this year opens up a broad range of opportunities for EasyEquities. Charles and his team will now look to expand operations to Australia, which he said has a similar culture to

South Africa, and six Asian countries through the Sanlam alliance.

ThisIsMe FICA specialist ThisIsMe has experienced exponential growth over the past year and has already surpassed the notable milestone of one million verifications. With chief marketing officer Brennan Wright saying the firm values the Fica market at $75 million, it will be looking to expand a user base that features more than 15,000 individuals and 85 merchants including heavyweights Sanlam, Investec and Stanlib.

In addition to winning the African Fintech Awards, ThisIsMe has been selected as one of three finalists in the Accenture Innovation Index Awards and also recently participated in Gartner’s Aspiring Innovators Programme 2017.

“The repetitive submission of

documents such as an updated proof of residence is still commonplace, unfortunately. Fica hasn’t caught up with the modern world until now. We involve users every step of the way, from downloading the machine-learning app and uploading documents to linking to merchants and accessing data with their permission,” said Brennan.

ThisIsMe co-founder and CEO David Thomas added that the firm is looking to strengthen its staff complement and move into other international markets.

“The business is growing and we plan to attract new talent; we are growing globally into Africa and other markets and we are constantly enhancing our technology.

We are grateful to be winning a number of awards including the highly regarded Best African FinTech Award for 2017.” l More information: FinTech-Africa.com CFO MAGAZINE • CFO.CO.ZA

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DISRUPTION

An introduction to the dynamic ZAR X CFO – and gourmet braai master – Ebrahim Ally

“You dare not fail” Ebrahim Ally was so convinced that South Africa’s newest stock exchange would become a success that he joined ZAR X without a salary to make this happen. “My pet hate word for 2017 is ‘disruptive’ – but dare I say it, that’s exactly what we are.” By Toni Muir

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ripped in the teeth of some powerful competitive and economic headwinds, ZAR X, the second stock exchange to be licenced in South Africa in 58 years, has nailed down its status as a champion of financial inclusion and access. In this interview, ZAR X chief financial officer Ebrahim Ally recalls the gruelling journey getting to this point.

“We started out at a disadvantage,” he says. “When I joined the company in June last year, ZAR X had received a conditional licence, which the JSE then challenged. After receipt from the Financial Services Board (FSB) of a fully-fledged stock exchange licence in August, we still couldn’t commercialise what

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we had due to yet another challenge to the FSB process, this time through a combined application by the JSE and another new licence.”

To preserve what was in the business, Ebrahim says all staff went on risk, none of them taking salaries. “We all believed so much in the difference we could make to the financial markets that we were determined to see the business through,” he says. “In a way, the interference served us well, because it provided objective proof that the FSB had followed all the right procedures in granting our licence.” This last application was also dismissed, and punitive costs were awarded against both applicants in February this year. “Our model was vindicated,” Ebrahim says,

“and we could get going with the business.”

Ebrahim says the ZAR X team is “still running hard”. Each new listing gives the market confidence and gets people to sit up and take notice, he says. “We are inundated with requests to understand and discuss our listing requirements, because we bring something different. My pet hate word for 2017 is ‘disruptive’ – but dare I say it, that’s exactly what we are. We have built a stock exchange from a clean sheet of paper and disrupted the status quo. We always ask the question, ‘why not?’, and we’re getting a lot of attention for that.”

Coming home For Ebrahim, there was never a moment’s doubt that he would

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

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

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

DISRUPTION

one day be a CA. After finishing his studies and completing articles at one of the Big Four firms, he followed through to one of the Big Four banks on a contractual bursary commitment, and then entered the asset management industry as an equity analyst with a leading Cape Town firm.

He worked in this space for just over four years before moving on, though he had to observe a strict restraint of trade first.

Ebrahim recalls moving out of the asset management space.

“When I left it was tough. I wanted to be in the markets, but the restraint meant that I couldn’t anymore. I enjoyed my next few roles, which were away from the markets, and this allowed me to re-invent myself.

Now, being back in the markets, it’s like I’ve come home. It’s where I've always wanted to be.”

Ebrahim adds that he is very passionate about financial market education. “Give me a radio slot with the broader South African public and financial inclusion can become a reality,” he says enthusiastically.

Reinvent yourself “In the early part of your career, you’re appreciative of where you are. You’ve got a degree, but you’re not sure where that is going to take you,” Ebrahim says. “I went from a Big Four firm to a Big Four bank and then to a leading brand asset management firm. And then into nothing. You ask yourself, ‘have

“Sometimes you must take a few steps back and reinvent yourself.”

I gone forwards or backwards?’

Sometimes you must take a few steps back and reinvent yourself. I told myself, ‘You dare not fail. You didn’t aggregate all that experience with all those great brands to not make something of yourself’. So, am I naturally ambitious? Of course! I think you have to be naturally ambitious if you want to take that CA qualification and do something entrepreneurial with it. I wanted to make something of myself for myself, for my family.”

Before joining ZAR X, Ebrahim was the CFO of The Wired Corporation – a large telecoms infrastructure company valued at over R1.4 billion. He left this role to join what was essentially a startup. “When I came over to ZAR X, I knew exactly what I was getting myself into,” he says.

“Around 80 percent of businesses fail within the first year. If they aren’t extremely focused, that’s where things generally go wrong for small businesses.”

However, Ebrahim believes he successfully brought this discipline across and managed the company’s resources in a way that’s reflective of his experience

in managing startup businesses.

“I told the team to manage their expectations. It’s a new business, things will take a bit longer to get to where you’d like it to be. Financial resources need to be very carefully managed in the first 12 months. That was my responsibility and I think we’ve done that well,” he says.

Cohesion The challenges seem to have helped the ZAR X team to bond and Ebrahim speaks fondly of his colleagues: “I love the people I work with. They are masters of their craft. I’d like to think I know my craft and that we gel well together; that we complement each other and respect each other. Discussions are often robust, though we generally get to the right decision in the end. This cohesion brings everything together. That’s incredibly important.”

“We’re a business of nine people that run a stock exchange.

There’s no way you can be focused on only one thing,” Ebrahim says with a laugh. “I do business development, promote listings, run the HR function, a bit of marketing, I’m out there talking the talk; it’s exciting.

It’s so much more than just a finance role – it’s an entrepreneurial role.”

Ebrahim says he particularly enjoys the dynamism and flexibility of his role. “I’m not boxed into just playing a financial role. I can play a role across

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the organisation, and we are flexible enough as a young company to be able to do that. Every employee engages and interacts across all aspects of the business.

Here at ZAR X, we all act like owners of the business.”

Three listings Asked how his time in the role has been, Ebrahim answers by saying, “We’ve got three listings under our belt – Senwes, Senwesbel and TWK Investments, with a combined market cap approaching R3.5 billion. That’s a good start. The proof of the pudding is in the eating. You can only show credibility when you actually bring listings on board.

Liquidity levels are comparable with other JSE listings of similar size, nature and free float. That’s been our biggest success to date.”

ZAR X approaches South Africa’s current economic environment from a fresh perspective, seeing opportunities where others see problems. “In this tough economy, we start to see jobs being shed, including at the JSE,” Ebrahim says. “The incumbent is the dominant market player, and when a company that makes R900 million in after-tax profit decides to cut costs, you know things are tough.”

Generally, tough times translate into a difficult environment to raise capital, Ebrahim says, and makes listings more difficult.

“The smaller listings are always the toughest in this environment but therein lies an opportunity

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for us. Companies that want to raise money in this environment can’t afford to be bogged down in red tape and the costs associated with listing on a legacy exchange. They need to find other ways and other markets to raise capital, through non-conventional means. That’s where we can play a role. Through our technology and pragmatic listings framework, this creates an opportunity for us because we do things differently and are therefore able to access pools of capital not previously accessible. People are looking at us and saying there’s an alternative – a viable alternative.”

Ebrahim wants to see smaller businesses with great business models and above-average growth potential tap into public capital because the investing public is crying out for the opportunity to be included in the listings space. “With ZAR X, investors can open a share trading account for as little as R1,000, making owning a piece of the South African economy a reality,” he says.

Gourmet braaing Ebrahim believes he’s come full circle as far as leading a balanced life is concerned. “Asset management was hard work. The work-life balance of 15-hour work days for four years was difficult.

I loved it, but left when I realised I had lost out on being with my family and seeing my kids grow up. So, in my new role as a CFO, I have made it my intent to develop

somewhat of a more balanced perspective,” he says.

However, ZAR X being a fledgling organisation with huge growth potential, it requires a lot of effort, he says. “I think the time spent with my family over the last eight years means that now they can give me the support and the time to do this. I’m taking them along with me. They come here often, they see what we do, and they enjoy it. My kids understand what ZAR X does better than most seasoned financial professionals out there. My boys are 16 and 14, then come the girls aged 12 and four. I take the kids to school every day, so I get to spend that time with them and chat to them. When I get home, they ask me about my day. They take a keen interest in my work, which they didn’t previously.”

On weekends, to relax, Ebrahim says he enjoys golf and gourmet braaing. He laughs and says: “What can be ‘gourmet’ about braaing? I guess it could be as simple as slapping some chops onto the fire on a Saturday, but we’re talking about tandoori chops, chimichurri leg of lamb, and chicken tikka masala – not exactly your typical cuts. My wife Fatima is our gourmet caterer in the kitchen, which as a competitive person, pretty much means I have to bring my A-game to the braai stand!

It’s a great family activity. We all take turns. The kids braai, my wife braais, we all braai.” l

DISRUPTION

Everything you always wanted to know about bitcoin but were too afraid to ask

Curb your cryptofear Do you know what blockchain and bitcoin can do for your business? Or do you even know what they are? Savvy CFOs will begin to ask how we need to change to be competitive in this new world, argues Raymond de Villiers of TomorrowToday Global. By Raymond de Villiers

O

pen your social media feed and every second sponsored post or ad is about Bitcoin. Have drinks or another social event and someone inevitably has a story about someone who has made a fortune in this new space… and everyone else pretty much nods their head trying not to look ignorant.

As CFOs and other finance professionals, we look at the info coming through about cryptocurrencies and blockchains and even for highly educated individuals like us it doesn’t make sense. How is this a currency when it follows so few of the norms and processes around the management and creation of fiat currencies (paper or coins deemed to be money by virtue of law)?

There is the rub. Bitcoin, other cryptocurrencies, the blockchain and other distributed ledgers function more like commodities

than currencies in the way they are created and valued.

The blockchain The blockchain does to transactional information what the internet server infrastructure did for email. At its heart, the blockchain is a ledger like any other that records transactional information - essentially who owns each individual bitcoin. The major difference is that it doesn’t sit in one physical place, but is distributed across tens of thousands of computers across the world.

Every ten minutes, the ledger pulls together the most recent transactions into a “block” of information. But, this block is very noisy and mixed up.

Imagine standing at the door of a busy restaurant and trying to listen to any conversations happening inside. From the door, it is one garbled cacophony of voices.

Take a ten-minute recording of the noise and that is the same as

a block because all of the activity in the environment from ALL of its users has just been bundled together.

This block of transaction data is sent to the tens of thousands of computers around the world linked to that particular ledger.

These are small, highly efficient and singularly focused machines using a special algorithm that they apply to the data.

All of these machines begin to work the data together. Using the restaurant noise illustration, they essentially take the noisy recording and begin to disentangle individual conversations in the room so that they can be heard.

The 10-minute block of transactions is then connected to the preceding 10-minute record, and will likewise be connected to the succeeding 10-minute record, a chain of blocks, or a blockchain of authenticated transactional data. Using our restaurant anal-

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ogy, it is the linking together of lots of 10-minute recordings so that a whole evening of conversations may be listened to as one seamless stream.

The blocks are saved and distributed across tens of thousands of machines around the globe.

If one machine or record is compromised, the fundamental integrity of the blockchain remains due to the distributed nature of the recording process.

Mining The process of disentangling and authenticating the information in a block is called “mining”. There is a payment of 12.5 bitcoin generated by the algorithm per block of information. The 12.5 bitcoins are allocated to the first machine to complete the authentication of the block. The authentication process effectively uses the principles of gamification to manage the reward process.

To understand this process, it is easier to think of gold than money. We get gold by accessing a body of ore under the ground.

How does the gold in a gold bar or piece of jewellery get there?

• Dig holes in the ground • Blast underground rock into pieces • Haul it to the surface • Crush the rock into powder • Add cyanide and other chemicals to the rock • Remove the metal • Put it into a furnace • Pour out the gold • Use the gold for economic or

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decorative purposes In the process outlined above, did we ever create the gold? No, it was always there. We simply used a process to unlock it from the rock and repurpose it for our needs. In the underlying algorithm that created the blockchain, 21 million bitcoins were embedded as the reward for the authentication process. They aren’t created at the end of each 10-minute cycle. Like gold, they are merely released from the underlying “ore”/algorithm.

Bitcoin Over time, as we mine gold, we need to dig deeper and deeper to get to additional ore bodies.

There is an extra cost in reaching these deeper bodies, with the price of gold determining whether it is economically viable to keep incurring the additional cost. The biggest input cost for mining is the cost of energy. This is where the rapid increase in the price of bitcoin comes into play.

There is a basic supply and demand dynamic around bitcoin. Like gold, there is a limited amount in circulation so the more demand there is for it the higher the price moves. As countries like Japan and online platforms like eBay and Amazon begin to allow payment for normal goods in bitcoin, the demand for available currency increases and the price rises – causing some to buy bitcoin for its investment, not trading value, and like gold just hold it, effectively decreasing the amount in circulation and push-

ing the value up even more.

The rising value of bitcoin generates a thriving financial ecosystem that obeys all of the rules of basic economic theory, while fundamentally discarding them at the same time.

Internet of money Google and search engine technology created an internet of information. Myspace, Facebook, and Twitter gave us an internet of relationships. What this technology has created is essentially an internet of money.

But 2017 has been a crazy year…

As we moved into 2017, the price of bitcoin was hovering around the $1,000 mark. In March 2017, the value of bitcoin passed the price of gold for the first time in its history, and was celebrated as a major coup… and, bitcoin kept going up and up. In August 2017, there was a split in the bitcoin community and the price dropped for a time… then kept going up and up.

In September 2017, there were some regulatory disturbances out of China (the biggest Bitcoin market) and the price dropped for a time….. then bitcoin kept going up and up. In one month from mid-September to mid-October 2017, the value increased from $3,600 peaking at around $6,000.

There are few other legitimate investments in the world that could match this growth.

This growth has not been limited to bitcoin alone, the other major

sight… these and other areas are all experiencing disruption due to digital innovation.

When society changes, one of the first things that gives us an indication that the disruption is going to endure is if it is accompanied by a change to the way we transfer value between parties, which is the fundamental driver behind how we manage our businesses. We have moved from barter to coins, coins to paper, paper to plastic, and now we are moving from plastic to digital. What we are seeing is the financial foundation being put in place to drive the Fourth Industrial Revolution.

What this means for business is that we need to look at the changes as the leading indicators of a permanent change to the way we make money, share or transact value, and by extension how we manage our organisation's finances. cryptocurrencies ether, ripple, and litecoin have all experienced similar stratospheric rates of growth through 2017.

Business and cryptocurrencies In this context of rapid, almost rabid, growth and development, what does it mean for business and for those of us who are charged with the care, management, and oversight of organisational finances?

The first thing is to see these currencies within the broader social change driven by digital disrup-

tion. While these currencies may be the most high-profile digital disruptions to the financial ecosystem, they are not alone. There are whole areas of development under the FinTech (transactional and investment activity), InsurTech (risk management and insurance), and RegTech (governance, legal, and other compliance activity) banners.

Payments, loans, start-up financing, short-term insurance, underwriting, financial advice, mobile money and eWallets, contracts, governance and over-

Savvy CFOs and other finance professionals will see the writing on the wall and know that this isn’t a blip in “Business as Usual” that needs to endured and ridden out. This is the vanguard of a whole new way of doing business.

Savvy CFOs will begin to ask how we need to change to be competitive in this new world. Redundant CFOs are looking at this and waiting for the dust to settle before they do anything.

Your call – will you be savvy or redundant? l

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DISRUPTION Ngubane & Co audit manager Sihle Ndzimbomvu reveals her struggles and triumphs

DREAM BIG, CHANGE YOUR LIFE “As a child in a rural area, walking along dusty roads, I could never imagine I’d be standing at the Finance Indaba, telling not only my story but the story of any black child. Looking back, I don’t regret the path I had to take to get where I am today. This is the story of how you can change your life by dreaming big.” By Georgina Guedes

T

he support of small black-owned accounting firms made it possible for a young woman from rural KwaZulu-Natal to achieve her dream of becoming a CA, said Sihle Ndzimbomvu, audit manager at Ngubane & Co, speaking at Finance Indaba Africa 2017.

“It is not only the story of my childhood but also the story of every black woman who is breaking barriers,” she said. “Women or men can relate to this story because, although we come from different places, we have faced similar challenges.”

Sihle grew up in a village called Rauka near Umzimkhulu in rural KwaZulu-Natal, and started her education in the local schools.

“Growing up there was not easy at all, because it is a rural area and we faced a lot of challenges.

I walked about five kilometres to school. I walked that dis-

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tance every day from when I was five until I was 13, just to get an education.”

She covered the distance on an empty stomach, which made it even harder for her to listen and absorb her lessons, desperate to go home and tell someone she learnt something at school that day. And even though she was committed to doing her homework, after her long walk home, she had chores that took her until late at night before she could focus on her studies.

home language and now she had to adapt to the terminology in English. Things were far more fast paced than she was used to and she struggled to keep up in a class of 30 – she’d previously been in a class of more than 80.

“What I appreciated was that I was able to access information.

There were libraries where I could gain more understanding of the careers I could follow with the subjects I had chosen. And lucky for me I could go to career expos and learn about different careers.”

Lack of information

Matric blazer

Although she knew she wanted to do something with her education, she was also held back by a lack of information about the career paths she could follow. Initially she dreamt of becoming a pilot or a captain of a ship, but when she came across the description of a CA in an English literature book, she realised she had found her calling. “These are some of the challenges that black children who want to achieve big are going to face,” Sihle said.

She was selected as one of three children from her school to go to the Gordon Institute of Business Science (GIBS), where she felt ashamed that people couldn’t identify her as a matric student because she didn’t have a dedicated matric blazer. She also heard the questions that children from the other schools asked that she could never have thought of – making her wonder if she was getting enough to succeed at her school.

“But the biggest challenge was that our parents believed that the only way for a girl to get security, wealth and freedom was to get married. They asked, ‘When are you going to get married?’ but because I had bigger dreams, I chose the other direction.”

When Sihle was approaching high school, her parents moved to Johannesburg. “I felt this was a good idea because maybe my circumstances would change. I believed everything happened for the best in Johannesburg.”

But there were more challenges for her to face. She was accustomed to receiving lessons in her

Despite all her setbacks, she was able to complete matric and go to university. As the first child in her family to attend a tertiary institution, there was no one at home to guide her, and she had to find her own way.

Sihle completed her degree, albeit not without financial difficulty for her family. On her graduation day, her father said something to her that will stay with her forever: “You know what, when I was working for the Joburg Municipality, cleaning outside the university, I never thought that one day I would come inside and watch my child walking down there wearing her gown and getting her certificate". Sihle says: "It

resonates with me to this day. It makes me want to achieve more.”

Breadwinner To her great surprise, Sihle did not find a job easily after graduation, so she applied for a workplace readiness programme and then for a traineeship. She failed her CTA four times before finally passing because she had to prioritise the demands of her clients to keep her job and continue to play a breadwinning role in her family.

“You realise that as a breadwinner, if you focus on your studies, you might forget about work and lose the job that means you are able to do things with your life.”

After a great deal of hard work – during which time she was also trying to further her studies – she found a job at Ngubane & Co. “For me, when I joined this firm, I realised that there is a contribution that black firms make for young people that still want to pursue their careers. They try to create this platform where we can still try to achieve the dreams that we had as children."

Sihle says Ngubane & Co provided academic support so that she could balance work and studies, and work towards her dream of being a chartered accountant. Sihle is about to write her CPA exam.

“Having failed my CTA four times, I am about to realise my dream of becoming a CA – a dream I’ve had since I was at primary school.”

Her final message for the rapt audience was to support black firms.

“To people who have the power to assist these small or medium firms, invest more! You are not just supporting the partners of those firms, you are changing the lives of children who never believed they could walk down that path.” l

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DO THE RIGHT THING

How Nazrien Kader turned Deloitte’s Tax & Legal Services into a big success

Unity above everything Under Nazrien Kader’s leadership, Deloitte’s Tax & Legal Services have turned into a success story that is realising sustainable, growing profits. “Passion is contagious,” she says. “My team has a unity that I value above everything else. By Ebrahim Moolla

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ow a 23-year Deloitte veteran, Nazrien Kader never yearned for a career as a chartered accountant or in financial services when she was growing up.

serving her articles, she stayed on as audit manager at Arthur Andersen, but after responding to an advertisement she became the first female hired by Deloitte in the tax business in Durban.

Nazrien shelved her ambition of moving overseas, quickly moved up through the ranks and became a partner in 2001 – assuming her current role five years ago.

“I wanted to be a freelance journalist covering war and its impact on children,” says Nazrien, managing partner of Tax & Legal Services at Deloitte in Africa, representing 15 anglophone countries. “After one conversation with my father, who reminded me of the ‘other side’ and that I would not be able to sleep alone at night without the lights on, I abandoned the idea,” she says.

Earning stripes

Unsure of her next move after

“I was terrified,” Nazrien admits.

“My predecessor went on leave

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She says that taking over the portfolio from the long-serving Dave Kennedy and making the transition from partner in Tax & Legal to managing partner was a daunting prospect.

a month after the announcement of my new role and I spent the entire December holidays and the next six months trawling through the financials to get up to speed with the wider business. There was a lot of straight-talking and anxiety, as I wasn’t really known to Deloitte’s Johannesburg partners and had to earn my stripes, so to speak.”

Earn her stripes Nazrien did, helping the business unit go from a loss-making unit to one that is realising sustainable, growing profits. No wonder she has since joined various executive tax teams of the firm on both an EMEA and global level.

“Passion is contagious,” she says, ascribing her success to visionary leadership and a working

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environment built on trust. “My team has a unity that I value above everything else. Deloitte’s Tax & Legal brand has been around for over two decades.

We have always had a strong mix of accountants and lawyers who are able to advise and implement our advice, which is a strong differentiator for our business.”

This is a difficult time for the financial services sector, with various scandals sending shockwaves through the community.

Nazrien cautions people not to jump to conclusions.

“The nervousness and anxiety isn’t limited to a single firm – we all feel it,” she says. “As accountants, we are the standard-bearers for ethics across all sectors. We all know what we signed up for. I only hope we can bed it down quickly. We feel the pain and understand the hoops through which the firms are having to jump and it is not nice.

We are supposedly innocent until proven guilty, but the situation has been exacerbated by South Africa’s economic reality and allegations of state capture,” she says, adding that it is an

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“absolute travesty” that innocent professionals are being “tainted”.

Transformation As part of a ‘groundbreaking’ generation of black chartered accountants, transformation has always been close to her heart.

“I studied at the University of Durban-Westville from 19881992, a ‘black’ university which at the time was at the forefront of transformation and the crux of the ‘revolution’. One couldn’t help but be touched by the struggle.”

Once qualified as a chartered accountant, Nazrien immersed herself thoroughly into the profession’s formal accounting structures, eventually serving on the executive of both the Association for the Advancement of Black Accountants of Southern Africa (ABASA) and the South African Institute of Chartered Accountants (SAICA).

“Transformation was not a choice. It was an imperative for us – we were actually the transformative generation coming through the ranks. One couldn’t sit on the sidelines.”

Today, Nazrien is in the happy

Nazrien’s career tip “Rely on faith, hope and prayer, and lots of hard work. A successful career is not an entitlement – you’ve got to earn it.”

position of working with a transformed team at Deloitte with significant female representation. But she believes there is still lots more to do. She focuses on absolute skills and the principle of “fairness above all” and has a special interest in black talent, because tax specialists of colour tend to be “lapped up into the economy”.

A mother to two teenage sons, the effervescent executive has a refreshing take on achieving the elusive work-life balance. “I don’t believe in balance, but in tradeoffs. My work and personal lives are integrated. My pillars of strength are my mother and my husband, a former management consultant at PwC. I miss dinners and other events regularly, but my family understands that I am who I am because of the enjoyment I take in my work and my life. I’m there when it matters most, I hope.” l

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DO THE RIGHT THING

Nkonki’s Emma Mashilwane leads crucial discussion at Finance Indaba Africa

Let finance light the way on ethics Can ethics be audited? That was the pivotal question of an incredibly well-received panel discussion at Finance Indaba Africa 2017, led by Nkonki’s risk advisory boss Emma Mashilwane. By Kate Ferreira

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Is it really common practice that CFOs are ethical?” The question came from Emma Mashilwane, Head of Risk Advisory Services at auditing and advisory firm Nkonki. On the first day of Finance Indaba Africa 2017, she gathered a group of top experts to discuss the role of finance as a custodian of ethics and governance. How can a CFO balance ethical and governance controls with the need to not be perceived as “stifling business”, she asked.

The experts on the panel included Natasha Camhee, CEO of Arenkwe Governance Services, and two CFOs: Ntombi Mothibeli of Hosmed Medical Scheme and Dineo Molefe of T-Systems

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South Africa. Emma challenged the panel with a direct and controversial question right from the beginning of the discussion, which proved to be a theme running through the session – and in many ways through Emma’s own career path: “Can ethics be audited?”

Emma’s career path has taken her from articles at KPMG, to the defence industry, a BEE company, back into KPMG, and eventually saw her headhunted to spearhead the revitalisation and growth of the internal audit portfolio at Nkonki. Under her watch over the last six years, the portfolio didn’t only grow significantly in revenue but also in headcount and intellectual capital.

To do this, Emma has focused on a broad skill set and complex approach to internal audit. The team now includes such diverse professionals as engineers, quantity surveyors, and specialists in areas such as SHEQ, revenue assurance and capital projects assurance, as well as the CA, CIA, CISA and CFE skills. As Nkonki can now provide better of depth of insight and assurance, the firm’s evolution neatly matches the transformation of the typical CFO role from beancounter to business partner.

Connecting the dots This broad and complex nature of the role also emerged strongly in the Finance Indaba panel discussion. The two CFOs on the panel described how they see

and that CFOs should lead in that regard.

Ntombi was quick to concur, adding “that ethics are embedded in everything we do. “If you look at the principles of procurement for example, ethical behaviours are built in. They are so fundamental, so second-nature,” she said, “that they become part of everything you do.”

Do the right thing “As a CFO, you don’t get to see every transaction in a company, or sit in on every session where critical decisions are made,” Emma said. “But through the delegation of authority, you are entrusting management to do the right thing. You can’t keep looking over shoulders.” This is easier said than done. “You don’t want to delegate authority but disempower people by constantly checking up on them. I see that with my clients. That is the challenge the CFOs and board members face.”

their role as “connecting the dots” across their organisations, and the breadth of functions and departments that fall under their watchful eye, including legal, procurement, strategy and HR. As Natasha explained, ethics is

the right thing to do while governance is concerned with what you have the right to do. She argues that considering the ethics and governance of our actions is now unavoidable for CFOs, adding that ethics should be the “business” of the whole business,

Dineo then replied without mincing her words: “As finance people, we take it for granted that we operate in an ethical sphere, that all financial professionals just do the right thing. That we do the basics like making sure there is budget, a contract, that the price is market-related. Today, I call them the basics, but we see so many instances of misapplication that for many I fear these are not so basic.”

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That is why Dineo believes it is important for finance to make sure the rest of the business is aligned. “When the business is under pressure, people might want to take shortcuts. As the CFO, I need to know what is in place before I sign that paper.

A CFO’s core responsibility is to lead from the front and lead by example. If I am on an exco, and I see my colleagues not thinking like me about issues of ethics and governance, I must keep reminding them of our obligations to do so.”

Risk register Emma pointed out that this will be even more crucial with the expectation for CFOs to report any instances of noncompliance with laws and regulations as per the requirements of the NOCLAR standard (Non-Compliance with Laws and Regulations) issued by the International Ethics Standards Board for Accountants.

“Delay doesn’t mean denial,” Natasha added. “You as the CFO must push the team to follow all the processes, and you have a challenge to frame the conversation in that way.”

Given these points, argued Emma, aren’t ethics something that might make for an important section in a risk register?

And if we conceded that, surely then we are saying that risk (and with that ethics) can indeed be audited?

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“We need to be the torch bearers of ethics within the organisations we lead.” – Emma Mashilwane, Nkonki

The end of the discussion brought the original question back on stage: can ethics be audited? The panel broadly agreed with Ntombi, who argued that this can be achieved through the use of solid internal audit application, and ensuring that there is an effective combined assurance model to enable discussion of issues of ethics among

all assurance providers. “Embed ethics right into the performance objectives and cascade it up,” said Ntombi.

As CFOs and as finance professionals, we must be ethical even when nobody is watching, summated Emma. “We need to be the torch bearers of ethics within the organisations we lead.” l

DO THE RIGHT THING

Diamond sponsor Standard Bank amazes Finance Indaba with incubator, Feenix and ‘The offering’

Funding South Africa’s future Innovation took centre stage during four stunning sessions by diamond sponsor Standard Bank at Finance Indaba Africa 2017.

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tandard Bank is putting their money where their heart is, with the launch and growth of two ‘public good’ programmes: the Standard Bank Incubator and Feenix. Head of the Incubator, Jayshree Naidoo, showcased the work of these projects during several Finance Indaba sessions, while some of her colleagues discussed the revolution that a new entrepreneurial banking model for now labelled ‘The Offering’ is causing.

“This might be a finance presentation at the Finance Indaba, but today I am not going to be giving you a lot of statistics and numbers.

I’m going to take you on a journey of how we’ve used innovation and innovative models to work for two

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initiatives,” said Jayshree during one of the Indaba's opening sessions, held in a room that could barely contain all the delegates that wanted to listen.

“Come into our world and experience what we experience every day,” was Jayshree’s invitation.

Her visual-heavy presentation delivered on this promise, featuring videos and testimonies of the entrepreneurs and student beneficiaries, all linked to the presentation theme – Innovative Models to Build a Better Future.

Incubator The incubator is now approaching its third year of operation and has helped develop several successful businesses with young local entrepreneurs – including

fashion house Burgundy Fly and coffee shop-in-a-container concept Roast Republic.

The focus on people-over-function is core to the approach of the incubator, which provides incubation and mentoring services to both independent entrepreneurs and Standard Bank employees. “We know that individuals are more than what they do in their day-to-day jobs,” said Jayshree.

It is an intentional move away from the “stuffy” or “corporate” approach to entrepreneurship so often taken by traditional big banks, she explained. This refreshing attitude even extends to the design of the incubator spaces, which are bright and

colourful and use moveable furniture to lend themselves to collaboration and co-working.

“Designed by entrepreneurs for entrepreneurs,” said Jayshree.

Rosebank The main incubator space is in Rosebank, Johannesburg, and has an open-door policy. They’re also piloting an in-branch co-working space on a whole floor of the Hatfield, Pretoria branch. After this proof-of-concept phase, this will be rolled out to other branches across the country.

Promoting market access and unlocking funding are big drivers for the incubator, which hosts demo days and showcases that bring the incubator businesses into direct engagement with the bank’s corporate clients, in addition to the training they provide.

“It’s theory matched with networking,” said Jayshree – all with a view to creating employment.

“It’s putting entrepreneurship at the centre of what we do.”

To date, the 50 entrepreneurs who have come through the incubator have created an additional 136 new jobs (over and above the core staff of the incubated company itself). They’ve also helped startups access millions in seed and development funding, directly

and through competitions. Local employment-focused startup iDWork even took home the top title at the Seedstars World event in Switzerland in 2016, netting themselves a further $500,000 in funding.

Behind all the negativity, violence and hurt is a deep-rooted need and that is what innovation is about, Jayshree said. She believes that innovation is about solving challenges, otherwise all you’re doing is coming up with ideas.

Feenix

Amazing platform

Standard Bank’s Feenix programme is the other initiative harnessing innovation for the greater good by crowdfunding to pay tertiary fees for needy students. The platform lets qualified students create a profile for themselves and list their financial needs. Standard Bank then facilitates the donation process directly with the university in question.

To date, the fund has raised over R2 million, with almost R600,000 of that coming directly from Standard Bank employees.

Feenix is about solving the funding problems for students. An enthusiastic Jayshree calls it “an amazing platform” and says it shows what a phenomenal knack South Africans have for pulling resources and efforts together when there is a need. “We tried to make it as easy as possible for corporates to use everything from their socio-economic development spend and CSI budget to address this crisis,” she said.

“I didn’t have the financial means to study when I finished school,” Jayshree said. “I assumed my dad would be able to unlock a bursary at his company as he did for my siblings.” However, her siblings hadn’t completed their studies, which meant she had no access to a bursary and was forced to work and study simultaneously.

Jayshree spoke openly about the challenges South Africa’s youth face in getting access to funding for their education.

Of South Africa’s tertiary students, 94 percent need financial assistance. Government funds are only able to assist 17 percent. The Feenix platform, however, might be able to help the rest. To date, Feenix has helped 31 students. On the platform, students can motivate for funding on their own terms. They upload a profile and their fees account, which allows funders to connect with them.

You, as the funder, have a choice to pay a portion of, or all of, the student’s fees, though you may also choose to pay into the Feenix

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pool fund, which is recorded with B-BBEE social-economic development criteria.

The offering Another exciting presentation during the Finance Indaba dealt with the entrepreneurial banking model with which the bank is experimenting.

According to Standard Bank’s Angé Baard, Paton Raman, and Gugu Sithole, who presented the idea to intrigued accountants and entrepreneurs, it is built on the concept of co-creation. The team is so focused on flipping the usual path of product development that they haven’t even named this service yet, calling themselves simply “the offering” or “the proposition”.

“Our way of working is premised on this quote from Malcolm Gladwell,” explained Angé: “If everyone had to think out of the box, maybe it was the box that needed fixing.” So, they’ve adopted “design thinking” and “lean innovation” methods, with a focus on iterative design and fast prototyping to completely rework how their entrepreneur customers bank.

Eighty percent of their small but growing customer base is new to Standard Bank. “We are a unique

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proposition from within Standard Bank. You can think of us as a FinTech startup from within the bank,” said Gugu.

“We believe that South Africa’s future economic success will be driven by entrepreneurs,” said Angé. “We’ve been around for about 18 months and have been working with customers, live customers, from day one.”

Beta users They also know that the most important relationship for many entrepreneurs is the one they have with their accountants. The offering sees themselves as the third corner of that triangle, and they work directly to incorporate entrepreneur and accountant feedback into every aspect of their proposition – down to the name and branding, which is still being discussed by their new and Beta users.

The team was initially based in Cape Town exclusively – an intentional move to keep them away from the pressures and influence of “the mothership”, Paton explained – and has since expanded to Johannesburg. Their mission is “to serve entrepreneurs and their accountants through a disruptive, tailored engagement model that focuses

on their needs and lifestyle; in a way that makes them feel that we are on the same side.”

This involves placing the customer-facing people of the team at the centre of the model. They get the “pain points” and feedback from customers, pull in other team members to solve them, and then this solution is disseminated through the model to all clients.

The offering doesn’t place many hard limits on their understanding of “entrepreneur” – happy to work with startups and business people along the experience curve. Their only requirement is that you come to them with – or allow them to connect you to – an accountant.

Core elements of the proposition include one point of contact with the bank for all your accounts (business and personal); roundthe-clock availability; prepopulated forms (to cut down on paperwork required from the customer); and a single repository for all relevant documents. And when they say 24/7 contact, they mean it: “We get Whatsapp messages from clients at 3am, and we respond,” said Gugu.

They are also happy to engage with customers over a broad range of communication channels, like Skype, email, voice notes and Whatsapp. l

BOOST YOUR CAREER, COMPANY AND KNOWLEDGE IN 2018 Are you open to networking, sharing and learning? Do you have an active and ‘can do’ approach? Are you ambitious and willing to grow? Do you work as a finance executive at a top tier company or are you an advisor or supplier working with executive boards? If you answered ‘yes’ to any of the questions above then the CFO South Africa membership is a perfect fit for you.

Contact Sarah Chalmers on schalmers@cfo.co.za

2018 EVENTS TO DIARISE 8 Feb - CFO Dinner (Invite only) - JHB 13 Feb - CFO Summit #1 - JHB 22 Feb - CFO Dinner (Invite only) - JHB 14 Mar - CFO Dinner (Invite only) - CT 15 Mar - CFO Summit #2 - CT 27 Mar - CFO Dinner (Invite only) - JHB 3 Apr - CFO Summit - KEN 10 Apr - CFO Dinner (Invite only) - JHB 10 May - CFO Awards - JHB 7 Jun - CFO Dinner (Invite only) - JHB 5 Jul - CFO Dinner (Invite only) - DBN

19 Jul - CFO Day - DBN 1 Aug - CFO Women’s Dinner - JHB 2 Aug - CHRO & CFO EA Breakfast - JHB 21 Aug - CFO Dinner (Invite only) - KEN 23 Aug - CFO Dinner (Invite only) - KEN 4 Sep - CFO Dinner (Invite only) - JHB 5 Sep - CFO Awards Judges Dinner - JHB 6, 7 & 8 Sep - CFO Journey 3 & 4 Oct - Finance Indaba Africa - JHB 25 Oct - CFO Dinner (Invite only) - JHB 8 Nov CFO Summit #3 - JHB

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