MAG AZINE FOR FINANCE PROFESSIONALS IN SOUTH AFRICA

1 2017 CFO.CO.ZA

N26s Valentin Stalf

How to build a bank
from scratch

Diary of a CFO
Narriman Taliep Christiaan Engelbrechts
CFO V&A Waterfront first days at Ster-Kinekor
IT savvy and boardroom skills
Finance Indaba Africa 2017
Sean Berrington 12 and 13 October
CFO Group IT Standard Bank Sandton Convention Centre
Billion dollar finance boss

Johan Geel
CFO AFGRI
Understanding
Africa

DUE
DILIGENCE!
Experts + CFOs
Sibanye and Telkom
talk deals and donts

Adventures of the new

Silindile Kubheka
National Treasury CFO
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 12 & 13 October 2017

Sandton Convention Centre

Finance Indaba Africa is the biggest annual expo and into a wealth of resources, knowhow and inspiration.
conference for finance professionals. It brings together Gain unparalleled insights. Cut costs dramatically, send
peers, technology suppliers, platforms, banks, tools, sales & productivity through the roof and boost your
specialists, CFOs and thought leaders. 5 000 visitors tap companys profits.

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Visit www.finance-indaba.co.za to ensure your exhibition space and reach more
than 5 000 finance professionals, CFOs and FDs.
 BRING YOUR TEAM

Finance Indaba: CFOs

best talent strategy
Which CFO would say no to a finance team that is rejuvenated, full of new ideas and
better connected than ever before - for FREE?

F
inance Indaba Africa is
the only annual event
on the continent where
thousands of regis-
tered accountants
and other finance profession-
als gather under roof for two
days to advance their knowl-
edge, networks and careers. CAs
and members of other profes-
sional bodies also qualify for up
to 14 CPD hours, but that is small
change compared to the massive
boost the event gives to the work
finance teams produce.
At a time when CFOs face huge
volatility and change, one of the
most critical things to consider
is how your talent strategy and
the insights youre offering your
in positive coverage in all South
Africas major newspapers, radio
CFOs would be crazy
and television. The momentum is not to send their
such that CFO South Africa has
secured the Sandton Convention teams to Finance
Centre until 2020, in order to be
able to plan for bigger and better
Indaba Africa 2017.
events each year.
Feedback received last year was
that, for accountants and finance
teams, the plethora of unpar-
alleled insights into finances
service providers and thought
leaders was at times overwhelm-
ing and always exhilarating.
Attendants praised the network-
ing opportunities, the high quality
of speakers, with special mention
of the thought-provoking con-
tributions by the legendary Prof Vusi Thembekwayo

team will help your business Mervyn King and entrepreneurial

survive, says Graham Fehrsen,
MD of CFO South Africa, which
organises the annual finance
extravaganza. Given the incred-
ible range of opportunities to
learn among peers and industry
leaders, CFOs would be crazy not
to send their teams to Finance
Indaba Africa 2017.
With nearly 5,000 visitors, more
than 100 learning sessions and
around 70 exhibitors and part-
ners, the inaugural Finance
Indaba Africa in October 2016 was
an enormous success - resulting
whirlwind Vusi Thembekwayo.
Planning for the 2017 event
on 12 and 13 October is well
underway, with a number of
top quality speakers soon to be
revealed, alongside a string of
partners and exhibitors that will
be announced over the course of
the next few months. Standard
Bank will once again feature as
diamond partner at the Finance
Indaba Africa, while other con-
firmed exhibitors include CIMA,
ACCA, Purple Group, AdvanceNet,
4Most, 360T and This Is Me. l
5 things you
need to know
1. 12 & 13 October 2017 at
the Sandton Convention
Centre
2. Free of charge for finance
professionals
3. Twitter hashtag #findaba17
4. Finance-indaba.co.za
to exhibit or register
5. Email Sarah Chalmers at
schalmers@cfo.co.za for
team registrations

CFO MAGAZINE CFO.CO.ZA 5

TABLE OF CONTENTS

Due diligence Sean Berrington

Big deal! A thorough, smart and Since mid-2016, Sean Berrington
stealthy due diligence process is the finance boss of a billion
is among the top ingredients for dollar IT organisation. Add to this
successful mergers and acquisi- his intimate experience with agile
tions. We speak to dealmakers and ways of working, and the CFO for
finance executives from Sibanye Group IT at Standard Bank might
Gold and Telkom about the home- just be the ideal person to talk to
work a growth-hungry company about the crossroads of threats and
needs to do. How should the CFO opportunities that technology and
get involved? What does blockchain finance bring to banks and finance
have to do with it? professionals.

37
Silindile Kubheka
Can you please give me the oppor-
tunity to finish what I was saying?
A stunned splattering of men gasp,
nod sheepishly and murmur of
course. The very moment she asks

22
for silence and respect from this
room full of high-powered males
is the making of the new Silindile
Kubheka, National Treasury CFO.
50

CFO South Africa is the organisation for finance MANAGING DIRECTOR SENIOR EDITORS Coats, Sungula
executives in South Africa. Our goal is to connect Graham Fehrsen Toni Muir Nkabinde, Tiisetso
finance professionals online and off in order to share gfehrsen@cfo.co.za tmuir@cfo.co.za Tlelima
knowledge, exchange interests and open up business +27 (0)79 898 0227 +27 (0)82 908 8687
opportunities. PRINTING
HEAD OF OPERATIONS Ebrahim Moolla Novus Holdings
CFO South Africa Johannesburg Sarah Chalmers emoolla@cfo.co.za coenraad.pretorius@
CFO Enterprises PTY ltd South Africa schalmers@cfo.co.za +27 (0)79 506 4840 novus.holdings
33 Impala Road +27 (0)11 083 7515 +27 (0)82 570 9482 +27 (0)11 201 3460
Chislehurston 2196 CFO.co.za DESIGN
MARKETING MANAGER Cor Lesterhuis
2017 CFO Enterprises PTY ltd. All rights reserved. No Judith Kamffer
part of this publication may be reproduced, distributed, jkamffer@cfo.co.za PHOTOGRAPHY
or transmitted in any form or by any means, including +27 (0)82 859 1245 Patrick Furter
photocopying, recording, or other electronic or mechan-
ical methods, without the prior written permission of the EDITOR IN CHIEF OTHER
publisher, except in the case of brief quotations embod- Jol Roerig CONTRIBUTORS
ied in critical reviews and certain other non-commercial jroerig@cfo.co.za Christiaan Engelbrecht,
uses permitted by copyright law. +27 (0)76 371 2856 Kate Ferreira, Keith

6 CFO MAGAZINE CFO.CO.ZA

 TABLE OF CONTENTS

Due diligence
23 Subtle and stealthy: Charl Keyter,
CFO Sibanye Gold
26 Understand what you buy:
Karin Hodson, Deloitte
28 Planning ensures success: Arie Maree,
ansarada
30 Hidden gems: Andrew Balnaves,
Standard Bank
32 CFO as connector: Charles Douglas,
Bowmans
34 Use your best people: Deon Fredericks,

13 46 CFO Telkom

Public sector
44 Public sector February event

56
46 Ayanda Mafuleka, CFO NCR: walk the talk

Banking
54 Adapt or die: futurist Keith Coats
56 Building a bank from scratch:
Valentin Stalf, N26
62 Six questions for Nico Botha,
CFO Citibank SA

Technology
64 IT savvy: Narriman Taliep,
CFO V&A Waterfront
67 Cybercrime: CFO Summit February
70 Bricks and bytes: Jason Wright,
CFO Cape Union Mart

Growth
74 CHRO South Africa launched
76 Diary of a CFO: Christiaan Engelbrecht
joins Ster-Kinekor
79 Understanding Africa: Johan Geel,
CFO AFGRI

And further
5 Finance Indaba Africa: bring your team
8 From the Editor in Chief: banking
on change
10 From the MD: stay curious
12 CFO Awards 2017: finance celebration

64 79 13 Deon Viljoen joins Discovery

16 On the move: new CFO appointments
83 Calendar CFO South Africa events 2017

CFO MAGAZINE CFO.CO.ZA 7

FROM THE EDITOR IN CHIEF
Banking on
change
W
hen we spoke to AFGRI CFO
Johan Geel about work-
ing smartly in the rest of
Africa (page 79), the agricul-
ture business had not yet
announced its acquisition of the South
African portion of Bank of Athens and
with that a banking licence. When insur-
ance giant Discovery headhunted CFO of
the Year 2015 Deon Viljoen from Alexander
Forbes (page 13), they did so because he is
a great finance executive but also because
he has intimate knowledge of a process
that he will be leading - securing a bank-
ing licence.
Relationships, trust and knowing what
to do with a whole heap of data are the
factors determining success and sustain-
ability of businesses today. Business plans
and industry boundaries matter much
less, something venture capitalists have
known for a while and something share-
holders cannot discover fast enough. So
why not start a bank?
Money is not the problem if you have the
right team that executes well, says Valentin
Stalf, another person who started a bank
(page 56), German banking sensation N26.
One of the highlights of this magazine is
the way Sean Berrington, CFO Group IT
at Standard Bank, explores the ways agil-
ity and change are coming to town at a
bank with a head start and a legacy of over
a century (page 50). Citibanks Nico Botha
talks about change after the financial crisis
and reveals what he has learnt by chang-
ing lanes from Johannesburg to London and
back (page 62).
A recurring theme in these articles is
the way technology has become a com-
8 CFO MAGAZINE CFO.CO.ZA
petitive advantage, rather than a tool or
liability. We also talk about this with two
Capetonian CFOs, Narriman Taliep of V&A
Waterfront (page 64) and Jason Wright of
Cape Union Mart (page 70), who are both
transforming their businesses rapidly.
With cybercriminals specifically target-
ing finance teams, it might also be wise to
take heed of the tips from ethical hacker
Sean Howell (page 67) to prevent disaster.
A technological innovation that is impact-
ing many CFOs is the virtual deal room,
which is abling smoother, faster and more
accurate mergers and acquisitions, some-
thing ansarada's MD Arie Maree talks
about on page 28. That interview is part
of a series that starts on page 20, in which
our senior editor Toni Muir looks into the
due diligence process with a group of emi-
nent experts and the CFOs of Sibanye Gold
(page 23) and Telkom (page 34), who know
more about due diligence than most of the
readers of this magazine will ever do.
Just as for businesses, there is no better
way to grow as a person and a profes-
sional than by banking on change. That
is evident from the diary Christiaan
Engelbrecht kept during his first 90 days as
Ster-Kinekor CFO (page 76), from Ayanda
Mafulekas drive to get a clean audit for
the National Credit Regulator (page 46)
and from our cover story with National
Treasury CFO Silindile Kubheka (page 37).
Her love for travel, literature and contin-
uous improvement reveals a curious and
nimble mind, the kind that defines the
best finance leaders.
Jol Roerig
jroerig@cfo.co.za
+27 (0)76 3712856
 BLE FO
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FROM THE MD
Stay curious
to be relevant
in 2020
I
was recently reminded that artificial
intelligence (AI) already has the abil-
ity to read, write, present and take on
a physical presence, all with alarm-
ing intelligent and coherent patterns.
By 2020, I imagine, a bot might write this
piece, moderate a panel at a CFO Summit
and deliver outstanding insights to you,
the finance professional, across multi-
ple platforms. If this bot can build trusted
relationships with people and creatively
collaborate, I am definitely out of a job.
And so are you.
Accelerate and simplify
While this scenario seems unlikely for
now, remaining relevant in your daily work
is becoming increasingly difficult, given
what technology is doing to accelerate and
simplify everyday work.
Finance executives have certainly felt
this acceleration. Technology has helped
finance teams to be far more of a busi-
ness partner than ever before and has also
made finance more accessible to other pro-
fessions and divisions across the business.
There is also real movement towards AI
finance solutions. In 2016 a startup called
SMACC launched a self learning account-
ing system for SMEs. Not long ago, global
player Deloitte announced a partnership
with Canadian AI platform Kira Systems to
drive its offering into the future.
Magic ingredient
The relevance in your role is to some extent
10 CFO MAGAZINE CFO.CO.ZA
about about keeping up with technol-
ogy itself, but I think it will be much more
about how you engage with and use the
technology. There is little choice but to be
committed to the speed of change around
you, but the one quality that I am banking
on for my personal relevance is curiosity.
Curiosity, I think, is the magic ingredient to
help all of us tackle the rapidly changing
and increasingly technological orientation
of our businesses and jobs.
To support you in facing this immense chal-
lenge, CFO South Africa is hosting a unique
CFO Summit series for finance leaders. We
are extending this learning and discussion
through our digital platforms, this magazine
and the Finance Indaba Africa, for thou-
sands of finance professionals. And we will
again shine a light on success and excel-
lence at the CFO Awards on 11 May.
Our purpose remains to deliver finance
professionals learning, network and career
opportunities and insights. We look for-
ward to offering the finance community
the finest learning and insights possible
and welcome your participation and feed-
back. We hope 2017 is an exceptional year
for you and your curiosity.
Graham Fehrsen
gfehrsen@cfo.co.za
+27 (0)79 8980227
 Visit the CFO Awards Summer Place Hyde Park on May 11th 2017.
Dumisani Dlamini (CFO National Arts Council of SA) receives the 2016 Public Sector CFO of the Year Award from KPMG Partner Edson Magondo

CFO of Public CFO Young CFO Strategy Transformation &

the Year of the Year of the Year Execution Empowerment

High
Compliance Finance Moving into Finance
Performance
& Governance & Technology Africa Transformation
Team

Meet 300 CFOs, share knowledge and boost business

On 11th May 2017 the annual CFO Awards will be held at
the beautiful Summer Place in Johannesburg. This pres-
tigious event recognises CFOs of listed companies, large
corporations, parastatals and government institutions and
awards them for outstanding performance and leadership.
CFO South Africa invites you to buy a table at the CFO Awards,
attend the CFO Conference, join the panel of judges and be-
come our partner. Seats are limited, so book now to avoid
disappointment. For more information visit CFOAwards.co.za
or contact Graham Fehrsen at gfehrsen@cfo.co.za.

Visit CFOAwards.co.za
CFO AWARDS

Nominations for CFO Awards 2018 now open

Nominees CFO
Awards 2017

The ultimate This year, 26 CFOs have been

shortlisted as nominees for the
CFO Awards. If your favourite

celebration
finance executive is missing,
please nominate her or him for
the longlist of the CFO Awards
2018 by sending an email to

of finance
Sarah Chalmers at schalmers@
cfo.co.za. Visit CFOAwards.
co.za for more information.

Charl Keyter Sibanye Gold

Chris Patricios Primedia
Debbie Ransby Takeda
Pharmaceuticals
Elton Bosch Clover
Garry Pita Transnet
Imraan Soomra Oceana
Group
Innocentia Pule National
Empowerment Fund
Johan Geel AFGRI
Mark Godfrey Spar
Lucas Verwey Distell
Lushen Pather Sasfin
Mary Vilakazi MMI Holdings
Nichola Dewar PostBank
The best of finance gather at the CFO Awards: a photo from 2016, with four CA siblings and
South Africas first black CA and his wife . From left to right: Christine Mazzocco (Deloitte),
Nishant Saxena Cipla
Hazel Nkuhlu, Mark Kathan (CFO AECI), Prof Wiseman Nkuhlu, Christine Ramon (CFO Nishlan Samujh Investec
AngloGold Ashanti) and Veran Kathan (CFO Vodacom Business). Nopasika Lila Eskom
Pension and Provident Fund

W
Paul Marten Microsoft
ho are the best With a panel of judges con- Pieter de Wit Afrimat
finance executives sisting exclusively of business Rajesh Mahabeer SANParks
of the moment? leaders, accounting stalwarts Ramasela Ganda
Which CFO has and award-winning CFOs, votes Ekhurhuleni Metropolitan
been a catalyst for are based on thorough inter- Municipality
spectacular results, guided an views with the candidates and Reggie Boqo
organisation through testing a dossier that also includes per- City of Johannesburg
times or has made a crucial dif- formance indicators. New judges Robert Katz Peregine
ference in any other way? CFO on the panel this year are Prof Holdings Ltd
South Africa will again be cele- Wiseman Nkuhlu, Chancellor Till Streichert Vodacom
brating the crucial role of CFOs of the University of Pretoria, Umar Banda
and their finance teams at the and retired CFOs Simon Ridley City of Tshwane
annual CFO Awards on 11 May (Standard Bank) and Leon Wayne Koonin
2017. Meanwhile, nominations Crouse (Remgro), both of whom Omnia Holdings
for next years CFO Awards have received a Lifetime Achievement Yvonne Chetty
already opened. Award in 2016. l Department of Energy

12 CFO MAGAZINE CFO.CO.ZA

 MOVERS

CFO of the Year 2015 leaves Alexander Forbes in most notable CFO move of the year

Deon Viljoen joins

Discovery
CFO of the Year 2015 Deon Viljoen will be leaving Alexander Forbes to become the
new CFO of Discovery from 1 May 2017. The much-awaited appointment at one
of South Africas flagship financial services companies comes after outgoing CFO
Richard Farber stepped down to relocate to Australia.

D
eon is extremely pas-
sionate about the role
of the CFO and has been
a member of the panel
of judges for the CFO
Awards since 2016. He made a
name for himself when he guided
Alexander Forbes, the countrys
largest retirement fund adminis-
trator, through a delisting and a
relisting in a period of just seven
years. He often mentions find-
ing sustainable solutions that
accommodate all stakeholders
as his recipe for success.
Discovery took a long time to
appoint its new finance head,
partly due to the fact that Deon
was hesitant to respond to the
initial overtures from headhunt-
ers. The company was looking
for a CFO with experience at a
large listed entity, preferably
in the financial services sector,
in particular in insurance and
banking, given the retail banking
aspirations of the group, which
is best known for its health
insurance and Vitality brands.
During his tenure at PwC, Deon businesses. In the end, the oppor-
has been involved in banking tunity to help steer a company
license applications. like Discovery proved too tempt-
ing to dismiss.
In an internal memo to the staff,
Discovery CEO Adrian Gore men- Early last year, Deon was talked
tioned the company has to be about as one of the people in line
non-negotiable about securing to succeed Edward Kieswetter
the top person for every role to as Alexander Forbes CEO, after
realise our exciting expansion the latters surprise-resigna-
objectives. He specifically men- tion, but after acting as CEO for
tioned Deons stature as one of six months, Deon stepped back
the countrys best CFOs, having into his CFO role when finan-
been named CFO of the Year 2015. cial services veteran Andrew
Darfoor was appointed as execu-
Market cap tive boss in August. After Deons
Despite the opportunity to join departure, financial director at
a company with a ten times Alexander Forbes Group Services
larger market cap, Deon is under- Bruce Bydawell will take over as
stood to have struggled with the acting CFO.
decision to move, having previ-
ously declined many attractive During his tenure at Alexander
offers from other prominent Forbes, Deon worked with four
Discovery CEO Adrian Gore specifically mentioned
Deons stature as one of the countrys best CFOs,
having been named CFO of the Year 2015.

CFO MAGAZINE CFO.CO.ZA 13

MOVERS

different CEOs. Besides the the group. Before that, he was

delisting and listing, he also over-
hauled the entire structure of
the business and sold one of its
biggest businesses, Guardrisk,
to an international buyer. He
was rewarded with the presti-
gious CFO of the Year Award in
2015, the same year that barn-
storming Discovery Health
CFO Brett Tromp nabbed two
awards (Young CFO of the
Year Award and the High
Performance Team Award).
Deon worked for the
Alexander Forbes
Group since 2003,
first as finance direc-
tor of Investment Solutions
and since 2007 as CFO for
a partner and director at PwC
Johannesburg, focusing on
assurance and business advi-
sory services. He specialised
in banking and other financial
services clients, both in PwCs
Johannesburg and London offices.
Not shying away from broader
roles, Deon also served on indus-
try bodies such as the SAICA
Banking Industry Group. For
years, he also chaired SAICAs
Investment Management and
the Collective Investment
Schemes Industry Groups. Deon
studied at the Rand Afrikaans
University (now University of
Johannesburg) and qualified as a
CA in 1987. l

Recognising the best

Deon Viljoen is just one example of a CFO Awards winner whose career has skyrocketed.
What happened to other previous winners?

Anoj Singh won two CFO Awards in both 2014 and
2015 for his strategic and tranformative work at
Transnet. Despite the controversy around his CEO,
Brian Molefe, Anoj is widely credited for stabilising
Eskom since joining the utility as CFO.
Bongani Nqwababa, who won the Finance Trans-
formation Award 2015 for his CFO work at Anglo
American Platinum, is now CEO at Sasol.
Greg Davis, who won the Moving into Africa Award
in 2015 as Africa CFO of Standard Bank, is now the
Group CFO at Ecobank Transnational.
Cobus Grove, who won the Governance and Com-
pliance Award for his turnaround tenure at DigiCore,
is now Senior Vice President of Sales and Execution
at Inseego, the California-based company that bought
DigiCores Ctrack brand at a premium (see page 15)
Oceana CFO Imraan Soomra, who won the Transfor-
mation & Empowerment Award in 2015, has since been
instrumental in the acquisition of Daybrook Fisheries,
which has turned the company into a global player. He
has also been nominated for the 2017 CFO Awards.
Discovery Health CFO Brett Tromp, who was
Young CFO of the Year and winner of the High
Performance Team Award in 2015, has since been
named CEO of Discovery Healthcare Services in
addition to his CFO role.
Last years double-award winner Walter Leonhardt,
for his transformational role at SAB Millers soft drink
bottler ABI, has since become CFO of the larger entity
Coca-Cola Beverages South Africa.
Last years double-award winner Osman Arbee (CFO
Imperial) is now the CEO of Imperial Motors.

14 CFO MAGAZINE CFO.CO.ZA

 MOVERS

Four quotes by Deon Viljoen

If you think you have a good deal, look at all the
stakeholders again and craft an exceptional deal.
At Alexander Forbes, our biggest asset is goodwill.
We sell expertise, IP, relationships and trust. Repu-
tational risk is very tough to manage. It is not on
the balance sheet, but it is crucial to us. Our clients
trust us and I feel that I contribute to that.
As CFO I am at the centre of the strategic decision-
making. Although I joke about having aged in dog
years during the last seven years in this role, I have
also gained a lot of wisdom.
In life, there are two types of challenges: those you
voluntarily take on and those you inherit. Both are in-
spiring, but come from different parts of your being.

From Pretoria to San Diego

E
nding what has been one
of the most spectacu-
lar blitz-careers of South
African CFOs in recent
memory, Cobus Grove, his
wife Marilize, his son Christopher
and his daughter Kaitlyn boarded
a plane early this year and left
for California. The winner of
the Compliance & Governance
Award at the 2015 CFO Awards
will remain CEO of Pretoria-based
company Ctrack, but will be ful-
filling his role from the San Diego
headquarters of Inseego, formerly
known as Novatel Wireless.
I have been appointed as
Senior Vice President of Sales
and Execution, Cobus revealed
during a quick chat in his busy
schedule. My role is effectively
to manage the global sales strat-
egy and to ensure effective
implementation once transac-
tions are closed.
Then 34, Cobus received a CFO attend those events. The CFO
Award out of the hands of Prof South Africa platform is amaz-
Mervyn King in 2015, after he ing. It allows a CFO to share
saved DigiCore from a certain experiences and to learn from
demise and lined it up for an experienced others on how to deal
acquisition. It was a tremen- with challenging situations. The
dous learning platform for me, CFO Awards are also an amazing
admits Cobus. I was exposed network and acknowledgement
to so many business challenges platform. Being a CFO is a bit of a
and opportunities. little reward role and being nom-
inated and even winning an award
Cobus says he and his family provides great recognition. l
are excited about the adventure:
The exposure and opportuni-
ties the US provides, especially
for children, is tremendous and
the fact that we will be moving
to San Diego which apparently
has the best weather and long
beaches doesnt hurt.
Looking back at the CFO Awards
and the various CFO Summits
that Cobus has been involved in
over the last few years, he calls
on South African executives to

The CFO South Africa

platform is amazing.

CFO MAGAZINE CFO.CO.ZA 15

MOVERS
Cindy Hess starts at Media24, Matshepo More joins IRBA board
On the move
Some of South Africas most talented CFOs changed jobs in the last few months, with
notable appointments at Media24, Howden Africa, IRBA, WG Wearne, Resolute Mining
and Shell.
Cindy Hess
I
n one of the most promi-
nent CFO moves in the Cape
Town area, Cindy Hess moved
from Pioneer Foods to start
her new role at Media24.
Cindy was among the finalists of
the 2016 CFO of the Year Awards
for her work at Pioneer Foods.
She says it is an honour to join
Media24 at such an exciting
time in the media industry. She
takes over from retiring Media24
CFO Manie Mayman, who served
the company in the CFO capac-
ity from 2007 to 2009 and again
from 2014 to 2016.
Tyrone Soondarjee, Sasfins
long-serving group FD, will be
retiring this year. He will step
back as group FD and retire from
16 CFO MAGAZINE CFO.CO.ZA
the board and other relevant
Sasfin subsidiary boards from 30
June this year.
Following multiple CFO Awards
nominee Megan Pydigadus res-
ignation from her role as CFO,
financial controller Paul Dell
has taken over as interim CFO
of MiX Telematics. He was also
appointed to the board of direc-
tors. Stefan Joselowitz, MiX
Telematics CEO, said: I have
complete confidence in Pauls
ability and know he will do a
great job for us given his tenure
at the company and the value he
has added over the years. Megan
recently started her new role as
CFO of Eazi Access Group.
Tyrone Soondarjee
Marinella Vigouroux
Marinella Vigouroux has taken
over as Howden Africas CFO
from Kevin Johnson, another for-
mer CFO Awards nominee. Kevin
moved to the Colfax Corporation,
where he accepted a senior posi-
tion in the company. Commenting
on her new role, Marinella, who
has been with the company since
June 2012, said: I was appointed
just as we embarked on the finan-
cial year end process. One of the key
achievements in my role thus far has
been the smooth transition by the
team to the change of leadership and
the successful year end process.
Marinella says her plans for the
department this year include
building on the key strengths
of the individuals in the team,

Kevin Johnson
developing the finance leads
technical and leadership skills,
promoting further operational
understanding and improving
efficiencies within the depart-
ment to provide additional
operational value and promote
growth in the business.
Murray & Roberts has appointed
Prof Ben Marx
heads accounting
department UJ
Popular auditing lecturer Prof
Ben Marx has taken over from
his long-serving colleague Alex
van der Watt as head of the
accounting department at the
University of Johannesburg. I
am very excited to be leading
the best accounting department
in the country and to work with
its great, hard-working staff,
said Ben, who has also been a
member of the panel of judges of
the CFO Awards for the last four
years.
As Alex van der Watt has taken up
a role at the South African Institute
of Chartered Accountants (SAICA),
Ben will finally step up to the plate
after no less than ten years in a
Daniel Grobler as its new group
FD, effective 1 April. Daniel takes
over from outgoing FD Cobus
Bester, who was in the posi-
tion for six years and is going
to enjoy retirement. Daniel is
a CA(SA), who joined Murray &
Roberts in 2010 after various
roles at Deloitte in South Africa,
The Netherlands and the United
Kingdom. Most recently, he was
the MD of M&R Cementation,
the groups African underground
mining business, with a yearly
turnover of R3.5 billion.
At the Airports Company South
Africa (ACSA), Dirk Kunz has
been appointed acting CFO fol-
lowing the recent resignation of
Maureen Manyama, who is still
active as non-executive direc-
tor at JSE-listed company Aspen
Pharmacare and the South
deputy role. Nation building is
very important for us at UJ, said
Ben, who lauds the transformation
at the department. UJ is known
to have the lowest differences
in success rates between black
African and white passes when
compared with other universities
at SAICAs Initial Test of Compe-
tence (ITC).
Ben emphasises he is not going to
be wrapped up in meetings now
in his new role as HOD: I love
teaching and I dont think it would
benefit the department if I would
become a full-time manager.
Both Ben and Alex also play an
important role at private company
APC, which presents courses to
prepare for SAICAs Assessment of
Professional Competence (APC).
Bens ongoing role as judge in the
panel of judges of the annual CFO
Awards is an exciting addition,
MOVERS
African Reserve Bank (SARB).
Dirk previously worked with
Maureen as Group Manager:
Corporate Finance, and has
worked for ACSA since July 2008.
In the mining sector, Victoria
Milazi has been appointed CFO
of coal mine Nkomati Anthracite
in Mpumalanga, effective January
this year. Victoria was previously
the CFO of construction materi-
als company WG Wearne, a post
she held for just under one year
after three years in the posi-
tion of financial manager. To
replace Victoria, WG Wearne has
appointed Marius Bierman, who
previously held the same position
from December 2011 to December
2013. During his hiatus Marius
was GM of finance for media
company Caxton and he took a
plunge into the entrepreneur-
also for students, he has no-
ticed: It is important to bring the
classroom into practice and the
other way around. It is nice to be
part of the CFO Awards and to sit
on a couple of boards and bring
that experience back. Of the CFOs
of listed companies, 80% are reg-
istered CA(SA). We like to believe
we are educating future CEOs,
CFOs and ministers of finance.
CFO MAGAZINE CFO.CO.ZA 17
MOVERS
ial space, with a company called
Inspiren.
Public Investment Corporation
(PIC) CFO Matshepo More
has been appointed to the
Independent Regulatory Board
for Auditors (IRBA) for a period
of two years. As a PIC Board mem-
ber I am an advocate of corporate
governance and keen on shareholder
activism, which includes keeping a
focus on good corporate governance,
remuneration transparency, account-
ing and reporting based on IFRS.
I am pleased to be appointed to the
IRBA Board as I am committed to
investor protection, promoting a sta-
ble investment environment and
ensuring growth and transformation
in the profession, Matshepo said.
Further afield
Lee-Anne de Bruin has been
appointed CFO of Africa and
Australia-focused gold miner
Resolute Mining. She replaces
Resolutes long-serving CFO
Greg Fitzgerald, who will retain
the role of company secretary.
Although she has been work-
ing in Australia since mid-2009,
Lee-Anne is South African born
and educated. She completed her
Bachelor of Accounting in 1999
through Wits University and did
her SAICA board exams in 2002.
Lee-Annes namesake, Stefan
de Bruin, has been appointed
as CFO of Paratus Telecom, the
largest privately owned pan-Af-
rican telecoms operator. Stefan
will be responsible for grow-
ing the companys business in
Africa and overseeing the finan-
cial affairs of the group, which
has a presence in South Africa,
Namibia, Botswana, Zambia and
Angola. He will also focus on the
financial evaluation of new tele-
com infrastructure projects in
the continent.
18 CFO MAGAZINE CFO.CO.ZA
Jessica Uhl
Royal Dutch Shell has a new CFO
in Jessica Uhl, who took over
from Simon Henry, who held the
role for seven years. Jessica, an
American, joined Shell in 2004.
She will be an executive director
of the company and a member of
its executive committee, based in
The Netherlands.
Les Wood has been appointed
Africa-focused Tullow Oils
interim CFO, while Ian Springett,
the actual finance head, is off
on an extended leave of absence
for medical treatment. Les joined
Tullow in 2014 and previously
spent 28 years at BP, including
in regional CFO roles in Canada
and the Middle East. The London-
headquartered Tullow Oil has
production assets in Ghana
and exploration acreage in
Mauritania, Namibia and Zambia.
Millicom Africa CFO Mohamed
Dabbour has been promoted
to CEO of the telecoms com-
pany, replacing Cynthia Gordon.
Millicom operates in Africa and
Latin America under the Tigo
brand name. Mohamed has been
CFO of the African business since
August 2015. He has been with the
London-headquartered company
since 2008, spending time as CFO
of operations in Chad and Ghana.
Lekoil, a West Africa-focussed oil
and gas explorer, has appointed
Bruce Burrows as CFO. Bruce
is a member of the Institute
of Chartered Accountants of
Australia & New Zealand with a
lot of experience in the oil and
gas industry. He was previously
CFO at Seven Energy, a Nigerian
gas company, and prior to this,
was finance director of London-
listed explorer JKX Oil & Gas, a
position he held for 14 years.
Delphine Madou
Judges
Thusang Mahlangu has suc-
ceeded Delphine Madou as CEO
of Allianz Global Corporate &
Specialty (AGCS) Africa, as of 1
February 2017. Delphine, who was
on the CFO Awards panel of judges
from 2014 to 2016, will remain on
the AGCS Africa Board as non-ex-
ecutive director. Thusang joined
AGCS Africa in 2013 as Head of
Market Management focusing on
developing sales and distribution
across Africa. He subsequently
became Head of Property in 2014
and grew the portfolio in key
African countries. Seelan Naidoo
will take over the responsibility
from Thusang as Head of Property,
in addition to his existing role as
Head of Engineering.
Another former member of
the CFO Awards judging panel,
Riad Gydien, has been pro-

moted by his company SAS to
Senior Regional Vice President
role for the South and East EMEA
regions. Riad, a South African
who has been with SAS for ten
years, was most recently active
as VP for the Middle East and
Africa. Carl Farrell, SAS Chief
Customer Revenue Officer, has
said of Riads appointment: Riad
has insight and relationships from
his previous role that will transition
well into this expanded manage-
Three questions for Mohammed Akoojee, Imperials new Group CFO
Mohammed Akoojee has taken
over from award-winning out-
going CFO Osman Arbee, as
Group CFO of Imperial, effective
1 March.
Mohammed is a CA(SA) and CFA,
having qualified as a Chartered
Accountant in 2003. He com-
pleted his articles with Deloitte
before moving into banking,
where he worked as an equity
analyst for 18 months. He then
joined Investec as corporate
financier, spending five years
there. He joined imperial in 2009.
We asked him three questions.
1. How do you feel about taking
on this new role as Group CFO?
I am really excited about the role.
Imperial is a large, listed company
with annual revenues in excess of
R120 billion and operations on six
continents. We have market leading
businesses in both the logistics
and motor industries, with a clear
strategy on how we can grow these
ment position. As a seasoned leader,
he will build on the demand we are
seeing in the southern and eastern
EMEA while ensuring that busi-
nesses and organisations are getting
the resources and support they need
to thrive in changing markets.
The Southern African Venture
Capital and Private Equity
Association (SAVCA) has
appointed Tanya van Lill as CEO,
effective 1 March 2017. She suc-
businesses and create value for
shareholders. So, there is a lot to
be done. Its a big job but I am up
for it and keen to get going.
2. What will be first on your
to-do list once you take over on
1 March?
I have been with the group for
seven years, so I know the compa-
ny well and wont need to spend
a lot of time understanding the
business. I was the mergers and
acquisitions and investor relations
executive for the first five years
of my tenure, following which I
was the Imperial Logistics African
regions CEO.
I see the CFO role as not only a
financial one but also as strategic.
In a group like imperial, with op-
erations in both the logistics and
motor industries, Imperial Hold-
ings, as the holding company, is
the custodian of capital. Sourcing,
allocating and controlling capital to
achieve returns on invested cap-
ital superior to peers in similar
MOVERS
ceeds Erika van der Merwe, who
served SAVCA for over four years.
In her new role, Tanya, who previ-
ously held the position of Director
for Academic Programmes at
the Gordon Institute of Business
Science (GIBS) and served on
the board of the Executive MBA
Council (EMBAC), will focus on
increasing the industry profile
and deepening relationships with
all stakeholders. l
sectors and businesses is a key
priority and objective.
3. What do you hope to achieve
during the course of this year?
The CFO must be a business
partner to the CEO and must be in-
volved in designing and overseeing
strategy, operations and perfor-
mance. I want to be a CFO that is
proactive and innovative, and act
as an independent transformation
agent who adds value in the areas
mentioned above.
CFO MAGAZINE CFO.CO.ZA 19
STRIPPING THE COMPLEXITY
OUT OF M&A DEALS
W
hile African M&A continues
to rise, it seems information
security remains a major
barrier to closing deals.
Research conducted by ansarada
found that 71% of CFOs involved in
M&A deals have experienced increased
risk and been delayed due to a loss of
information or a security breach. This
includes a temporary or permanent
loss of data within documents, emails,
devices and IT systems.
Considering the sensitivity and
confidentiality at stake, it is alarming
that information loss remains such a
big issue. So what can deal makers
do to ensure they remain secure?
Thankfully, CFOs are in the drivers
seat and can effect the most change.
FOUR CONSIDERATIONS
First, to share information for
an M&A deal, fundraising, IPO or
tender, CFOs should choose a tool
specifically designed to conduct due
diligence. In-house FTP sites, email,
instant messenger or file sharing sites
wont guarantee information security
or leave a clear audit trail of access.
Second, consider which data room
best suits your deal. Will it proactively
prevent mistakes and breaches? Can
you track a document wherever it is?
Can you access it on any device, any
browser, without additional plug-ins?
Will the security assist the efficiency
of the deal, rather than slow it down?
Third, consider your Q&A process.
Stay within the closed loop of a data
room so that sensitive questions
and documents are only accessible
by valid participants. By contrast,
exchanging multiple documents over
email frequently results in documents
being sent to the wrong people, or
bidders receiving conflicting versions
of the same document.
Q&A tools can expedite the
process by setting restrictions
on volume, priority and scope of
questions - guiding bidders through a
faster, more focused exchange.
A recent ansarada study found these
Q&A changes saved an average 27.75
days per deal- a considerable reduction
in cost and workload for a CFO.
ARIE MAREE
Finally, how secure is the data?
Whilst VDR providers make similar
security claims, the reality is that
implementation differs wildly. If
they claim the necessary ISO27001
certification, does it apply to their
whole business and product, or their
data centre? What is the escalation
process for an information security
incident?
With advancements in compliance,
Q&A and security, CFOs should
be more in control of their deal
information than ever. Its disappointing
to know theyre often not.
n Arie Maree, ansarada Managing
Director Middle East & Africa
ansarada.com
0% OF DEALMAKERS
WANT DATA LOSS IN
THEIR DEAL
29% ACHIEVE THIS
71% of African executives have experienced data
loss during their deals, causing security breaches and
delays. Outdated IT practises during Q&A are a leading
factor.

Reduce data loss to zero. Bring Q&A out of email and

Excel spreadsheets and in to the data room the Q&A
facility purpose built for secure deals.

ansaradas understanding of, and ability to handle, the large

volumes of complex technical data that is required for M&A
in the resources sector makes the experience simpler and
easier.
NICK TURNER, SENIOR ANALYST - GLENCORE

Sandton +27 118 815 742 Stellenbosch +27 218 828 571 ansarada.com
DUE DILIGENCE

22 CFO MAGAZINE CFO.CO.ZA

 DUE DILIGENCE

Due diligence
Big deal! A thorough, smart and stealthy due diligence pro-
cess is among the top ingredients for successful mergers
and acquisitions. In the next six interviews, senior editor Toni
Muir speaks to finance executive and dealmakers about the
homework a growth-hungry company needs to do. When
should due diligence start? What information is relevant?
How should the CFO get involved? What does blockchain
have to do with it? How should the outcome of the exercise
influence price, deal structure and future integration?

Lessons come from a banker, a lawyer, a Big Four special-

ist, a virtual deal room boss and two top CFOs with inti-
mate insight in the process: Telkom CFO Deon Fredericks,
who played a pivotal role during the fascinating acquisition
of Business Connexion, and Charl Keyter, who has been
part of the insatiable executive team of Sibanye Gold, ever
since it was spun out of Gold Fields and started buying up
gold and platinum mines.

CFO MAGAZINE CFO.CO.ZA 23

DUE DILIGENCE

CFO Charl Keyter shares due diligence lessons from Sibanye Gold

Subtle, stealthy
and secretive
You dont always want to let the staff of the other company or companies know you are
doing this process. You have to be stealthy so as not to raise suspicions, says Sibanye
Gold CFO Charl Keyter. The process needs to be secretive and subtle, while still being
accurate, thorough and revealing.

C
harl Keyter gives one of the best and cer-
tainly most amusing explanations of due
diligence: It is like the other company is
lifting skirts. They let you look into their
books, their operations and their processes.
whose company is one of the most acquisitive ones
around at the moment. Sibanye Gold was spun
out of Gold Fields in early 2013, and over the past
four years has enjoyed a rapid rise to success. It
is widely regarded as one of South Africas most
dynamic mining companies.

I would definitely do a lot Stillwater

more work around the
tax due diligence in
future.
The due diligence process,
while more painful than what
is involved with a public offer-
ing to acquire another company,
gives greater access to information
and in greater detail, says Charl. You
can interrogate life of mine, for example.
You can understand the real performance or under
performance of areas and you can do physical site
inspections. So, if we acquire a mine we can go on
underground visits and see what the infrastructure
is like.
If any South African CFO can provide some excit-
ing insight into due diligence, it must be Charl,
After acquiring the Cooke asset and Wits
Gold, Sibanye ventured into plati-
num in 2015. They put in an offer to
acquire Anglo American Platinums
Rustenburg assets, also making an
offer to Aquarius Platinum share-
holders, which was accepted. The
Aquarius transaction concluded
in April 2016. The next step for the
company is abroad, with Sibanye
being currently involved in a R30 bil-
lion acquisition of Stillwater Mining
in the United States (platinum and palla-
dium), a deal that is already approved by the
South African Reserve Bank and expected to be con-
cluded during the second quarter of this year.
Charl has excellent insight into the role finance
heads should play. I dont believe the CFO should
drive this process but ultimately, when you do an
acquisition, it must be funded either by internal
sources or external. The role of the CFO is to ensure

24 CFO MAGAZINE CFO.CO.ZA


the due diligence is performed accurately and metic-
ulously because ultimately, the guys who do the deal
dont sit with the deal afterwards, their work is done.
The CFO must ensure prudence is applied in the pro-
cess. You have to be on top of this because otherwise
how can you say, with knowledge, whether the deal
should go through or not?
One of the most important takeaways of the due
diligence process, Charl says, is having a level of
accuracy that can support the financing the com-
pany needs. He has also learnt some tough lessons
along the way, particularly with regards to tax.
Experience has dictated that we had to do a lot
of work post the acquisition as far as tax was con-
cerned. I would definitely do a lot more work
around the tax due diligence in future, getting
legal opinions in this regard, and I would do this
upfront. Agreeing upfront on what sort of due dili-
gence information is required also goes a long way
to ensuring a successful due diligence process, says
Charl. Having two willing parties helps too, as does
adhering to timelines.
In several instances we
have questioned, when we
are presented with a life
of mine profile, why the
business is being put up
for sale if it is such
a good story.
Be stealthy
While there are numerous challenges
to the process, Charl says keeping the
investigation subtle can have a knock-on
effect. You dont always want to let the
staff of the other company or companies
know you are doing this process. You have to
be stealthy so as not to raise suspicions. A down-
side to this, he says, is that the information you
need may not always be forthcoming. It can be a
bit like pulling hens teeth. With it being secretive,
you cant play open cards or have frank discussions
with staff. Sometimes the other party even limits
you in terms of what line of questioning you can
offer. You dont always have unrestricted access.
DUE DILIGENCE
Another challenge, says Charl, is seeing through
the make-up. When something is put up for sale,
it is dressed up. The challenge is to see through
that to the actual results, performance and value
of the assets to then make adjustments to inter-
nal models to ultimately come up with a company
value. He offers some words of caution: In several
instances we have questioned, when we are pre-
sented with a life of mine profile, why the business
is being put up for sale if it is such a good story.
Guys put their best foot forward and use their best-
case scenarios. You must be careful of that and be
sure to look through historical information and
make your own assumptions. Dont rely only on the
assumptions of the counterparty. l
Charls
due diligence top 5
1. Understand the asset that you are
buying: what are the reserves and resources?
2. Conduct adequate legal due diligence.
3. Conduct thorough financial due diligence
and understand the companys operations
fundamentals. Do not neglect the tax aspect
and how this is structured.
4. Pay attention to the human capital process
and the people involved and ensure that you
can accommodate the Ts and Cs of their
employment contracts into yours.
5. If relevant, conduct environ-
mental due diligence.
CFO MAGAZINE CFO.CO.ZA 25
DUE DILIGENCE

Deloittes Karin Hodson: Do not only do due diligence to tick the boxes

Understand what
you buy
The due diligence report is often just used to tick the box and the findings are not ade-
quately translated into the pricing and sale and purchase agreement, says KarinHodson,
Partner and Transaction Services Leader at Deloitte. She warns that failure to undertake
adequate due diligence can result in significant erosion in value and potential losses of
customers, staff, and everything in between.

K
arin Hodson has worked in transaction ser-
vices for 16 years and has been involved in
close to 320 transactions during this time.
Over the last two years alone, she has been
involved in some 40 transactions. One of the
more recent deals in which she was involved
was the acquisition of Neotel by Liquid
Telecommunications. That deal closed
in eight months and was relatively
quick compared to the prolonged
Vodacom offer, which was even-
tually abandoned as regulatory
approval was not obtained.
This deal was particularly inter-
esting due to the complexities
involved in understanding the debt
and working capital requirements in
the company and how this was trans-
lated into the sale and purchase agreement,
says Karin. It was also particularly impressive how
Liquid managed to act so swiftly to obtain all the
required regulatory approvals to ensure the deal
was closed in the shortest timeframe possible.
Due diligence is used to gain insight into opera-
tions, financial and legal matters. And it is fun, says
Karin. The ability to add tangible benefits through
adjustments to the valuation model, input into the
sale and purchase agreement, such as warranties,
indemnities, conditions precedent, and purchase
price and closing mechanisms, as well as transac-
tion structuring and post deal considerations make
the work enjoyable. Clients rely on this infor-
mation to make an informed decision.
Vendor due diligence
Companies must understand what
they buy and what the transac-
tion structure is, Karin says. Are
they buying the shares or are they
buying the business out of the
company? Companies embark-
ing on a deal usually consider their
own capabilities and what they can
they do in-house before reaching out to
specialists or advisors. Funders and invest-
ment committees often require independent due
diligence reports. There is also the vendor due dil-
igence, which is commissioned by the seller and is
made available to prospective buyers. This allows
prospective buyers access to the same due diligence
report in a controlled manner and minimises disrup-
tion to the target entity.
According to Karin, Deloitte approaches its financial

26 CFO MAGAZINE CFO.CO.ZA


Karins
due diligence top 5
1. Understand the rationale for doing
the transaction and the strategic fit.
2. Identify the risks in the entity and the impact
this has on the valuation, sale and purchase
agreement and post-merger implementation plan.
3. Understand the commercial drivers: customers, suppliers, compet-
itive conditions, products and any risks or sensitivities.
4. Familiarise yourself with the operating model (systems,
people, infrastructure) to enable integration with your business, as
well as regulatory or legal matters that need to be addressed in
the sale and purchase agreement, such as regulatory approvals,
IP protection, restraints of trade and change of control clauses
in contracts.
5. Understand the current and forecast cash flows of
the entity and identify potential sensitivities that
impact the ability to generate cash and achieve
required returns and debt repayments.
due dil-
igence by
focusing on three areas: the
valuation, the sale and purchase agreement, and
post-transaction implementation risks. By analysing
financial records, business drivers are highlighted as
well as factors affecting the purchase price mech-
anism, such as net debt, net working capital and
contingencies, she says. We also consider any risks
that require protection in the sale and purchase
agreement, for example if there are contingencies
that cannot be quantified or regulatory require-
ments that need to be fulfilled.
It is important that the due diligence findings are
factored into the valuation, she notes, as well as the
sale and purchase agreement. The due diligence
report is often used to just tick the box and the find-
ings are not adequately translated into the pricing
and sale and purchase agreement.
Half-hearted
Success doesnt necessarily mean the transac- deal and to identify synergies, she notes. CFOs need
tion is going to happen, says Karin. In her opinion,
a successful due diligence process includes setting
expectations upfront, having regular commu-
nication throughout the process, and sharing
information between work streams. Sometimes
DUE DILIGENCE
access to information and management
is limited. Often, when a company is
up for sale the market and employ-
ees are unaware, so you have limited
access, Karin explains. Likewise,
access to competitive information is
often restricted.
Companies that overlook the due
diligence process, or which do a
half-hearted job, stand to lose
value, Karin notes. Financial
risks relating to the valuation
model may not be adequately
identified, resulting in potentially
overpaying for the acquisition.
There could be customer and sup-
plier losses, for example, if contracts
include change of control clauses.
You could also end up with HR issues
if there are different corporate cultures
and staff need to be integrated, or if you
lose key people post transaction.
CFOs need to be intimately
involved in appointing advisors
and ensuring the points that affect
value and synergies are covered.
CFOs role
The CFOs role depends on the transaction and the
client, as well as who or which team is running the
process, Karin says. Certainly, I would want to see
CFOs involved in this process. They need to think
beyond just the financial implications and consider
the strategic fit and the commercial viability. It is also
important to understand the rationale for doing the
to be intimately involved in appointing advisors and
ensuring the points that affect value and synergies
are covered. They must also familiarise themselves
with the risks they will need to deal with in their
post-merger implementation plans. l
CFO MAGAZINE CFO.CO.ZA 27
DUE DILIGENCE

ansaradas Africa MD Arie Maree about the power of virtual deal rooms

Planning ensures
deal success
You cannot over-plan. Once the rubber hits the road with a deal there are tight time-
lines, plenty of stress and lots of money at stake. More planning means a smoother due
diligence and ultimately, a smoother transaction, says Arie Maree, ansarada Managing
Director for Africa and the Middle East.

Our mantra is to simplify the due dil-
igence process, says Arie. ansarada
operates virtual deal rooms platforms
via which all of a deals communication
Aries can be streamed, and through which the
due diligence top 5 deal can be structured. The company, started
in Australia 12 years ago, and with offices
1. Easy access to information and in Sydney, Chicago and London, has run
the structure thereof. in excess of 30,000 transactions in 5,000
2. The speed at which you can communicate cities. Everything on the portal is track-
with everybody involved in the process on both able, so you can see which party looked
your side and theirs. at which document and when.

3. The security and safety of information, and applying ansaradas way of working allows for
adequate security to information in your hands. such things as the Q&A process to
4. Running the due diligence through be run in a controlled manner, Arie
a Q&A platform. explains. It also enables the person
selling the business to structure the deal
5. The insights you can draw from as they want it, which greatly reduces
analysing reports, and being able stress. Fast, easy and secure, the platform
to make decisions based features a reporting mechanism from which
on fact and data. insights can be drawn. For instance, you can
see if a counterparty is focusing only on certain
information, and prepare your team to answer
questions on that same topic.

Dump everything
The concept of the virtual deal or data room began
in the early 2000s. Prior to this, it was common-
place to have piles and piles of printed documents

28 CFO MAGAZINE CFO.CO.ZA


all labelled kept under lock and key in a law-
yers office, for example. Bidders would fly in to
access this physical data room before hopping
back onto a plane and returning to their office,
after which further dealings were conducted tele-
phonically, via email and Excel, says Arie. From
both a safety and simplicity perspective you can
imagine how this used to be. Now you can do all of
this on an iPad with zero risk. You can even run
a deal through your phone, via the deal room. The
amount of time and money that this has cut out is
huge. Technology has certainly simplified the due
diligence process.
Despite the relative newness of the deal room con-
cept, the way that this is used has also changed
over time, says Arie. These days, people are much
savvier with regards to how deals are structured
and the size of the data they put out to the buyer.
In the past, we saw massive deal rooms, where peo-
ple would just dump everything. Now people are
structuring it more effectively and filtering out the
unnecessary information to just present what is
absolutely necessary to the buyer, Arie says.
Data security
A major failing for any due diligence process is
being too lax when it comes to data security, says
Arie. Communicating via email or social media,
for instance, is a definite no. We have seen people
trying to run smaller deals on unsophisti-
cated file share platforms. The problem
here is that your information is often
in the public domain. Not know-
ing where your information is and
who is viewing it is very risky. In
fact, some banks will not touch
a transaction if there isnt a plat-
form in place that has the highest
creditable security.
Arie says that the key to a suc-
cessful due diligence is simplicity. If
you can cut away anything superfluous
and focus only on the sophistication where
it is needed, you should be successful. So, focus-
ing where it really matters to the outcome of the
transaction or value of the transaction. Planning
is also key, he says: You cannot over-plan. Once
the rubber hits the road with a deal there are tight
timelines, plenty of stress and lots of money at
stake. More planning means a smoother due dili-
gence and ultimately, a smoother transaction.
DUE DILIGENCE
Due diligence speeding up
ansaradas bi-annual analysis of due diligence
duration has revealed that the time taken to
complete this process has decreased. In 2014,
the average deal room was about three to six
months. Now we find it is closer to eight weeks,
says Arie. He attributes this to changing mac-
ro-economic conditions and people being more
cost-sensitive. With the timelines being so con-
centrated, closing and re-opening of the same
deal room is also more common.
Great help
Given their global perspective, ansarada has iden-
tified general differences and trends between local
and international ways of conducting due diligence.
Local processes are generally quite amicable, says
Arie. While you can severely control and restrict
security permissions on documentation, we find
that in South Africa, people generally apply basic
policies. Also, it is often allowed here for the buy-
side to download and print documents, which is
indicative of the nature of the process.
We often find that on the
sell-side, the business owner
is emotionally attached
to the business. This
warps objectivity.
Arie says that CFOs are in a
unique position as they can be
objective during the dealings.
We often find that on the sell-side,
the business owner is emotionally
attached to the business. This warps
objectivity, he says. The CFO is in a unique
position in that they can use financial analysis and
objectivity to the advantage of the asset or com-
pany being sold. The CFO can be involved with
advisors and consult to the CEO or business owner
to say what life after the transaction may look like.
The CFO, aside from having acute financial exper-
tise, can play a critical role in consulting back to
the business. l
CFO MAGAZINE CFO.CO.ZA 29
DUE DILIGENCE
Standard Banks Andrew Balnaves: focus and timing are crucial
Uncovering hidden
gems
Prepare, make sure all parties are on the same page and do not get distracted by unnec-
essary details, advises Dr Andrew Balnaves, Executive Vice President of Africa Corporate
Finance at Standard Bank.
Properly conducted due diligence might
uncover hidden gems, says Andrew. If you
uncover something in the due diligence that
you werent aware of, that is a huge upside
that you havent previously understood and
makes the whole process more attractive.
According to Andrew, due diligence is a professional
and well-understood process that should
run smoothly. Before you get started,
consider why you are pursuing the
transaction and identify which key
metrics need to support the invest-
ment thesis, he advises. Plan and
prepare, get clarity on the expec-
tations of both sides, and ensure
the counterparty is on the same
page as you.
I foresee less physical
inspection of accounts and,
though this is perhaps five or
ten years way still, blockchain
accounting could play
a huge role.
30 CFO MAGAZINE CFO.CO.ZA
It is also important to enter a deal with a focused
mind, Andrew says. To this effect, you should know
what your investment proposition is. Your due dil-
igence should be aligned to this and tailored to
suit the needs thereof. He cautions against cul-
tural or expectation mismatches, which he says
can curtail a deal because the two parties end up
frustrating each other. In this regard, expectations
are extremely important, he emphasises, as
is ascertaining the commitment of the
other party before the process kicks
off. You dont want to open your
books to someone unless they are
a credible party and theyre highly
likely to execute the transaction,
he says.
Materiality
Andrews experience of deal mak-
ing has given him insight into the
different stages thereof, what works
and what doesnt. For instance, people
often get too bogged down in the details, he
says. You need some guidance on what the level of
materiality is and what is really driving the busi-
ness. Often, you will have very excited external
advisors or technical advisors and they may get
drawn into certain elements of the due diligence.
You must ask whether this part of the due diligence
is relevant to the overall value proposition. Youre
always a burden to the counterparty in terms of

what you are asking for, so you need to ensure the
due diligence is appropriate. Thats key. You dont
want to frustrate the counterparty.
Timing is everything and timelines and deadlines
should be agreed upon upfront, says Andrew. I
would even advocate delaying the due diligence
process by a couple weeks if both parties arent
ready, he says. It might be better to wait and have
a shorter process with positive momentum and
good lines of communication rather than a stop-
start process that frustrates.
100-day plan
While the CFO certainly has a crucial role to play,
Andrew doesnt believe they should be overly
involved in the day-to-day due diligence process.
The CFO is a busy person and they want to lever-
age and rely on the financial advisor, especially if it
is a large due diligence. That is critical, he says. The
CFO should only really come in at the beginning, for
a few touch points at the middle, and then again at
the end as the due diligence reports are finalised.
Andrew says the CFO should have an under-
standing of why the company is undertaking
the transaction, and says the scope of work
should try to tackle this and ensure there
exists a key rationale supported by the
due diligence, which can be referred back
to. At the end of it all, youre going to get
due diligence reports from various pro-
viders. It is important to sit down with
your advisors as a CFO and grade those
risks, high to low, and ensure they are
appropriately communicated to the board,
especially where the value proposition is
concerned, to make everybody aware of
what you have identified.
The due diligence plays an important part in
post-deal integration, continues Andrew. During
this process, the deal captain or CFO should take
the key findings of the report and ensure it fits into
the 100-day plan. The should also get sign off from
the board on how they intend to circumvent any
risks or challenges identified in the due diligence
report. That must fit into the integration plan.
DUE DILIGENCE
Backchannel
If you are using a financial advisor, Andrew feels
they should take on a project management role,
and be a back channel and line of communication
between parties. He feels that experts and advisers
add value in that they are external to your team, and
thus outside of your resources and time. If you have
got a small business development team and a lot of
roles and responsibilities, the ability of an expert or
adviser to guide those people and run the process
for you is critical, he says. They have got their own
expertise and they may identify elements that you
may ordinarily not identify. They should be advis-
ing on how to mitigate recognised risks. You can
leverage the combined experience of advisors and a
technical team to support your deliberations. l
Andrews
due diligence top 5
1. Prepare and define the scope
of what needs doing.
2. Communicate with the counter-party
what you intend to do.
3. Keep to a tight, agreed timeframe
and maintain momentum.
4. Ensure key findings are disclosed in the board
pack and integration plan, and are factored
into the price and other adjustments.
5. Be flexible and maintain an open mind
so that if things change in the process,
you can be agile where you
need to be.
CFO MAGAZINE CFO.CO.ZA 31
 DUE DILIGENCE
Bowmans M&A head Charles Douglas focuses on contractual protection
CFO as connector
The CFO can really help to join the dots in a deal. The CFO is the connector between
everybody involved because he or she understands how the business risk translates into
the numbers, says Charles Douglas of law firm Bowmans.
The best due diligence processes are the
ones that are framed by an understand-
ing of the business and the risk that is the
differentiating factor, says Charles, who
heads up the M&A lawyers at his firm. He
highlights the importance of translating risks con-
sidered and risks identified into the transaction
documentation. One approach is to develop things
in tandem and get everything in writing.
Ideally, the CFO shouldnt only focus on the finan-
cials, there needs to be a cross-over. The CFO,
along with other execs, can really help to
join the dots in a deal, Charles says. He
calls the CFO one of the people that
can act as the connector between
everybody involved.
The CFO is the one who under-
stands the numbers as well as
how the business risk translates
into the numbers. CFOs sometime
dont like, or dont immediately
see the value in, going through the
As a CFO, you really want both
the due diligence you compiled
yourself and the set of promises
from the sellers.
32 CFO MAGAZINE CFO.CO.ZA
long list of warranties or promises about the busi-
ness, because that is seen as the legal work-stream,
he says. This is, however, an important part of the
process. An optimal situation would be one where
the CFO engages on the legal details, guided by the
experts, to ensure that what concerns him or her
from a financial and risk perspective is catered for in
the contractual protections.
Up at night
If you plan to involve outside advisors or experts,
Charles says it is important to ensure they are
clear on which issues keep the CFO up at
night. It is incumbent on the advisor to
ask the questions to try get the scope
right. If you make a real effort as
a CFO to ensure advisors under-
stand why you want to do the
deal, what is worrying you about
the deal, and what the risk issues
each advisor should be looking
out for are, this will be massively
helpful to the process.
Once you start your due diligence you
are incurring costs, so you need to know
you have got a deal to do before you start get-
ting the various advisors involved. It is a stage of the
M&A process where the costs rack up quite quickly,
says Charles, adding that an astute company might
start the process with a key risk analysis. It is
always a question of what the scope of the work
should be. Quite often if it is not efficiently scoped
and you can have people doing their jobs, but in a
way that is not all that helpful to the company.
 DUE DILIGENCE

Charles
due diligence top 5
1. Ensure a proper understanding of the
business realities and risks so that the due
diligence work can be framed up and
properly contextualised.
2. Ensure that the basis of the engagement is well
understood with the target so that the fact that the due
diligence is for the purchasers benefit is understood and
does not interfere with the contractual protection.
3. Ensure the contractual protection is fit for business
purpose so that if an issue arises, the way the
contractual protection is framed up works
within the context of the business.
4. Bridge the divide and know how to make
things work if you are moving
into unchartered territory.
5. Ensure access to and quality
of information.

Charles notes that, because the CFO has a good
understanding of the issues and the risks, it is
their prerogative to ensure that contractual pro-
tection is a key component of what they are trying
to achieve. While you might start with a set of
standard warranties tailored to the maximum
extent possible, based on the given understanding
of the business, the more refined those warranties
the better, he says.
An assumption
What often happens is that you run due diligence
and get comfortable with the risks but there is an
assumption that risks are adequately dealt with
in the contract, for example that your contractual
protection is going to work. So what sometimes
happens is that you do the work, you negotiate the
agreements and you buy the business, but then
an issue comes up. You might check the contract
to see how this is covered by the warranties, only
to realise the warranties dont quite fit the factual
matrix. You are then left wishing you had spent
more time thinking about the warranties to ensure
they cover everything. That protection is there for
unknown risks. l
Charles Douglas
in action
Charles works on between six and ten deals each
year and calls the current M&A activity in South
Africa interesting and busy. One of his most
interesting recent jobs was advising IRESS Limited,
a financial technology services and solutions
provider listed on the Australian stock exchange, in
relation to its acquisition of I-Net BFA, a South Af-
rican financial technologies services and solutions
provider, from Naspers-subsidiary Media24.
As part of ongoing M&A advisory work that
Bowmans has done for SABMiller, Charles
recently also advised Anheuser-Busch InBev
NV about its disposal of a 54.5 percent stake
in joint venture Coca-Cola Beverages Africa to
the Coca-Cola Company. That transaction was
valued at $3.15 billion.
This year Charles has advised Kansai Plascon Afri-
ca, a top global paint manufacturer and a subsidiary
of Kansai Paint, in relation to its proposed acquisi-
tion of Sadolin Paints operations in Kenya, Uganda,
Tanzania, Zanzibar and Burundi. Although the deal
value is undisclosed, this is considered to be one of
the largest corporate acquisitions in East Africa in
the last two years, says Charles.

CFO MAGAZINE CFO.CO.ZA 33

DUE DILIGENCE

Telkom CFO Deon Fredericks shares lessons from the BCX acquisition and beyond

Put your best people

on the deal team
Do two rounds of due diligence, put your very best finance team members on the deal
and make sure you do your homework, says Telkom Group CFO Deon Fredericks.

In my opinion, a proper due diligence is the
most important step in any acquisition,
says Deon Fredericks, whose long career at
Telkoms finance department culminated
in the role of Group CFO a few years ago. To
ensure effectiveness of that process, several things
need to be in place, he says. The first is a com-
mitted, dedicated team. Sometimes you let your
advisors do most of the work and the challenge
Deons is that when the due diligence is finished, their
due diligence top 5 role is finished, and they dont carry that
responsibility going forward.
1. Validate the revenue stream.
In the past few years, Deon has been
2. Understand the costs. instrumental in managing a number
3. Understand the strength of the balance of successful deals. One of these was
sheet within the organisation. the companys acquisition of Business
Connexion (BCX), a deal with a R2.7 bil-
4. Know the strength of the people involved. lion price tag. Sharing some lessons learnt
5. Consider the cultural fit from the first 90 days post-deal, Deon
of the organisation. highlighted the importance of understand-
ing what you are buying, also noting the
need to be mindful of the culture of the com-
pany being acquired. Try to keep that entity
independent and entrepreneurial as far as possi-
ble, he says, citing the BCX example.

Deon opines that the CFOs role is an import-

ant one. The CFO fits in upfront, he says. He is
involved from the strategy stage. It is his job to
ensure the target you are focusing on is not only
attractive but also the right fit for the company
and that it will help you achieve your strategic

34 CFO MAGAZINE CFO.CO.ZA


objectives. The CFO gets involved in the critical
decisions, he says, though he will not be part of
the full process. The CFO will be involved in key
matters, and again when decisions are made to
conclude on the transaction, at which point he will
indicate his support or raise his concerns. Where
the CFO really plays an important role is in price
discussions and deal negotiations specifically
where there are long-term incentives that form a
part of the management structure.
Incentive schemes
For a deal to be successful, staff involved in the due
diligence need to understand the business and the
industry and where both are going, know what to
look for and what pitfalls to watch out for. They
must also build a good relationship with the com-
pany you are buying so that theres openness in the
dealings. Deon offers words of caution in response
to some common failings of the due diligence pro-
cess: Dont think that if you rush things you can
buy your way out of trouble. If you have a chal-
lenging situation you first need to ensure that it
stabilises before considering buying.
He further warns against buying busi-
nesses that you do not understand,
or about which you do not have
adequate knowledge, abilities or
people to manage it. Also, be
mindful of buying companies
that are built around people, he
says. If they dont stay this will
seriously affect your business. You
will need to ensure that innovative
incentive schemes are in place that
will keep the talent and protect the
company, if this happens.
Deon highlights the importance of good culture fit:
When you put two companies together you are
going to spend most of your time trying to align
the cultures. Trying to change something that is
entrenched can be difficult. Sometimes, if manage-
ment is the problem, you could go as far as to say
Im buying the business but without management.
Because that might be easier in terms of integration.
DUE DILIGENCE
Dont just blindly accept what is
presented to you.
Two rounds
Always ensure you get your best people on the
project, says Deon. We tend to think that, because
we have a business to run, our best people need to
focus on this and we put less than our best on the
deal. But then you risk these people missing key
things during the due diligence, which your best
people would have picked up.
Deon advocates two rounds of due diligence, espe-
cially if a deal takes a very long time. You need to
ensure upfront before you agree to anything, that
if it takes more than a certain time depending on
the type of company and deal that you want to do
a supplementary or complimentary due diligence,
but you need to agree upfront to this. The purpose
of this is to validate for the last six months
what the company has achieved are
they actually performing as they have
said they are, he explains. If it turns
out they arent, you can reprice or
walk away.
On deal making, Deon offers some
pertinent words of advice: Dont
just blindly accept what is pre-
sented to you. Ensure that you
do your validation well and look at
trends, what contracts are in place,
the length of these, whether the reve-
nue is dependent on people in the organisation
and what would happen if those key people were to
leave unexpectedly." Also, take your time, he says.
Sometimes the counter-party wants to disrupt the
process. But wait until all the information is available
before doing the due diligence. Ensure that all key
information is available so that you can validate what
management is presenting to you. And dont become
too emotionally involved. l
CFO MAGAZINE CFO.CO.ZA 35
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National Treasury CFO:
adventures of the new Silindile Kubheka

Swim. Skate.
Climb.
By the end of this interview, Silindile Kubheka has jumped
into a deep pool, mastered a slippery ice rink and set off
to summit the highest mountain. In the meantime, we
have tried to unpack the remarkable metamorphosis of the
National Treasury CFO from a shy, quiet serial student to
a leadership powerhouse with strong views on boardroom
dynamics, youth development and ways to professionalise
government. By Jol Roerig

CFO MAGAZINE CFO.CO.ZA 37

PUBLIC SECTOR
Can you please give me
the opportunity to fin-
ish what I was saying? A
stunned splattering of men
gasp, nod sheepishly and
murmur of course. Contrary to
her predecessor, the soft-spoken
incoming CFO is not well known.
But the very moment she asks
for silence and respect from this
room full of high-powered males
is the making of the new Silindile
Kubheka, National Treasury CFO.
This moment is the second of
two events that the 38-year-old
Silindile pinpoints when asked
what made her change from a
shy, quiet person to a proud pro-
fessional, who strides through
the corridors of power with a
confident gaze. She now dresses
to impress and speaks her mind
whenever she knows what she
is talking about, which judging
by her rise to the top is often.
I used to work at the National
Treasury two jobs ago, but peo-
ple that I worked with then dont
recognise me when they meet
me now. At the time, I was in
the middle of a pregnancy and I
may have been very timid. I was
always making sure other people
were happy and would not speak
up. When I meet my colleagues
from those days and I tell them
my name, they cannot believe it.
In 2015, Silindile worked at the
Auditor-General and she did ini-
tially not apply for the CFO role,
until she was convinced to throw
Whatever fears you
might have, whatever
intimidation you might
feel, you can either
make it or break it.
38 CFO MAGAZINE CFO.CO.ZA
her hat in the ring. It was one
of the toughest interviews of my
life. I had to do a presentation
on a case study, explaining how
I would move an entity towards
a clean audit. I was supposed to
have 20 to 30 minutes, but just
before the interview they told me
they only had time for 15 min-
utes. Then they asked a lot of
technical questions.
Fears and intimidation
During her earlier stint at the
National Treasury, Silindile had
dealt with DG Lungisa Fuzile as
acting chief risk officer or when
sitting in meetings on behalf of
the previous CFO. As tough as the
interview was, the omniqualified
Silindile counts the experience
as the first of her two life- and
career-changing events. When
presenting a case study like that,
you really have to convince peo-
ple. Whatever fears you might
have, whatever intimidation you
might feel, you can either make
it or break it.
The definite breakthrough came
during Silindiles first exco meet-
ing, with the DG and all his
deputies present. I could have
just sat there, listened and been
submissive, but I would not have
been taken seriously, she says.
You only have one chance for a
first impression. So I spoke up.
Now I always have things to say.
I see these meetings as my best
opportunity to influence strategy
and I dont just want to attend to
occupy the space. There is a lot
of pressure. I am always respect-
ful, but I never confuse respect
with blindly following others.
These days, Silindile discusses
feminist literature with her
Johannesburg-based book club
and dreams of travelling to
African countries and beyond.
I am always
respectful, but I never
confuse respect with
blindly following
others.
The old Silindile had never
left the greater Durban area
until 2005, when she moved to
Johannesburg as a newlywed.
Swatch watch
I come from a township called
Kwamashu in Durban. I was an
average student until I realised
only when I was in the Durban
University of Technology what
was at stake, and managed to
get bursaries, Silindile explains.
A daughter of a taxi driver and
a factory worker, she remem-
bers being a shy girl except
when it came to her obsession
with Swatch watches. The solu-
tion: young Silindile Bophela
did chores at home, so her mom
could work longer hours to afford
a watch for her daughter.
I pushed myself and I teach my
kids to do the same. I always say
that if you want to study and you
cant afford it, you need to con-
vince someone else to pay through
a scholarship. But then you also
need to do your own part.
Her own resolve helped Silindile
become a chartered accountant
and certified internal auditor
(CIA) with certificates in risk man-
agement, corporate governance
and project management, among
others. Those qualifications did
not come quickly and she only
chose the finance route after she
realised there was too much
blood involved with her first
choice, zoology. As her highest
 PUBLIC SECTOR

CFO MAGAZINE CFO.CO.ZA 39

PUBLIC SECTOR

40 CFO MAGAZINE CFO.CO.ZA


mark in matric was account-
ing, the journey was charted,
first towards a diploma and then
the admittedly arduous path
towards becoming a CA(SA).
From a bookkeeper at Ngubane &
Co in Durban, Silindile moved to
Nkonki in Johannesburg to work
with clients in the investment
and telecoms space. After qual-
ifying in 2007 and a short-term
contract at the State Diamond
Centre, she joined the internal
audit division at KPMG.
Why leave Nkonki?
During articles you have suffo-
cated, you have cried. I wanted
to develop and there are more
opportunities at a big firm like
KPMG. I wanted to explore and
see where my career could take
me. I got involved in the internal
audit of banks, the automobile
industry and telecoms, among
others. It was very diverse.
Having said that, Silindile
still fondly thinks back to the
great learning curve at Nkonki.
Coming from Durban, which
was very chilled then, with peo-
ple driving 100 in the fast lane, it
was a culture shock. It was steep
personal development, with a
telecommunications company as
a highlight. At a smaller firm, you
have to work relatively harder.
You dont want to be responsi-
ble for losing a client, as it would
have a detrimental effect.
No housewife material
What looks like a dry bunch of
career paragraphs on paper, was
in raw and real life a precari-
ous balancing act with studying,
work deadlines and tiny children
to juggle. After a short stint at
Absa, a period back home to care
for her ill father, and a second
stint at Nkonki, Silindile took a
break. I decided to stay at home
with my young daughter my
son was not born yet, but after
seven months I realised I am not
housewife material.
What followed was a job at
National Treasury, one at the
Auditor-General doing strate-
gic projects and since April 2016
the CFO role, where she counts
exco and parliament appearances
among her most exciting working
days. I dream about the day that
I can spend most of my time with
the team doing coaching. We
have coaching sessions, but a full
day would be the ultimate. I want
to provide opportunities to people
that are coming through the ranks.
For me, coaching is not about
telling them what to do, but shar-
ing experiences and transferring
knowledge. My wish is that talent
development and succession plan-
ning in the public sector becomes
a planned, transparent process.
According to Silindile, the
National Treasury has a massive
role to play in making things bet-
ter. We are a training ground.
We are appointing young peo-
ple, they learn and then they
leave and use their experiences,
which is great. I am not apolo-
getic about the fact that I want to
contribute to black women pro-
gressing. There are not a lot of
women in senior roles. For me,
the DG and DDG are just a phone
call away, but support for women
is lacking in the lower levels. We
need to break the barriers. There
should be no limits based on
colour or gender or age.
As much as Silindile beams pas-
sion about nurturing young
talent, she feels the youth should
be teachers too. As a manager,
you learn from your team. What
worked five years ago, doesnt
PUBLIC SECTOR
When I tell people
that I work in the
public sector, people
often assume I am part
of the corrupt ones.
work now. You need to be flexible
and be open to new solutions. At
the same time, you need to strike
a balance, as you also work with
older people. Being a mother, I
relate much easier to people, I
think. When chatting, I try to
remove the position from the
person. They cant confide in you
if they see you as the CFO.
Serial student
With the National Treasury
being the bank of the country,
Silindiles position is an inter-
esting one. As the sole CA(SA)
within the finance team, she is
responsible for a finance team
of 68, joins the minister and
the DG in parliament on some
occasions, but is mostly a back-
ground-operator. "Every financial
decision that Treasury makes, I
have to endorse. Who we hire,
what we buy, which projects we
embark on.
Silindiles career is character-
ised by multiple studies and short
stints at jobs, but that is about
to change, she says with a smile.
I am a serial student and I have
registered for a three-year MBA.
I am a self-aware person. I love
developing as a person, says
Silindile, who usually works for
long hours in the evening after
putting her children to bed.
Her current role is perfect for
that, says Silindile, who sounds
CFO MAGAZINE CFO.CO.ZA 41
PUBLIC SECTOR
ready to grab the bull by its
horns and shake it. The posi-
tion provides this power. That
is a major realisation to have. I
had never been a CFO before as
much as I have worked in vari-
ous finance-related positions, so
I jumped onto the treadmill and
had to learn so much. I had to be
in control of my time.
Silindile says she joined the
department during the era of
cost-cutting and shoestring bud-
gets, but she doesnt see her or
the Treasurys role as having a
narrow focus on numbers. We
need to explore how we can con-
tribute to the rest of the public
sector. I want to change the per-
ception that Treasury is very
arrogant. Just as a CFO cant be a
five-star performer as a manager
when my team scores three-stars,
the National Treasury cannot be
seen as excellent if the rest of the
public sector is lagging.
Baggage and stigma
Battling corruption is also high on
the CFOs list of priorities. When I
tell people that I work in the pub-
lic sector, people often assume I
am part of the corrupt ones. In
my role I am shielded from pol-
itics, but there is the baggage
and stigma of people being lazy,
incompetent and corrupt. I want
to change that and showcase that
there are ethical professionals
and people of integrity working
in high positions within the pub-
lic sector. What I do should not
benefit myself, but the country. If
you look back at my era, I want
to be part of professionalising
government.
Young accountants should also
realise the massive opportunities
to make a difference in the pub-
lic sector, says Silindile. For a CA,
there is no opportunity to bring
42 CFO MAGAZINE CFO.CO.ZA
When I was in the
water I realised:
I cannot give up now,
because I will drown.
IFRS knowledge into practice, but
when you are in a position like
mine you can work with a R599
billion budget. If you had such
a responsibility in the corporate
world, a CFO would rank very
high on the scale.
Talking to the new Silindile
Kubheka, it sounds like a story of
a cautious talent who surprised
all and sundry by being a good
swimmer when thrown in the
deep end.
Swim. Skate. Climb.
I have literally been taking
swimming classes, Silindile
reveals, explaining she joined
her two children during les-
sons. Swimming is not something
kids growing up in Kwamashu
would learn, but as a mother
she did not want to be power-
less in an environment where
her kids thrived. I started in June
last year and got my certificate
in December. When I was in the
water I realised: I cannot give up
now, because I will drown. The
teacher doesnt get into the pool.
She just tells you to do dolphin
kicks and butterfly strokes. She
is in jeans, so I think by the time
she jumps in to rescue me I will
have drowned. It was hard, but
I have realised I can do anything.
Recently, Silindile took up ice
skating lessons too. When I
went to the skating rink with
my daughter, I was falling all
the time even though I was try-
ing to hold on to the railing.
Afterwards my muscles were so
sore, I could not walk. I hated
that feeling of being afraid and
helpless. When we got home,
my daughter told my son: mom
cant skate. That is why I have
secretly signed up for lessons
and I will only tell my kids when
I have mastered it.
It doesnt take a literature
scholar to see the parallels
between Silindiles personal
and professional develop-
ment. Ultimately, she says, I
want to summit Kilimanjaro. As
black South Africans we tend
to be very insular. I also lived a
secluded life, but now I want to
go out there and explore other
countries. Ever since she has left
her KZN-roots, Silindile yearns
for travel. With her husband-
of-12-years and children they
go as far as Jozini Dam and the
Drakensberg, but Silindile wants
more. Her curiosity has been
ignited and stimulated by the
friends in her book club, which
she warmly mentions more than
once during the interview.
Back in Johannesburg, the new
Silindiles is drawing com-
parisons between patriarchal
systems of her own Zulu-
upbringing and Ayaan Hirsi Alis
Islamic childhood in Somalia
in the bestseller Infidel. I have
become much more empowered.
I want to know why Rwanda is
the cleanest country in Africa, I
am curious about the situation in
Gambia. My book club consists of
well-educated and well-travelled
people. Not long ago I would have
said: oh my word, would they lis-
ten to what I have to say about
these books? They used to say
words I had never heard of. Now I
can talk for hours. l
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PUBLIC SECTOR
Award-winning NAC CFO Dumisani Dlamini kicks off City to City Public Finance tour
Vision, analytical
skills and education
Award-winning National Arts Council (NAC) CFO Dumisani Dlamini took time off his hectic
schedule to share his experiences as a CFO in the public sector at the first City to City
Public Finance session of the year, held at the Menlyn Boutique Hotel in Pretoria on 15
February 2017. By Tiisetso Tlelima
T
he City to City Public
Finance event series is
an initiative started by
CFO South Africa, giv-
ing CFOs working in the
public sector an opportunity to
learn, network and share chal-
lenges they face.
Public sector challenges are
unique from those of their peers
in the private sector, so that is
why I asked Dumisani to come
here and share some of his
experiences, how he has over-
come the challenges and what
he has planned for 2017, said
CFO South Africa MD Graham
Fehrsen, addressing the attend-
ing CFOs. The session began
with Dumisani sharing his story,
but soon became a vigorous dis-
cussion with the attending CFOs
also contributing to the debate
and sharing experiences from
their respective organisations.
CFOs from other public sector
entities agreed that they often
experienced the same challenges
44 CFO MAGAZINE CFO.CO.ZA
that Dumisani spoke about.
Jacomien Rousseau, CFO of
Umalusi, added that her organi-
sation had to have an upgraded
system as they were using old
technology in the past. Irene
Mathatho, CFO of Companies
Tribunal, pointed out that every-
thing was done manually in her
organisation and that they had
to put better systems in place to
improve the organisation.
Having weak human resources
and weak systems and controls
can cripple an organisation, said
Phetsile Magagula, CFO of the
National Metrology Institute of
South Africa (NMISA). When
you have the right and correct
systems in place, people start to
believe you and definitely will
follow your lead. I had to cen-
tralise the IT system and other
facilities so that they operate
from one place, which has made
the organisation more efficient.
Saving money
Throughout the session, it became
clear that three elements are
needed to run a public organisa-
tion successfully as a CFO: vision,
analytical skills and education.
The vision of an organisation is
vital because as a CFO you have
to show the organisation where
you are going, so that you can
get a buy in. Staff members need
to understand the benefits of
choices that a CFO has made. It is
also important that CFOs speak
the language and understand how
the organisation works before
they can offer recommendations
on how to save money.
The role of a CFO is not only to
look at the budget but to help
people come up with strategies
as well, therefore it is essential
that they understand the envi-
ronment. Sometimes CFOs find
that some organisations do not
really care about the budget and
it is their job to show the rest
of the organisation that they
can get the same thing for less
money and more efficiently.

Do the work
In the public sector every-
one wants a clean audit but no
one wants to do the work to get
there, explained Irene. When I
joined the Companies Tribunal,
I had to analyse the situation,
understand it and explain it to
the staff. I had to balance the
organisational mandate with the
finances, which is not easy.
A recurring theme through-
out the discussion was how do
CFOs marry vision and finance
and make sure that the vision
becomes a reality. Most CFOs
expressed that sometimes the
CEO and the visionaries in the
organisation, although they
mean well, have unrealistic
expectations and their visions
are unattainable.
Earlier, Dumisani told CFOs that
when he first joined the NAC he
had to consolidate two subsidiaries,
which was extremely challeng-
ing because he had to work hard to
form relationships and even harder
to turn things around.
Funding artists
There was always a problem of
over-expenditure of the budget,
which meant that the organisa-
tion was spending more money
than there was in the budget.
For example in one situation,
PUBLIC SECTOR
the board was making decisions
without having all the necessary
information at their disposal,
which led to an increase in
expenditure. The CFOs task
was to ensure that there was
regulation of expenditure
before paying for consultants
or buying new equipment or
approving upgrades.
Dumisani encouraged CFOs to
always find out where and how
they can cut costs and save the
organisations money. Instead of
having maintenance all year for
printers for instance, call them
only when the printers break.
That way you save money.
Dumisani shared with the
attendees that, when he arrived
at the NAC, he realised that the
organisation was not spend-
ing the money it was supposed
to spend on funding artists. At
the end of the financial year the
bulk of the money the NAC was
supposed to use to develop art-
ists remained with the fund.
However, since he came on
board this situation has changed
drastically and the entity is now
offering R34 million worth of
grants per quarter. l
CFO MAGAZINE CFO.CO.ZA 45
 What is the
depreciation for
the lions and the
reptiles?

46 CFO MAGAZINE CFO.CO.ZA

 PUBLIC SECTOR

Why National Credit Regulator CFO Ayanda Mafuleka is nicknamed Pravin Gordhan

Walk the talk

I have been nicknamed Pravin Gordhan because I always say there is no budget, says
Ayanda Mafuleka, chief financial officer at the National Credit Regulator (NCR). Last year,
Ayanda contacted CFO Magazine, describing herself as a normal girl from Umlazi town-
ship who dared to dream. What followed was a fascinating conversation about achieving
clean audits, accounting for lions and baby animals and following in the footsteps of her
role models Nonkululeko Gobodo and her two grandmothers. By Toni Muir

I am a very hands-on CFO
and I am very driven, says
Ayanda Mafuleka. Her
organisation, the National
Credit Regulator (NCR),
falls under the Department of
Trade and Industry (The dti), led
by the affable CFO Shabeer Khan,
who has been a nominee for the
prestigious CFO Awards in both
2015 and 2016. Ayanda explains
that Shabeer has been on a huge
drive to ensure the entire depart-
ment and all its agencies have
clean audits, through clean audit
implementation plans.
We take all the challenges and
findings from the audit that were
raised by the Auditor-General
previously and come up with a
strategy plan of how to resolve
those issues, explains Ayanda,
who was presented with this chal-
lenge when she joined the NCR
towards the end of 2014. I had
four months to achieve a clean
audit, so I had a plan and with
my team we set about resolving
things. I must say, getting buy-in
from your colleagues at exec level
really helps. They supported the
plan from beginning to end.
Ayandas role includes oversee-
ing the financial health of the
organisation and ensuring that
it complies with all the financial
management-related legisla-
tion, as well as overseeing supply
chain management and IT. A
firm believer in the value of edu-
cation, she is currently doing a
Postgraduate Diploma in Forensic
Auditing and recently applied
at Unisa for an undergraduate
degree in law (LLB).
How did you achieve a clean
audit in your first year?
There were findings that related
to asset management, so one of
the systems I implemented was
an automated system to elec-
tronically account for assets
previously accounted for manu-
ally. With IT, I was instrumental in
fast-tracking the implementation
of the ICT governance frame-
work as per the Department of
Public Service and Administration
(DPSA) guidelines. That allowed
us to get a clean audit.
Paying invoices within 30 days
can also be a challenge in the
public sector. We have been able
to get it right, because we have
implemented a system that sets
the payment period to 20 days, so
all of our payments are made on
time. I have also tried to upskill
the team, because some of the
challenges have included limited
skills in the team. So, I have made
some informal training available.
I am a very hands-on team leader
and engage with even the junior
members of the team.
Stand your
ground, knowledge
is power and
never compromise
your values and
principles.
CFO MAGAZINE CFO.CO.ZA 47
PUBLIC SECTOR

Who is Ayanda?
I am a Pisces, so I love to
dream and to project the
future. At the same time, I am
an introvert and indoor person.
During the week, it is NCR
time but over weekends I like
spending time with my two
daughters (15 and four) and
son (five). On Sundays, we go
to church, as I am a Christian
before anything else. I like
reading and I have also joined
my daughter in playing chess.
She is a chess champion and
she is giving me lessons.

What are the most valuable les-

sons you have learnt?
Stand your ground, knowledge is
power and never compromise your
values and principles. Once you
appreciate a piece of legislation,
you will be able to walk the talk.
That is very important, because
people dont do what you say, but
they learn from how you do things.

In the public sector, we do see

values being put under strain or
compromised, but whatever I do
has to be informed by legislation.
Fortunately, finance, procure-
ment and IT are in a space that
forces us to comply and adhere
to standards. Whatever I procure,
goods or services, is informed
by prescribed legislation like
the PFMA or National Treasury
regulations.

What accounting conundrums

did you encounter in your pre-
vious role as GM Financial
Accounting at Johannesburg
City Parks & Zoo?
At the Zoo we were dealing with
the parks and open spaces, and
management of the animals.
What was so interesting about

48 CFO MAGAZINE CFO.CO.ZA


it, was that our assets were not
only desks, chairs and comput-
ers, but also the zoo animals.
The curators had to school me
on how to account for the ani-
mals. For instance, what is the
depreciation for the lions and
the reptiles? When these ani-
mals give birth, how do I account
for the babies? What is the
market value of the babies?
Understanding the operations
was very different!
What is your approach to risk
management?
Everything I do is informed by
risk. The NCRs approach is that
it takes risk management very
seriously. Thus, on a quarterly
basis, my team and I identify
risks and come up with risk mit-
igating controls. We have a risk
register where we look at the
strategic and operational risks
and monitor them, and come up
with ways to eliminate them.
What is your personal style of
leadership like?
I am very passionate about
empowerment. Im a nurturing
leader. I believe I am where I am
because someone believed in me
and empowered me. How do I
build capacity? The budget is an
issue, so we might not go for for-
mal training, but I encourage my
team to study and we also have
informal capacity building ini-
tiatives. I also have an open-door
policy because I want to get the
best out of each individual.
What do you most enjoy about
the CFO role?
As a CFO, I get a birds eye view of
the entity and I am involved in the
strategy development, as well as
operations. For me to allocate bud-
get I need to understand the needs
of the organisation. I am privileged
to be a CFO, because I work hand
in hand with the CEO and other
executives, as what they do also
has a financial impact.
The CFO is not always the most-
liked person because you are the
one cracking the whip when it
comes to finances. I know I have
been nicknamed Pravin Gordhan,
because I always say there is no
budget. It has been challenging
to communicate this and make
the business understand that,
at the end of the day, we need
a clean slate as far as financial
management is concerned.
How did you come to pursue a
career in the finance industry?
Initially I wanted to be a law-
yer. The OJ Simpson case really
sparked an interest for law. My
issue was that I stutter. I asked
myself, what could be another
career where I wont be doing
as much talking, but which I
could do well? In 1996 I was
in Grade 11 and came across a
career guidance book donated to
our school by Anglo American. I
paged through it and my eye fell
on the CA(SA) qualification. It
was more about numbers than
talking. I decided this was what I
was going to do. I didnt even do
accounting at school, I did sci-
ence subjects. It was difficult but
I dont have any regrets.
I recently applied at Unisa for an
LLB because I still want to do law.
I am so passionate about legis-
lation and compliance. So, I find
Initially I wanted to
be a lawyer. The OJ
Simpson case really
sparked an interest
for law.
PUBLIC SECTOR
myself reading a lot of that. I was
made to be a lawyer.
As a normal girl from Umlazi
township who dared to dream,
did you have any role models
growing up?
My role model was Nonkululeko
Gobodo the first black female
CA. I got to know about her when
I was in my first year of varsity.
Before varsity I wasnt sure what
I wanted to be. My grandmothers
were my role models in their own
way, and most of the learning
and values, and who I am today,
is because of them.
My maternal grandmother was
not educated at all and has never
worked in her life, but what I
learnt from her is invaluable. I
learnt reading at an early age,
because I didnt know then that
she couldnt read. She pretended
she couldnt see, so I used to read
the Bible to her. She belonged to
stokvels and used to ask me to
check things for her. She taught
me responsibility at an early age,
although I wasnt aware of that
at that time. She was a dress-
maker and I would go with her to
sell the dresses and would be her
money collector. That helped me
to ensure I was wise with money,
which has helped me in this
career. I was a mini-entrepreneur
through my grandmother, with-
out being aware of it.
My paternal grandmother
was a nurse and I saw ambi-
tion through her. One day she
told me I needed to do better
than her. She said I couldnt be
a nurse, so I said I would be a
doctor. She sent me to a good
school, a Catholic school, paying
my school fees with her retire-
ment money. She was educated
and taught me the importance
of education. l
CFO MAGAZINE CFO.CO.ZA 49
BANKING

50 CFO MAGAZINE CFO.CO.ZA


Standard Banks Sean Berrington shares agility secrets for finance
Billion dollar IT CFO
You would be surprised at what you can achieve with the right mindset, collaboration
and initiative, says Standard Banks Sean Berrington in a candid conversation about
change, agility, communication style, core banking transformation and his new job as
CFO for Group IT. By Ebrahim Moolla
S
ince mid-2016, Sean
Berrington is the finance
boss of a billion dollar IT
organisation. Add to this
his intimate experience
with agile ways of working, and
the CFO for Group IT at Standard
Bank might just be the ideal per-
son to talk to about the crossroads
of threats and opportunities that
technology and finance bring to
banks and finance professionals.
It was supposed to all be very
different, with a younger Sean
telling his friends that they
should question his sanity if
he would ever end up in a core
finance role. What happened in
real life was that Sean became
a chartered accountant, learnt
about the banking environment
at PwC and then joined Standard
Bank to spend three formative
years as head of finance for its
(in)famous core banking trans-
formation. After another three
years as finance head for IT at
Personal and Business Banking,
Sean was promoted to become
the billion dollar IT CFO of today.
Core finance. Really?
Throughout my articles I never
dreamt of being a CFO. In fact
there are a few occasions that I
remember distinctly telling my
mates that I would have to have
my mind read if I ever ended up
in a core finance role. In the early
days I honestly didnt know where
or what I wanted to be and as time
went on I set my career ambi-
tions of becoming a partner in the
broader IT consulting sphere.
On returning to PwC South
Africa after a few years abroad, I
was given the opportunity to lead
the Standard Bank IT consulting
relationship, which, after a series
of engagements, culminated in
my being appointed by the bank
as the Finance Head for the core
banking programme. One thing
led to another and, on the jun-
gle gym that has been my career
I have ended up as the CFO for
Group IT. Reflecting on the short
time I have had in this role so
far, I am convinced that I have
taken the right step. I couldnt,
however, have projected the jour-
ney ten years ago. It is the right
place for me and I believe that
the combination of deep IT and
finance skills is invaluable to
being an effective CFO for IT.
BANKING
From consultant to corporate:
a complete blur
As a consultant you often have
the luxury of making recom-
mendations, issuing your report
and then disappearing until the
next engagement or report, never
really having to deal with the
long-term implications of your
findings or, in the case of core
audit engagements, having to
deal with the implementation of
the recommendations.
With this in mind, the first year
of my being in a corporate was a
complete blur. Outside of the fact
that I now had to deal with the
implementation of my own rec-
ommendations and didnt really
get this finance thing, I was also
delusional as I thought I knew
the bank. This being said, I had a
great set of sponsors in the bank,
I had a pretty good understand-
ing of what good looked like and
I had the will and determination
to get this right. A few mistakes,
reprimands and near misses
later we got it right.
We built a small team from
scratch with people from non-tra-
ditional banking environments,
CFO MAGAZINE CFO.CO.ZA 51
BANKING

we drove the outcomes as best as

we know how not prejudged on
existing organisational mindsets
and started seeing the benefits of
our investments. Despite the fact
that I have been in the bank for
a few years, the team still adopts
some of these principles today.

How to replace a banks core

Those of you close to the bank-
ing industry will know that
Standard Bank started its core
banking replacement programme
a few years back with the intent
of digitising and replacing its leg-
acy processes, of which some
were more than 40 years old,
with a new, agile platform,
namely SAP Core Banking.

Being at the helm of the finances

for the programme was tough.
Besides the operational require-
ments to ensure that we stayed
abreast of the finances for the hun-
dreds of resources working on the
programme, we were also required
to develop a robust forecasting
model, develop a robust business
case supporting the programme
and ensure that the business case
was appropriately represented in
the strategy. In addition to this, I
was expected to actively participate
in the operational management of
the programme, giving me great Seans lessons from the core banking
insights into the juncture between
IT, business and finance.
transformation
1. It is impossible to manage every component of a mega pro-
Through this process, I also
gramme. Make sure your processes are robust and you have a
assumed responsibility for design
strong team to support you.
of the financial processes within
2. Make sure you have a key set of principles and stick to them. You
the core banking programme,
cannot remember a different set of principles for every scenario.
allowing the opportunity to
3. Because of the above and the guarantee of consistency it will
design frictionless financial pro-
bring, do not be scared to ask tough questions.
cesses from the bottom up, a
privilege very few people have
the opportunity to do.
who walked in and made sweep- ment to me you know, Sean, that
What has happened since your ing changes. In fact, in one of the is how it is. The new broom will
promotion? first few days I had in the role sweep clean' and this comment
I never wanted to be that guy a staff member made a com- has stuck in my head. Influenced

52 CFO MAGAZINE CFO.CO.ZA


by this I have undertaken my
role with the following five prin-
ciples in mind: lead by example,
take the team along on the jour-
ney with you, be willing to get
into the detail, challenge and be
challenged, and say it like it is.
Resistance to change at the old-
est bank in town
My philosophy is that if you need
to do something, just get it done.
A lot of people in any organisa-
tion often express frustration
at their inability to influence
changes, but you would be sur-
prised at what you can achieve
with the right mindset, collabo-
ration and initiative. I have not
found Standard Bank to be at all
resistant to change, in fact it is
very change resilient given all
the ongoing change within the
organisation. Sure, Standard Bank
is a complex organisation with
ingrained legacy systems that
make effecting change harder, but
sometimes all it entails is asking
the right questions, owning the
problem and then driving through
to resolution.
Balancing operations, IT and
independent finance teams
You cant be an effective CFO if
you dont know your business.
When a tough problem pops up,
it is important that you under-
stand the context, the drivers
and the levers that can be pulled
to get it resolved. My deep under-
standing of IT in my role allows
me to recognise the problem, the
influencers and opportunities
for resolution. IT is a black box
for most people, but I am able to
harness my skill set to hold con-
structive conversations that lead
to investigation.
IT does excite me and I want to
get involved, but as a CFO I always
have to have a degree of impar-
tiality and independence. With
this context in mind, I encour-
age my team to get engaged and
understand the business of IT. I
encourage them to get into the
work and to work with their busi-
ness partners to solve problems,
but regularly remind them about
the need to be independent. It
is important that they never get
to the point where you have to
manipulate a number or feel
uncomfortable reporting a num-
ber, because then you know you
have crossed the line.
Ringing the changes agility
Standard Bank is fundamen-
tally transforming its IT function.
Moving from a stoic, com-
mand-and-control type function
to an agile, self-governed, engi-
neering-led organisation. At the
heart of this is a cultural trans-
formation, the implementation
of the Scaled Agile Framework
where more than 2,000 people
have adopted agile ways of work-
ing in feature teams numerous
technical transformations and the
need to achieve certain afford-
ability targets.
Through this process Standard
Bank has been able to improve
the cadence and speed of deliv-
ery of change, has seen significant
improvements in employee
engagement and has seen
improvement in the cost of IT
delivery. While not the primary
intent, Standard Bank has also
received numerous accolades and
recognitions in the process, with
Standard Bank often being refer-
enced in conversations as being
pivotal to the transformation of
IT in South Africa.
Ringing the changes commu-
nication
In the early days of the Group
IT transformation it became
BANKING
sean@home
I have a grossly overspecced
fibre line at home and enough
connected devices to em-
barrass most people. When I
am not trying to get the darn
thing to work, I am working on
my home, going for a run or
spending quality time with my
wife, daughter and dog.
clear that, unless the finance
team transformed as well, we
would become irrelevant. As a
result we needed to radically
relook at how we run our staff
engagement and processes.
Through this we adopted a more
inclusive communication style.
This is fundamental in all we do.
Not only are we more open and
communicative as a team, but we
are also more inclusive in how
we run certain of our processes,
for example our month-end
process consists of a series of
stand-ups. Through this we
have seen greater accountability
for numbers, more predictability,
less surprises and more stable
numbers sooner.
We have also visualised our work
through the use of Kanban walls.
This is a great way to visualise all
tasks in flight, prioritise and ensure
accountability. This way the actions
have collective ownership and
there is clear transparency of when
things are not on track. This has
been great in ensuring the team
owns the outcome.
As a result, we are also starting
to see greater staff engagement
and more reliable and predict-
able numbers. l
CFO MAGAZINE CFO.CO.ZA 53
BANKING

Three unavoidable challenges facing banks according to futurist Keith Coats

Adapt or die
The banking sector is under siege. From regulatory restrictions to new entrants into the
financial service sector and from inherent IT legacy constraints to increasing customer
expectations, the industry is facing some very real and present challenges. Futurist Keith
Coats, director at TomorrowToday Global, says it is time for banks to face their demons.
By Keith Coats

W
hy bank at all? It is
the kind of question
that can easily be
dismissed with con-
tempt, but it is one
that shouldnt be. It is the kind
of question that invites us to
challenge entrenched assump-
tions that underpin the banking
industry. In order to adapt, chal-
lenging such assumptions, is
essential. Several years ago, the
Economist suggested that real
innovation was not about prod-
uct and service, but rather it
had to do with the ability to
change ones business model.
Banks will need to rethink their
traditional business models.
In order to be futurefit and to
meet the demands embedded
in the future, banking will need
to adapt. Banking will need to
change the way things are done
and will need to bring the deliv-
ery closer to the rhetoric.
Here are three challenges banks
are facing that will determine
their future.
1. The digital revolution
The pressure from both custom-
ers and regulators means that
banks simply do not have an
option but to embrace digitalisa-
tion. The growing open banking
initiative, as it has been called,
means that smaller rivals to the
big banks both smaller banks
and financial technology firms,
will be able to build services
onto existing customer accounts.
What this means is that these
smaller, more nimble com-
petitors will be able to extract
financial value and service ben-
efits from existing clients of the
big banks.
The account holding bank will
incur all the costs of maintain-
ing and keeping that account,
but the competition will extract
the benefits of leveraging that
account. The complexity and
antiquated nature inherent
within big banks makes it diffi-
cult to compete with this type
of competitor, but the only real
choice bigger banks have is to
either partner or compete. Such
partnerships point to the future
and will be the means whereby
big banks can enter that future.
Of course, the smartphone, smart
devices and wearables are the
weapon of choice for the cus-
tomer. Many new banks are
operating on a digitally only
platform and this type of ser-
vice appeals to a generation that
inhabit such platforms. Banks
simply have to embrace digital-
isation and their capacity to do
so will ultimately determine their
cost base, risk management and
profit margins.
2. Rebuilding trust
Last year Reuters reported that
since the economic crisis of
2008, the top 20 global banks
have had to pay approximately
$235 billion in fines. A cultural
change, greater transparency and
accountability are desperately
needed. Banks are slow to grasp
this need and are even slower to
innovate towards correcting this
legacy constraint.
In a survey on public trust in
companies by sector, the finan-

54 CFO MAGAZINE CFO.CO.ZA


cial services sector rated stone
last, being only trusted by 51 per-
cent of respondents. Companies
in the technology sector fared
best with a 74 percent rating.
Public trust is hard won and eas-
ily lost. Banks seem to not fully
understand the public sentiment
that holds them in contempt due
to issues ranging from poor ser-
vice delivery to unscrupulous
charges and distorted executive
pay-outs. Across seven met-
rics of the publics perception of
the most important trust-build-
ing attributes (such as: treats
employees well, listens to cus-
tomer needs and feedback,
transparent and open business
practices and takes responsi-
bility), banks failed to match
expected performance in every
single category!
In Capgeminis World Banking
Report 2016, it was found that
90 percent of banking executives
acknowledge the need to inno-
vate, especially in the face of
the rising threat from FinTech.
However, performance measures
reveal a significant gap between
this acknowledgment and the
actual ability to implement the
necessary innovative steps and
process. The problem is not only
the inherent inability to inno-
vate but also the low trust base
that meets any such innovative
initiatives from big banks. Banks
are in desperate need of rebuild-
ing public confidence and trust,
yet many of their pronounce-
ments and actions do not seem
to acknowledge this reality.
3. The adoption of big data
Big data programmes will enable
banks to not only be smarter in
personalising their service and
product offerings but also in man-
aging their risk. There are several
internal barriers to big banks
BANKING
adopting big data, including cur- even straightforward in a sector
rent limitations concerning data weighed down by both regulatory
integration capacities, a lack of as well as systems legacy issues.
in-house tools and skills, a lack of However, in the face of fast-mov-
corporate vision and understand- ing competitors who are more
ing of how important big data nimble, agile and perhaps hun-
is to the future, and the costs of gry competitors who are simply
investment required to install taking the banks most profitable
big data capacity. Some power- customers and who understand
ful external forces are driving the new platform that is block-
the need for banks to incorpo- chain, the challenge facing banks
rate big data projects. These and banking executives is urgent
forces include compliance, regu- as it is unavoidable. How these
lation and legislation, customer leaders and institutions respond
demands and broad generic eco- to these challenges will deter-
nomic pressures. mine their future in fact maybe
their entire existence. l
Big data is already being uti-
lised in governance policing as
was evident in the LIBOR and
FX rate-rigging investigations.
Big data is reshaping the medi-
cal and pharmaceutical sectors
through the sheer capacity of
analysing information, mak-
ing reliance on human analysis
and advice obsolete. Big data,
AI and the technology to deliver
this seamlessly to the con-
sumer will be what shapes the
future of banks and the finan-
cial sector. Some of this is
still a way off, which per-
haps makes it easy to be
complacent or lazy in
understanding both the
threat and opportunity.
Nonetheless, it poses a
very real and present
danger to those who
choose not to look
out the window or
who believe that
yesterdays logic will
be sufficient to meet
such turbulence.
Of course there are
many other challenges
that banks will need to
confront in order to be
futurefit. None of what
needs to be done is easy or
CFO MAGAZINE CFO.CO.ZA 55
56 CFO MAGAZINE CFO.CO.ZA
 BANKING

N26 CEO Valentin Stalf reveals the secrets behind one of the worlds hottest FinTech startups

Building a bank
from scratch
We have debunked the myth that banking is very complex, says Valentin Stalf,
co-founder and CEO of mobile bank N26, perhaps Europes best new bank on the block.
We chatted to Valentin about the practical steps an entrepreneur needs to take to turn
a brilliant idea into a thriving business. Money or even licensing are never the problem,
he says. Your success depends on your business model, your team and the customer
feedback you generate. By Jol Roerig

B
anking is like Formula
One. Valentin Stalfs
observation comes a day
after he has returned
from the famous Monza
race track north of Milan in Italy,
where N26 was invited as the
Fast Companies Series partner
by British Formula One racing
team Manor Racing. Of course
it was very cool to see our logo
there, Valentin says with a broad
smile. But when you are on the
grid and in the pit lane, you also
realise Formula 1 is a big myth.
Just like banking, people think
it is really complex. When you
get closer to the action, you real-
ise it is a group of normal people
working on cars.
Besides N26, the people behind
trendsetting apps Airbnb and
Shazam were also invited to the
race, with the logos of the three
successful startups plastered on
the rear wings of the supersonic
vehicles of Pascal Wehrlein and
Esteban Ocon. For Valentin, it
was proof that his 2013 startup,
now one of the fastest grow-
ing retail banks in Germany, is
among todays best entrepre-
neurial ideas.
Simplicity is the key to the suc-
cess of the N26 app. The N26
team spends a lot of time work-
ing on algorithms that learn
with our customers, enabling
the app to automatically classify
spending into relevant catego-
ries. The app includes popular
features like cash withdraw-
als at retailers (CASH26) and
money transfers via SMS or email
(MoneyBeam). In the long term,
we build a smart bank to help
our customers to find the right
financial product or even advise
you to buy a flat rather than to
keep paying a landlord. We can
help people by showing them
the opportunities that they have
and what they are missing out on
in a complex jungle of financial
products.
Extreme customer focus
Any business, whether brand
new or 100 years old, will say
it focuses on customers. As the
Uber or Spotify of banking and
to even set them apart from
other neobanks N26 takes this
to the extreme; it only takes eight
Your success
depends on your
business model,
your team and the
customer feedback
you generate.
CFO MAGAZINE CFO.CO.ZA 57
BANKING
minutes to open an account. For
us it is about the execution and
making people really love the
product. On average, people log
into the app at least every second
day. That engagement provides
many new opportunities.
A massive game changer for N26
came on 26 July 2016, one-and-
a-half years after the product
launch, when it was awarded
its own banking licence by the
Federal Financial Supervisory
Authority (BaFin) and the
European Central Bank, allowing
it to operate separately from other
financial institutions across the
whole of the European Union.
Once again, simplicity was the
secret. Valentin proudly explains
how, contrary to common belief,
you "don't need an army of consul-
tants, a battery of expensive tools
and decades of experience" to
comply with banking regulations.
Read the law
There are a lot of things that
you dont need, says Valentin.
We figured out that, when you
are a small business, like us, and
have the right IT infrastructure
in place, you dont need most of
the commonly-used, expensive
software, which takes half a year
to install and requires a staff of
20people to maintain. The most
important thing is to be focused
on what is needed to comply
and sometimes that means to
rather read the law than listen
to consultants.
As a startup that challenges
the old ways, even the old ways
of complying with regulations,
a very good relationship with
the regulator is paramount,
says Valentin. To do it differ-
ently you need to be very close
to the regulator. And you need
58 CFO MAGAZINE CFO.CO.ZA
to be very operational in what
you are doing. Often the discus-
sion around regulations is very
abstract, which allows for so
many companies and consul-
tants to chip in. The main thing
is to understand what the regula-
tor wants.
The only way to eat an elephant
is one bite at a time, which is
why N26s adventure started as
an unassuming debit card for
teenagers and an app for par-
ents to control their offsprings
pocket money.
We looked at the consumer side
of banking and recognised how
slow the industry is in Germany
and Austria, explains Valentin,
who grew up in Austrias capital
Vienna, studied in Switzerland
and worked for Berlin-based
Rocket Internet, which spawned
many of Europes brightest
FinTech entrepreneurs. Whereas
Rocket focused on the B2B
space, Valentin started seeing
opportunities in the way banks
interacted with their clients.
Those established players are
just burning money and their
fee structure is very complex. At
the same time, five of their advi-
sors will give you five different
answers to one simple question.
Teenagers
With his friend Maximilian
Tayenthal, Valentin launched
Number26, as the startup was
initially called, partnered with
Germany-based financial ser-
vices company Wirecard, and
rapidly grew a base of 200,000
excited users. In the beginning
building our own bank sounded
so big, Valentin admits. That
is why we first started with a
pocket money solution for teen-
agers and went into a test phase
with that. Teenagers received a
prepaid MasterCard and both
parents and kids had access to
an app to have a clear overview
of the spending.
As entrepreneurs often find out,
a good idea runs away with you.
People were using it for them-
selves, not for their kids. We
received many calls from custom-
ers saying they wanted to use the
app and the card for themselves.
As visionaries, Valentin and
Maximilian were not taken
entirely by surprise. Building
a bank had always been on our
minds. From a technological side,
it is not completely different. The
product we have now is very sim-
ilar to what we had for teenagers:
a card and an app that sends
push messages. We had also
already established the online
signup process. It is very similar
to our key selling points today.
For me personally,
the approval from the
traditional regulator
means the world.
Banking licence
Once the feedback came pour-
ing in, the next goal was their
banking licence, which allows
N26 to widen its platform from
payments to savings, credit and
investments all from the same
app, but sometimes powered by
partners. The banking licence
changed the rules of the game.
For me personally, the approval
from the traditional regulator
means the world, says Valentin.
It means that we are able to be
disruptive in an industry that is
a thousand years old. Existing

banks assumed licensing was too
big a hurdle for a startup and we
proved them wrong.
It also debunked the myth that
banking is too complex for new
entries, says Valentin. You
have to be close to consumers,
but very few traditional play-
ers understand what matters
for digital natives when it comes
to mobile. Bigger banks are all
organised in multiple layers and
a lot of unnecessary complex-
ity is created. We saw it during
the financial crisis, where no one
understood what was going on.
As a customer-facing business,
your focus needs to be on a spe-
cific problem that the customer
has and how to solve that. It is
simple. Many traditional banks
use the heavy regulations as
an excuse to not be innovative.
For us, it is because we have the
licence that we can be much
more innovative and offer cus-
tomers something more.
N26s fast ascent in Germany
and Austria has been made a
lot easier by recent changes
in the law that allow for the
use of video chat in Know Your
Customer (KYC) processes
enabling customers to have their
identification verified without
physically having to meet with
an N26 employee. So far N26
has launched in France, Greece,
Ireland, Italy, Slovakia and Spain.
While its banking licence is valid
in the whole European mar-
ket, associated regulations like
KYC still prevent rapid expan-
sion towards a borderless bank,
says Valentin. The vision of the
EU is great and, fundamentally,
the law is there that I can pay
in Austria with my account reg-
istered in Germany, but some
companies are still guilty of
IBAN-discrimination. And under-
lying regulation can still be very
country-specific.
Global bank
Valentin is quick to answer yes!
when asked if a viable global
bank can be started from scratch
within ten years. But for now,
the focus is on Europe. We have
only a little over 200,000 custom-
ers at the moment. What I have
noticed is that banking needs
around the world are not depen-
dent on which country you live
in, but rather what your lifestyle
is. It doesnt matter if you are in
Europe, the United States or Asia.
You might have different appe-
tites for investment risks, you
may use a card or app more or
less, but you still want products
like cashless payments, credit
lines and investments. There are
differences, but basic banking
needs are the same. But does our
management have capacity to go
into the US and China now? No,
not at the moment.
But what about security, isnt
that something big banks have to
pour millions of euros into? Isnt
that hard to match for a startup?
Valentins simple answer is that
the investment does not need to
be matched to reach a superior
security level. Our advantage is
that our system was built in 2015
and 2016, whereas a lot of play-
ers are using systems that are 20
years old. If you bought a car 20
years ago, it will also not be as
secure as a new car you buy now
no matter how well you have
maintained it.
It brings up the classic FinTech
question: are banks going to die?
Big banks have such a high mar-
ket concentration. It is hard to
imagine they will completely dis-
appear, but there will be a big
shift in market shares in the next
BANKING
Bankers of the future
will be developers,
designers and risk
modelling people
instead of personal
advisors.
ten years. Bankers of the future
will be developers, designers and
risk modelling people instead of
personal advisors, Valentin pre-
dicts. It is hard to transform
with 100,000 employees, but the
big banks Deutsche Bank has
27 million customers should
be able to leverage their exist-
ing customer base. If you have so
many customers, you can do a
lot of great things.
Product market fit
With so many FinTech entrepre-
neurs vying for fortune and fame,
Valentins thoughts on the way
to develop an idea into a success
provide a lesson for all. We lost
the most time ourselves because
we started with the product for
teenagers. For us that step was
necessary, but it also meant
our aim was lower and we were
happy with ten new customers a
day, while we now register over
1,000 new customers on a good
day. If I could do it all over again,
I would spend more time on the
product market fit before starting
the company.
Launching an MVP a minimum
viable product is much harder
in FinTech than in other indus-
tries, because there are so many
regulations, says Valentin. It is
hard to start collecting proper
feedback on user experience, if
you do not go through all the
licensing steps, which requires
CFO MAGAZINE CFO.CO.ZA 59
BANKING
a lot of upfront investment of
time and money. That is often
the problem, says Valentin.
People have an idea, but no
proof that others would use it.
For example, if you ask anyone
if it would be cool to transfer
money anywhere in the world
with one click, everyone would
say yes that is cool. But how do
you get a critical mass? Where is
the business model?
A sound business model with
margins, which shows the com-
plete picture, is a crucial start
for an enterprise and one that
quite often gets skipped over too
quickly by overenthusiastic entre-
preneurs, says Valentin. Then it
is also crucial to get honest feed-
back from customers. If I ask my
friends, they will all say it is great
but nobody will buy it, so you
might need to develop your idea a
bit further towards an MVP, with-
out going the whole way. Once
There is so much
money with venture
capitalists and they
all search for the
best teams.
African FinTech Awards 2017
The pitches and the festive ceremony of the African FinTech Awards 2017 take place on 12 October 2017, during
the first day of Finance Indaba Africa in the Sandton Convention Centre. Meet 400 hand-picked entrepreneurs,
bankers, investors and advisors, demonstrate thought leadership, extend your network and develop your business.
Sign up for the African FinTech Awards today. www.fintech-africa.com | www.finance-indaba.co.za
60 CFO MAGAZINE CFO.CO.ZA
you have enough information,
start immediately before every-
thing is set up. The third crucial
aspect for a FinTech firm is the
regulatory side, but that you can
usually manage.
The best team
But what about the money?
Arent the investors the ones
calling the shots? Not at all, says
Valentin. Money is not the prob-
lem if you have the right team
that executes well. There is so
much money with venture capi-
talists and they all search for the
best teams.
N26 has raised more than $50
million to date, including a $40
million round recently. PayPal
co-founder and renowned Silicon
Valley investor Peter Thiel is one
of the financial backers. Valentin
warns his peers that feedback
from investors can be extremely
useful, but your business model
and the way you tackle regula-
tory issues, you have to figure
out yourself. As FinTech is a very
complex field, only some very
specific investors will be able
to give input on your develop-
ment. The majority of VCs dont
have insight to add to a busi-
ness, whereas entrepreneurs like
us spend 24 hours per day build-
ing it.
Investors can contribute use-
ful insights to market sizes, says
Valentin. It is also very import-
ant to know if they like your
team. It is never bad to get feed-
back, but you need to be the
one calling the shots and take
responsibility in the end. At N26
we always had a clear vision
and then reflected on feedback
throughout various fund-
ing rounds. Investors bought
into our vision of a disruptive
mobile bank and the first inves-
tors in the teenage product were
rewarded even though our
strategy changed dramatically.
One of the next steps is develop-
ing cool products for businesses,
which are charged extremely
high fees and get bad products
by banks, says Valentin. You
cannot open a business account
without having to pay a couple of
hundred euros.
With 2016 being a year of com-
pleting our platform and growing
from a niche player into a bank,
next year will focus on inter-
nationalisation, growth and
offering the full suite of banking
products, including payments,
financing, credit and longer loans
mostly through collaboration
with FinTech firms that are suc-
cessful in those niches. We want
to grow our customer base from
200,000 to 1 million and we want
to work with other FinTech start-
ups and the best products of
traditional players. We are not
doing this for a fast exit. We want
to build something big. l
CIMA CFO
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BANKING
After the financial crisis: six questions for Citibank SA CFO Nico Botha
Peel back the onion
Global political and economic ructions mean uncertain times for the banking industry.
We chatted to Nico Botha, the well-travelled CFO of global banking behemoth Citibanks
South African operation, about his experiences abroad, transition and the challenges the
industry faces in 2017.
N
ico Botha has been
a chartered accoun-
tant since 2005, but
chose a different
career path than most.
Together with his wife, he relo-
cated to London in January 2007
and started his career in bank-
ing. After controllership roles
at Goldman Sachs and Credit
Suisse, and an accounting policy
job at UBS, Nico joined Citigroup,
the company that would eventu-
ally bring him home.
1. You worked out of London for
many years. What did your role
for Citi entail?
I joined Citigroups Accounting
Policy team in July 2011, with a
remit to widen the IFRS knowl-
edge across the bank and
develop formal IFRS account-
ing policies for the group. In
April 2014, I was appointed the
head of Accounting Policy for
Europe, Middle East and Africa,
covering all Citis businesses
in that region. I was leading a
team responsible for providing
technical accounting guidance
under both US GAAP and IFRS
for new and complex transac-
62 CFO MAGAZINE CFO.CO.ZA
tions, new accounting standards
implementation as well as pro-
viding input and comment on
proposed new standards to
the International Accounting
Standards Board (IASB).
2. What key lessons did you
take away from your experience
there?
I arrived in the UK about 14
months before the 2008 finan-
cial crisis began, so most of
my career in the UK was post
the crisis. Although there were
incredibly uncertain times during
the crisis, it was very exciting
from a career point of view with
ample opportunities to learn and
develop. There were so many
unprecedented issues which
arose, that one had to develop a
creative way of thinking in order
to find solutions.
A key lesson that I took away
from my experience in London,
and especially during the heights
of the crisis, was that in the most
challenging of times, when faced
with the greatest adversity, most
great leaders I have encoun-
tered have the ability to stay calm
and collected. Another lesson I
took away from my experience in
technical accounting is to fully
understand any issue that arose,
to peel back the onion as some
folks would say. Developing an
approach of fully grasping a topic,
seeking the root cause of an issue,
coupled with a questioning and
investigative mindset, has served
me well in my career thus far.
3. What has the transition been
like in returning to South Africa?
It is really good to be back. South
Africa is such a great country,
and despite all the negative pub-
licity that sometimes dominates
the papers, there are so many
opportunities. The people are fan-
tastic, with so many smiling faces
around. I sometimes think that
people do not realise how fortu-
nate they are to be living in South
Africa. I deem myself fortunate to
have been able to gain that per-
spective from my time overseas.
The transition has been fairly
easy, as in a way it is coming back
home, with the added benefit of
continuing my career with an
organisation I am familiar with,
albeit in a different role.

4. What are the key differences
between operations in London
and locally?
The only key difference is
that the local operation of the
South African franchise is much
smaller than London in terms
of employees. There are approx-
imately 9,000 employees in the
UK, versus approximately 300
locally. What I appreciate about
only being about 300 local staff
is that one feels more intimately
involved with different aspects of
the local franchise and relation-
ships with other colleagues feels
more personal.
5. How do you view the local
banking sector?
Established, sophisticated and
safe. South Africa has the ability
to produce great talent and that
certainly benefited. The banking
industry over the years to reach a
level of sophistication that com-
petes with the best in the world.
Banking regulation in South
Africa is also at the forefront and
certainly contributes to establish-
ing a safe banking sector, with
South Africa being one of the first
countries to fully adopt IFRS as
well as implementing Basel 3 for
prudential banking supervision by
the South African Reserve Bank.
BANKING
6. What developments are you
keeping a close eye on in 2017?
Political and economic uncer-
tainty in South Africa will remain
during 2017, and may have a
significant impact on the local
banking sector. A potential down-
grade of South Africas sovereign
credit rating remains a risk. There
continues to be developments in
the regulatory space, and more
so than ever, is affecting a banks
strategy. It will be interesting to
see how regulatory requirements
such as Liquidity Coverage Ratio
(LCR) and Net Stable Funding
Ratio (NSFR) impact the local
banking landscape during 2017. l
CFO MAGAZINE CFO.CO.ZA 63
TECHNOLOGY

V&A Waterfront CFO Narriman Taliep reflects on what makes a great finance exec

IT savvy and
boardroom skills
I believe that any CFO in business today needs to embrace and get on top of technol-
ogy, says Narriman Taliep, CFO at Cape Towns bustling V&A Waterfront. We chat to
Narriman about managing for change, dashboards that tell stories and the communi-
cation skills required in the boardroom. By Kate Ferreira

64 CFO MAGAZINE CFO.CO.ZA


We are targeting growth in
excess of standard esca-
lation in a somewhat
restrained property indus-
try market, says Nariman
Taliep, explaining that Cape
Towns famous V&A Waterfront
has investedheavily into develop-
ment and bringing new tenants
and business into the district.
The V&A Waterfront is one of
Cape Towns biggest rate payers,
so it is crucial that its money is
well-watched. Narriman whose
full title is Executive Manager:
Finance and IT services at the
V&A has climbed the ranks
in the organisation over 13
years, through its three own-
ers. I audited the Waterfront
before joining them directly,
she explains. I was approached
by the then-finance execu-
tive to come across. I worked
in various roles from the days
of Transnet to the now share-
holders Government Employee
Pension Fund and Growthpoint.
It was a period of many changes
and we had to find stability at
all levels again.
That stability always had to
come with growth, but these
days that is not easy to come
by, Narriman admits. There are
not many properties to purchase
that will give you great yield. So
we aim to continue trajectory
growth while also continuing
development. We are a platform
for job creation, a key strate-
gic initiative, and we are strongly
alignedand committed tothe
National Development Plan.
Fibre installation
The finance team that Narriman
leads is centralised within
the structure of the V&A.
Everything thatis financeruns
through this team, including
reporting, she says. We are
also responsible for broad-based
black economic empowerment
(B-BBEE), insurance, rates, val-
uations, taxation strategy, and
compliance. We manage inter-
nalaudit on behalf of our board
of directors.
One of Narrimans most import-
ant portfolios is IT. This includes
the V&As single-trench fibre
installation that forms the back-
bone of connectivity and security
provision in the district, and the
extensive internal network, hard-
ware and software. She is excited
by the challenge this represents,
arguing that any opportunity to
learn especially about technol-
ogy is to be welcomed. For me,
this is the future. It is a neces-
sity, not a luxury, she explains.
So the question is which aspects
of the technology do you take on
now, and how do you manage it.
You cant stop
change or decide not
to take technological
innovations on board.
In a short time you
will find yourself
outdated.
The choice is not if, but how, she
warns: You cant stop change or
decide not to take technological
innovations on board. In a short
time you will find yourself out-
dated. Our core business remains
property and development, but
IT is an enabler. I believe that
any CFO in business today needs
to embrace and get on top of
technology. It can only add value
to a business.
TECHNOLOGY
Plan B
Narriman describes her leader-
ship style as outcomes based,
and believes that she is in the
business of creating the next set
of leaders in her division. I want
my successor to come from this
team, so I push them. I want
them to find the answers, she
says. This can be uncomfortable
sometimes, they must be willing
to live with the consequences of
their proposed solutions.
Of course, that does not mean free
rein in the finance department.
Rather, Narriman says she con-
tinues to play the oversight and
guidance role she needs to play.
Some mistakes are, naturally, not
an option, she adds. "So I always
have to know my Plan B or when
I have to step in, which items are
not negotiable, which ones can fall
over. But I do believe you need to
give peoplethe spaceand opportu-
nity to learn and make mistakes.
Creating this environment of
trust and responsibility is criti-
cal to success, and this kind of
relationship building Narriman
argues a big part of the new set
of skills CFOs need in a changing
and shifting work environment.
If you have good relationships
with your staff, your seniors,
your consultants, then you have
partnerships. You work in part-
nership towards the same end.
Boardroom skills
There are two other key skills
that Narriman believes will set
good CFOs apart in coming years.
Firstly, the ability to embrace
change change in both busi-
ness processes and in technology,
to make the most of the effi-
ciencies that result from these
changes. Secondly, Narriman
emphasises the need for robust,
dynamic communication skills
CFO MAGAZINE CFO.CO.ZA 65
TECHNOLOGY
in the boardroom. This is not
about talking to people in the
traditional sense, but rather how
we communicate business infor-
mation in new and different
formats, she says.
When you look at reporting, you
need to consider the value you
are delivering. How do you reflect
in the report what you are see-
ing on theground?How do we
join the dots in this business?
How does a finance dashboard
appeal to an operations person?
We need to start telling the story,
and start embracing this kind of
communication.
This flow of timely and relevant
business information is a major
concern of Narrimans not just
within the reporting structures
of the V&A, but in managing
expectations up and down the
hierarchy of the organisation. And
she believes this function should
be a focus for any CFO. I believe
66 CFO MAGAZINE CFO.CO.ZA
as CFO a big part of my role is
managing expectations, those
of the people reporting to me,
among my peers at the executive
tier, and at board level. Managing
the expectations of your board of
directors, in terms of what is com-
ing, is such an important layer. To
find yourself in a situation where
your colleagues and board dont
know what is coming could mean
your credibility.
BAT and PwC
This foresight and insight will
come from a switched-on team
too. Narriman will be looking
for more analytical skills within
team members, for people who
can see beyond the numbers.
Yes, we have a core business, but
we must also understandfoot-
fall, retail sales, commercial
markets, why people are coming
to the V&A, and why companies
like BAT and PwC prefer the V&A
as their office location, she says.
A big part of my
role is managing
expectations, those of
the people reporting to
me, among my peers
at the executive tier,
and at board level.
We need to know what they,
our tenants, are looking for, and
where theirbusinessesare going.
We need to put in the extra effort
to understand what is happening
in the markets, what is chang-
ing politically, and what it means
if forex fluctuations are increas-
ing. I want to be surrounded by
people who think with me at this
level. This is where our value is
as a finance team.
Having spent much of her work-
ing life in an organisation brings
with it considerable institutional
knowledge, but it remains a place
of learning for her, and that she
says is one of the reasons why
she has always stayed.
With all of the changes through
the years here,I found the oppor-
tunity in each one to grow. We
are not a small company, but nei-
ther are we exceptionally big.
This gives me exposure to dif-
ferent layers of people, and I
thoroughly enjoy this. When you
work for the Waterfront, there
is never a day where you walk
away from the office and say I
now know everything there is to
know about this role or this com-
pany. It is what you make of it,
and how you respond. That is the
platform that the Waterfront has
given me personally. l
 TECHNOLOGY

Confessions from hacker Sean Howell and Standard Bank IT chief Graham Blain

CFO Summit:
cybercriminals
target finance
Does it take a major cybersecurity breach for you to start taking hackers and online crim-
inals seriously? Or have you learnt from the corporate disasters of the past and listened
to the experts? CFO South Africa recently brought some thought leaders under one roof
to discuss the topic with a large group of finance executives.

For hackers, finance is a
significant trusted path
into organisations and, as
a CFO, you will be a target,
like it or not, said Graham
Blain, head of IT Governance
Risk and Compliance at Standard
Bank. Graham was part of the
expert panel of the incredibly
well-received masterclass The Art
of Breaking In, one of the most
popular sessions during the first
CFO Summit of 2017, which took
place on 22 February.
Sean Howell, a professional ethi-
cal hacker and managing director
of Redshift Cyber Security, was
the other expert on hand, explain-
ing that traditional information
security is about building a broad
defence, cybersecurity is really
an attacker-centric approach. It
is the knowledge of your attacker
that drives your cyberinitiatives,
he said after being introduced
by the dynamic masterclass
moderator Didi Sehume. You
can spend every cent you have
on cybersecurity and still be
hacked. The solution is to focus
your efforts. Companies should
spend money based on realistic
attacks that are likely to occur.
They need to understand hacker
tools and techniques and their
specific pathways through
the organisation.
Sean is offering his services and
IT savvy to the good guys. In a
lively lecture and demo, which
participants afterwards rated
nine out of ten, he provided some
unsettling insight and encour-
aged CFOs to start thinking like
attackers in order to best protect
themselves and their organisa-
tions. He also emphasised that no
businesses are safe from attacks
or risk, as all businesses possess
information that it vital to their
operations and thus vulnerable to
exploitation from hackers. You
have to think about what is valu-
able in your business, whether it
is intellectual property or finan-
cial information.
Cybercrime is a global threat
to any person and every organ-
isation with a digital footprint,
to the point that the World
Economic Forum puts it high on
the list of global risks every year.
In 2016, a 752 percent increase in
ransomware resulted in $1 billion
in losses for enterprises worldwide,
according to Trend Micros annual
security roundup report that was
published in March this year.
There seems to be no end to
security breaches of large corpo-

CFO MAGAZINE CFO.CO.ZA 67

TECHNOLOGY
Sean Howell
rations, which have had massive
implications for not only their
profitability and reputation, but
society as well. This is why it is
important for top executives,
CFOs in particular, to have a
sense of urgency in approaching
matters of cybersecurity.
Lazy
Although many companies
have security systems in place,
they have more vulnerabil-
ity than they know, and this is
how hackers thrive. During the
masterclass Sean called it the
trusted path, saying that it is
what attackers perceive as the
easiest way to break in. They
are quite lazy so they wont go to
where the most security controls
are. They will infiltrate systems
by getting low-level employees
access credentials to break in.
That way, when they perpetrate
hacks, it seems as if it is some-
one in the company that is doing
it. It could be done by getting the
payroll administrator, for exam-
ple. Firewalls are not walls at all.
Attackers dont look at a firewall
68 CFO MAGAZINE CFO.CO.ZA
and think, lets smash it down.
Getting logins can be particularly
easy, especially because there is
always someone in the organisa-
tion who uses a basic password,
like Password1, for example. And
to find that person, hackers sim-
ply try that password for each
employee, using LinkedIn to get
their full name and surname to
use as a username.
After explaining the basics,
Sean did a demonstration show-
ing CFOs how easily a phishing
attack worked, creating a clone
website of the CFO.co.za website,
which took all of five minutes.
During the demonstration, he also
showed how easy it was to cre-
ate macro spreadsheets which,
once clicked one, give a hacker
complete control of a particular
machine. Information on how to
do this is freely available on the
internet. There are YouTube vid-
eos on how to do this.
Enter the CFO
During the panel discus-
sion, Graham Blain, head of IT
Governance Risk and Compliance at
Standard Bank, said one of the most
important roles of the CFO in the
context of cybersecurity is to elevate
the discussion at boardroom level.
He said the fact that these issues
do not get enough attention at
executive level was exacerbated
by the secrecy. Unlike in the
US, where companies are man-
dated to disclose such security
breaches, cybersecurity breaches
in South Africa are not talked
about, which gives attackers more
power because it means they can
use the same attack on many dif-
ferent companies who may have
been able to prevent an attack by
learning from the experience of
their peers.
In the past, I was very mindful of
being accused of dispensing fear,
uncertainty and doubt, and sensa-
tionalising this issue. But, having
moved into the organisation I am
in and the role I am currently in,
I am confident that the situation
is far worse than what we portray.
 TECHNOLOGY

There is a lot of skulduggery going
on, said Graham.
World record
Graham spoke about the hacking
of the power utility in Western
Ukraine, which resulted in sev-
eral days of dropped power. After
shutting down the power, the
hackers flooded the call centre
so that there was no way anyone
could find out what was going
on. It caused untold mayhem
from a socio-political perspec-
tive, because there was no news
coming out of this organisa-
tion, as nobody could get hold of
them to find out what the situa-
tion was.
In the corporate world, similarly,
from a data loss perspective,
2016 saw the world record for
data breach broken twice by
the same organisation, Yahoo.
According to CNNMoney, the
breach saw Yahoos purchase
price drop by $350 million when
it was bought by Verizon.
The infamous breach at Target
in the US is another great exam-
ple, said Graham. The final
analysis suggested that it cost
them hundreds of millions to
remediate the situation when
they lost credit card data. Access
was through a third party: their
air-conditioning servicing com-
panys account on their network
was used to breach the entire
system. The companys entire
board was replaced and most of
the executive as well. It was an
organisational catastrophe.
When Sony was breached a cou-
ple of years ago, the company
suffered massive reputational
damage owing to the disclosure
of its payroll data, among other
things, which showed disparities
in pay that inferred significant
gender and racial discrimination.
As the finance community you
need to lean in, said Graham. This
isnt somebody elses problem. You
are executives in your organisation
and you are part of the solution to
this challenge, and it is an onerous
task. Look after your own stuff as
well because for hackers, finance
is a significant trusted path into
organisations and, as a CFO, you
will be a target, like it or not. l

Cybercrime: what does government do?

In the margins of Februarys CFO Summit, we spoke to Redshift Cyber Security MD Sean Howell
about the role legislation should play in the war against cybercrime. Here is his take.

Many South African firms still struggle with cybersecurity and a lot of it has to do with the mandate from
government. The US and European governments have a mature approach to cybersecurity. Companies are
required to report a breach if it involves critical national infrastructure and there are lots of support structures.
We havent had this in South Africa, but we are moving in the right direction with the Cybersecurity Bill, which
is inspired by our peers across the pond. The legislation will provide for protection of critical infrastructure,
support for the private sector, awareness around cybersecurity and guidance in the event of a breach. My
favourite part of the legislation is the clear increase in government effort to make cybersecurity an important
part of corporate dealings.

I hope to see a lot more collaboration, dialogue and transparency. We only hear about a fraction of attacks
because companies tend to sweep things under the carpet for fear of reputational damage. The vast majority
are being or have been hacked and just dont know about it. Dont put your head in the sand. I think we are
moving towards a society where we can freely share the indicators of an attack and help other organisations
in our sector to defend themselves.

There is an ongoing escalation in capability of attackers and the internet is becoming more insecure and more
vulnerable to attackers. Tech developments in the name of national security that intentionally make things inse-
cure in order to access terrorist networks, for instance, leave institutions open to counterattacks. The security in-
dustry struggles to keep up with these developments, let alone the organisations that need to defend themselves.
My prediction is that we are going to reach a tipping point where we see mass exploitation of everyone and
everything (including internet-of-things connected devices). I think it is going to require a robust legal, technical
and political solution to get this right and that means we all need to be talking more about this issue.

CFO MAGAZINE CFO.CO.ZA 69

TECHNOLOGY
Balancing online and physical stores: Cape Union Mart CFO Jason Wright
Bricks and bytes
The contemporary retail CFO has both bricks and mortar stores and virtual ones to con-
tend with. Luckily for Jason Wright, his background incorporates both areas of expertise
making for an ideal marriage of two disparate fields. By Kate Ferreira
C
ape Union Marts Jason
Wright took an unusual
route to the role of CFO.
Having finished matric,
Jason went into gain-
ful employment in the IT space
while his current peers likely
headed to the accounting depart-
ments of universities around the
country. Jason went on to study
information systems, and gained
experience in web development
and project management. It was
only in his mid-twenties that the
commerce bug really bit.
Through that journey [in busi-
ness and IT], I decided that a
business qualification was going
to be better for me. It was more
closely aligned with my goals.
So I converted that degree into a
BCompt at Unisa where I stud-
ied through correspondence, he
explains. I finished my articles
at KPMG, and kind of started at
the bottom again.
From there, Jason headed to
McDonalds. I looked at a num-
ber of opportunities when I was
finishing up my articles. I inter-
viewed with a travel company,
for example. McDonalds just
seemed, at the time, to be the
70 CFO MAGAZINE CFO.CO.ZA
most interesting. Jasons intu- into a more senior role, move to
ition proved right, he says. He
gained valuable insight into
franchising, and both local and
international business at the fast
food giant as the Shanduka
Group became the developmen-
tal licensee (DL) for McDonalds
South Africa.
I was then approached by
Massmart to come join them
within the finance team at
Builders Warehouse. It was a
more commercial role, more
operationally focused than my
McDonalds experience. I worked
on some very interesting proj-
ects there and I learnt a lot.As
it is part of the Walmart group,
I was fortunate enough to travel
to the US and Canada, as well as
the UK, so I got exposure to those
markets as well.
Cape Town lifestyle
It was around this time that
Jason and his wife had begun
to think about the lifestyle
they wanted, and saw a move
to Cape Town as one means
of achieving this. Fortuitously,
Jason met Cape Union Mart CEO
AndreLabuschaigne, who pre-
sented the opportunity to step
Cape Town, and join an estab-
lished South African retail brand
with over 80 years presence in
the market.
Working in retail was an appro-
priate coming home for him too,
he says. I had actually worked
as a casual in Totalsports back
in the day. I never imagined back
then that I would land up back in
retail almost 20 years later.
Retail is different from other tra-
ditional businesses, he says.
There is a lot going on. We have
about 222 stores now, and that
creates a lot of variety in the
business. There is always some-
thing new coming out, and we
have a number of chains,includ-
ing Old Khaki and Poetry,
Tread+Miller as well as our own
brands like K-Way. We also have
an online element to the busi-
ness, with all four chains online.
We manufacture some of our
own products through K-Way.
Plus, there is the import side. So,
its an interesting business, and
very dynamic.
Online sales
Jason welcomes the complex-
CFO MAGAZINE CFO.CO.ZA 71
TECHNOLOGY
ity this creates, saying he likes to
keep his mind occupied. I always
want to keep things interesting.
The online sales aspect is just
one of those challenges. At Cape
Union Mart, both the financial
and IT (including web) mandates
fall under the responsibility of
the CFO.
You do often find IT report-
ing to the CFO or finance, but it
does bring its challenges, Jason
admits. You have a split focus.
Instead of just looking at the
numbers and the strategy with
the CEO, you have to manage two
functional departments to make
sure they are running and oper-
ating effectively.
Thankfully, it is a split that is well
suited to Jasons particular skill set
and professional background. He
also sings the praises of his team,
including solid IT and finance
managers and senior teams. We
also have a treasurer to make sure
that we are covered in terms of
any currency risk or exposure.
Data driven growth
Collection and analysis of data
from both online and real world
sales is a key benefit that Jason
and the team seek to make the
most of. We obviously generate
a lot of data at point-of-sale. We
can analyse profitability down
to the product or SKU level. This
is also done on merchandising,
and on a per store or per region
basis as necessary. We can look
at turnover on a daily basis.
These reports consolidate daily
by store or chain, and feed into
Ours is not a cookie
cutter model.
72 CFO MAGAZINE CFO.CO.ZA
the Finance team, among other
end-points. It is then used for
the modelling of potential new
sites. Ours is not a cookie cutter
model, Jason says. We examine
every site on its merits. We have
a committee for that, in which
finance plays a big role.
You always have to
balance new staff and
systems with the pace
ofgrowth.
It is all part of an ambitious
growth plan that will also require
growth in Jasons team. We are
constantly looking at the capac-
ity of the team and making sure
that we have the right skills, so
that they are able to support
business. What you dont want
is an administrative brake on
growth. You always have to bal-
ance new staff and systems with
the pace ofgrowth.
Burgeoning web presence
Although the groups physi-
cal store sales still outperform
online sales, it is a growing seg-
ment, and their web portal has
to be able to support both seri-
ous online shoppers, and the
info gathering browsers who
search online but ultimately buy
in store.
Initially, people didnt expect
a lot from their retail websites,
but it is really starting to take off
now. It is performing well, Jason
explains. I think it really serves
a customer need.Customers are
more and more moving to online,
even as a research destination.
Typically, if you are looking for a
product, you start online. Also,
if you are looking for stock and
you want to know which store
to go to, you go to the internet.
We are definitely seeing massive
growth in that space. Its becom-
ing more and more of a focus
area. It is still small. I think any
retailer will tell you that, as a
proportion of total turnover, it is
still small, but definitely some-
thing we are giving attention to
right now.
To support this, Jason and his
team have also had to imple-
ment an increasingly diverse
number of payment options for
both online and physical stores.
Beyond the cash, credit and
debit cards, theyve adopted a
store card (underwritten by RCS),
eBucks, Discovery Miles, digital
vouchers, Gateway-based online
payment, and even in-store app-
based payments like SnapScan.
As a retailer, these are the kinds
of things that we need to be
mindful of. We must always look
to the future, to see where retail
is going. We need to invest at
the right time so we are not left
behind. And also not too early, so
that we are there too far ahead of
the customers.
Hot water
Cape Union Mart has an increas-
ingly connected shopper base,
who are comfortable making pur-
chases online and even via app
or mobile browser. Retailers who
are not adapting to this new cus-
tomer, will find themselves in hot
water in the future, Jason warns.
Mobile transactions in South
Africa are topping around R19
billion. Even if you exclude air-
line tickets and that kind of
thing, people are becoming more
and more comfortable purchas-

ing online. In terms of the digital
participation curve, people have
a good experience online and
they tell their friends and that
builds confidence.
But even with this growth in con-
fidence about online buying, Jason
believes the Cape Union Mart
brand heritage is one of the big-
gest advantages they have. We
are already a trusted brand, so
the propensity to buy from us is a
little bit stronger than if you have
never heard of the brand before
or they are an online only brand.
Keeping honest
Social media is another driver of
this growth. For a lot of South
Africans, the world is becoming a
lot smaller. People can see what
is going on in more developed
markets. Most people are aware
of Amazon, even if they havent
used it, and they want that expe-
rience as well, says Jason.
Local customers now have rea-
sonable expectations of a
smooth, seamless, safe online
buying experience, with the real-
world parcel delivery fulfilment
TECHNOLOGY
Online retailers are
keeping everyone
honest, often
revealing the true cost
of a product without
physical stores and
staff factored in.
to match and close the loop.
The cost of fulfilment is still a
major consideration, and is one
last place where Jason believes
established physical chains still
have the advantage on their
online competitors. As a small
online retailer competing with us,
or against groups like Foschini or
Massmart with their efficiencies
of scale, it is an uphill battle.
On the other hand, online retail-
ers are keeping everyone honest,
often revealing the true cost of a
product without physical stores
and staff factored in.So, retailers
are watching the online space,
and theyre watching us. At the
moment, the biggest threat to a
retailer is still other retailers. But
it is the customer who wins in
this competitive space. l
CFO MAGAZINE CFO.CO.ZA 73
GROWTH

CHRO SA aims to boost knowledge, network and career for HR executives

Forum for HR
leaders launched
Some of South Africas foremost HR executives shared experiences, ideas and knowledge
during the inaugural launch event of CHRO South Africa, a sister organisation of CFO
South Africa, established to help CHROs boost their network, knowledge and careers.

S
upported by the HR
management software
specialists from Workday,
CHRO SA will launch its
website and magazine
in May. There are also four more
high-level events scheduled for
HR executives this year.
Hosted by Vodacoms CHRO
Matimba Mbungela at Vodacom
Park in Midrand, the group gath-
ered on 9 March 2017 and broke
away into two separate ses-
sions, which were led by CFO
Enterprises CEO Melle Eijckelhoff
and CHRO SA manager Didi
Sehume, before enjoying dinner
and some drinks while network-
ing. Judging by the feedback
from HR directors attending,
the launch event was a mas-
sive success as CHROs feel they
have found a new, safe home to
swap notes about challenges and
opportunities.
Adding value
HR executives are increasingly
realising that the onus is on them

74 CFO MAGAZINE CFO.CO.ZA


Matimba Mbungela
to ensure they are heard by the
other executives and boards of
the companies they run, the par-
ticipants of the event agreed. In
order to ensure that critical issues
are considered by the top decision
makers in the company, HR lead-
ers have to equip themselves with
knowledge about the technical
aspects of the business and relay
people challenges in a way that
relates directly to the impact they
have on the business.
We tend to shy away from num-
Launch events par-
ticipants:
Bahle Goba-Matsho, consultant
and former ArcelorMittal HR
executive
Matimba Mbungela, CHRO at
Vodacom
Blair Mackenzie, Ericssons VP
HR Sub-Saharan Africa
Join CHRO South
Africa
Find the CHRO South Africa
group on LinkedIn and email
CHRO SA manager Didi
Sehume at dsehume@chro.
co.za to receive exclusive
invites and start benefiting
immediately.
bers, but the business language
is numbers. And thats why HR
professionals often feel like their
contributions are perceived to
be irrelevant. They dont speak
the business language. For exam-
Busi Mtsweni, HR executive
ICASA
Candice Watson, British American
Tobaccos Area Head of Talent
Anneke Andrews, Human Capi-
tal director at Deloitte
Donald Khumalo, HR director
JSE Limited
Khaya Ngubane, regional direc-
tor of HR Minor Hotels
Loshni Govender, Rhodes
GROWTH
ple, one of the key things that we
do quite well is thinking about
how we drive efficiencies in the
business and develop hard-core
metrics of what an efficiency
roadmap looks like, said one of
the executives.
The focus should be less on the
usual suspects of recruitment
and retention, an executive
added. Even though those are
also important, CEOs and CFOs
are more receptive when HR
leaders speak in terms of quanti-
fiable targets and achievements.
When you do this, it is possible
to go into the detail of what effi-
ciency statistics should look like
when the business looks at its
long-term plans.
High tech or high touch
All participants agreed that the
future of HR is digital. Basic HR
processes like payroll, employee
benefits and sick leave are becom-
ing more and more self-service
concepts. The days that an HR
executive was just there as a
mentor almost like family to
the employees are over. This is
creating a culture shock in some
organisations that are just start-
ing to implement technology for
employees," one of the roundtable
participants concluded. l
Universitys HR director
Mabore Sithole, executive head
of HR Fraser Alexander
Sheila Motsepe, vice-president
HR T-Systems South Africa
Thami Mvumbi, HR executive
Murray & Roberts Construction
Kgomotso Molobye, managing
executive HR Openserve (Telkom)
Yvette Wa Mbombo Mujinga
Malengela, HR director Millicom.
CFO MAGAZINE CFO.CO.ZA 75
GROWTH
Christiaan Engelbrechts first 90 days at Ster-Kinekor
Diary of a CFO
In November 2016, Christiaan Engelbrecht joined Ster-Kinekor as CFO, a highlight in a fi-
nance career that started at Deloitte and Vodacom. He will keep a monthly diary for CFO.
co.za to share his trials, tribulations and triumphs. This is part 1: the first 90 days.
T
here is nothing quite like
gentle rain combined
with a latte at my favou-
rite coffee shop to make
me reflect on my first 90
days in office. I smile as I revisit
in my mind that day where my
CFO journey started. Do you
want to go for a coffee? These
simple words, and the coffee
with the executive team that fol-
lowed, changed my life forever!
It is just after 7am and the shop
is still quiet; much like my first
few days. I was presented with
mountains of reports and other
reading material. The outgoing
CFO was still there and my intro-
duction to the company was only
scheduled for the first Friday
after I joined. I had time to digest
all the information. It was a very
quiet period, barring the couple
of employees who could not keep
The coffee with
the executive team
that followed changed
my life forever!
76 CFO MAGAZINE CFO.CO.ZA
curiosity at bay and popped in to
meet me. Similar to the baristas
preparing for the morning rush,
I had the space to prepare my
intellectual self.
Slowly, but surely, more and more
customers arrive at the coffee
shop. The regulars are usu-
ally first to arrive and the owner
gives special attention to each
one. My first few weeks filled up
with the regulars: site visits and
meeting the various heads of
all departments. This was criti-
cal to understanding the essence
of the company. I learnt a great
deal about operations, revenue
streams, cost structures and pro-
cesses underlying these. All of
this very important.
90 day plan
However, the true value lies in
my interactions and experiences
of the different people across
all levels and how the collec-
tive culture of the organisation
influences them. Taking the time
to meet with each department
quickly built relationships and
established credibility. It is only
a few months later that I realise
how critical these intangible ben-
efits will be to our success.
Just before the morning rush, the
floor manager of the coffee shop
calls for a quick meeting with his
staff. Even though I cannot hear
what is said, it was very apparent
that there are clearly defined goals
and complete alignment within
the team! Oh, the good old 90 day
plan... A lot has been written on
this topic, details of which I shall
not bore you with. I had my 90 day
plan! It adhered to the SMART
principals and it was very achiev-
able. I was poised to revolutionise
the finance department. Now, after
90 days, I revisited this plan and
noticed we achieved very little of
it. Why? Did I fail?
Quite the contrary, actually. The
initial goals would have demon-
strated how successful I am. It
had the energy of selfish ego. I
was fortunate enough to real-
ise this a few days after I set the
goals and shifted my efforts for
the benefit of the company and
all staff of the company. It is
not enough to know my role in
the organisation is about being
selfless, serving of others, guid-
ing and coaching. I need to live
these qualities. I need to step
out of the paradigm of all previ-
ous roles and put on a new coat.

Unfamiliar? Yes. Necessary?
Most definitely!
Way to go
The goals we did achieve in 90
days were exponentially more
beneficial for the company. We
changed the entire perception of
the finance department, bringing
finance from a keep-quiet-in-the-
corner back-office-do-not-care
area, into a strategic business
partnering function. Fully inte-
grated in operations. Our team
is now becoming the backbone
of the company, rather than a
by-product of archaic gover-
nance. Something many thought
to be impossible to achieve in
this short space of time.
It is now the middle of the morn-
ing service. The coffee shop is
buzzing and there is a queue for
coffee stretching into the park-
ing lot. Im in awe of the smooth
service. Wow! Everyone is at the
top of their game and there is a
consistent, smooth and efficient
service. Almost an effortless
excellence. One would love to
think that this is true for our
companies. Truth be told: we
have a way to go still. I reflect
on the seamless teamwork of
the staff in the coffee shop and
decide that the next 90 days will
be directed towards effortless
teamwork between departments.
A huge goal which scares and
excites me at the same time!
Morning rush did not pass with-
out incident. At one point, one
of the coffee grinders clogged up
which had the potential to double
GROWTH
the time of the coffee production
line. The owner stepped in imme-
diately and communicated the
issue to all the customers who
came in. One of the baristas skil-
fully took apart the machine,
fixed one of the ceramic grinders
and cleaned the machine. Ready
for service again!
Pawpaw
Life happens. Even though we
had crystal clear plans of how
our processes should be working
and we are executing thereon,
things do not always go to plan.
Timing changes, deadlines are
missed, information does not tie
up, operations fail to produce,
systems crash. As a depart-
ment we consciously decided
that every event that does not
go according to plan will be a
learning opportunity. This sub-
tle shift in thinking had a
profound impact! When the pro-
verbial pawpaw hit the fan, each
of us played to our strengths to
resolve the matter at hand. Yes,
that meant that I had to get my
hands dirty on multiple occa-
sions. I cherish these times, for
this is where gold is forged!
As the morning rush quiets
down, the team gets together
again. I am close enough to hear
the owner thank everyone for
their contribution. He highlights
the good and encourages learn-
ing from the few issues he picked
up in service. He does it with
compassion in his voice and I can
feel the bond between the mem-
bers of his staff grow stronger.
Wow! How inspiring!
I cant wait to get to the office
and share this story with my
team. My first 90 days have come
and gone. It feels like an instant,
yet Ive grown as though it has
been years. l
CFO MAGAZINE CFO.CO.ZA 77
The opportunity:
Africa

Africas a continent of contrasts, unique challenges and amazing

opportunities. Succeeding here depends on having a deep
understanding of local issues, a global perspective, and the ability
to use these to build tailored solutions. Weve been doing business
in Africa for almost a century, and over 9000 professionals in 66
offices are working with our clients to add value to their businesses.
Its what we do.

At PwC in Africa, we see opportunities where others see challenges.

www.pwc.com/africa

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

 GROWTH

AFGRI CFO Johan Geel chats about past, present and future

Understanding
Africa
When speaking about AFGRIs initiatives in the rest of Africa, Johan Geels eyes light up. The
chief financial officer sees massive potential on the continent for the food industry, as long
as the approach is correct. Find trustworthy people, work with the correct information, do
proper research, go there and make sure of things yourself dont stay away.

A
s CFO at AFGRI, Johan
Geel has been nom-
inated for the CFO
Awards in both 2016
and 2017, an impres-
sive double-whammy that less
than a handful of other CFOs
can boast about. We chatted to
him about past, present, future
and of course Africa.
AFGRI started as a grain man-
agement cooperation in 1923,
became a company in 1995,
listed in 1996 and delisted in
2014. Now 60 percent is owned
by Canadian companies (includ-
ing Fairfax), management owns
five percent, the PIC 15 percent
and Bafepi the rest. The last
financial year was very reward-
ing. We are starting to enjoy
the fruits of the hard work we
have put in, ensuring an effi-
cient transition following our
delisting in 2014 and being able
to respond to the international
reporting requirements of our
shareholders," says Johan.
What is new in your finance
team of late?
AFGRI is a very challenging and
eventful company to work for and
that makes it incredibly exciting to
come to work every day.Towards
the end of the financial year we
embarked on a group optimisation
process. This is an exciting time
for the AFGRI finance team as it
provides an opportunity for the
team to, yet again, demonstrate
their ability to assist business in
optimal value creation.
The focus for
2017 will be on
transformation,
bringing more
diversity into the team
on various levels.
What plans do you have in place
for your team for 2017?
In addition to finalising and
implementing the optimisa-
tion process, the focus for 2017
will be on transformation, bring-
ing more diversity into the team
on various levels.Following the
conclusion of the optimisation
process, a bigger focus will be on
our expansion plans into other
parts of Africa and more contri-
bution by the finance team in
assisting business to create more
value from a financial and social
impact perspective.
What external factors have the
greatest impact on the financial
performance?
Weather, commodity prices of
soybeans, maize and wheat, and
exchange rates have the biggest
impact. On the weather side, you
cannot do much. Regarding com-
modity prices, we have a grain
specialist who started last year
advising on procurement. Our
MDs are immersed in the markets
and also know whats going on.

CFO MAGAZINE CFO.CO.ZA 79

80 CFO MAGAZINE CFO.CO.ZA
 GROWTH

The big dream of the CEO Chris [Venter] and Alexander Forbes for operational
risk. Through the committees,
myself is to ensure people have proper work we identify what we are con-

in Africa and everybody has at least a plate of cerned about. The audit and risk
committee meetings are very
food daily. detailed, taking about five to six
hours, and are held three times
a year. These days we focus
quite a bit on cybercrime and IT
Two CFO Awards nominations in two security in general.
years
What are the opportunities for
your business in the rest of
Johan has been nominated for the CFO Awards two years in a row. We
Africa now and in the future?
asked him what the nomination means to him, and why he thinks he
The big dream of the CEO Chris
has been nominated two years running. I am pleasantly surprised and
[Venter] and myself is to ensure
incredibly honoured to be included in awards of such high stature for the
people have proper work in Africa
second time in a row. It has been a humbling experience since the first
and everybody has at least a plate
nomination and I am incredibly happy to, once again, be counted among
of food daily. That wont happen
such outstanding talent.
overnight, but we want to play
a role in this with AFGRI. There
I personally believe that one of the qualities that differentiates a
are lots of opportunities. We have
good CFO from a great CFO is having that instinct that wants to
been involved since the early days
create value.As a CFO, you have to instantaneously want to find
of 2000 and are active in countries
out where value is created and assist business in that regard. I
like Zambia, Zimbabwe, Uganda,
also would like to believe that honesty and credibility have been
Ghana and Congo.
one of my greatest assets. Equally important, my passion for
people development and transfer of skills through mentorship have
AFGRI consists of grain man-
assisted some of the best young talent to grow both in AFGRI and
agement, equipment (John Deere
in the profession.
tractors), food and retail. Our big-
gest success is in Zambia, where
we have opened a small AFGRI,
How would your internal stake- I have used a company to do which includes equipment,
holders describe your finance an exercise around all acts and grain management and finance.
team? regulations and paint the regu- Unfortunately, it hasnt rained
We have a great number of latory universe for each of the properly there in the last three
business units to consolidate business units. LexisNexis gives years and the power failures have
as finance. Overall the relation- us updates too. In each business increased to 12 hours a day, but
ship is good and fair, but around unit, we have a person respon- we have already had fair prof-
budget time people get itchy as sible for governance, so it is its in Zambia before the drought
we get tough around year-end. slightly decentralised. You have and employ about 200 people. The
We do assist people where it is to find the balance, but you can- rest of the world is developed, so
possible. We are now putting a not be outside the law, so as a if you look to 2050, Africa is the
finance template in place with business you need to make the continent that can help the world
all important things per business best of it. meet its need for food.
unit on two or three pages. There
used to be more differences What does your compliance pro- How is the finance function
between finance and the busi- gramme look like? organised to manage the opera-
ness, but that noise is now dead. It is a detailed process. We have tions in Africa effectively?
a risk and compliance depart- We use our team in South
How do you deal with ever-in- ment and our risk register gets Africa. We have an SA-based
creasing and changing rules and checked at least every year. We MD and FD per business unit,
regulations? are using Aon for insurance and who look across the continent.

CFO MAGAZINE CFO.CO.ZA 81

GROWTH

Before you start system what happens outside
South Africa. In countries, we
spending any money, have a country manager who
make sure your takes responsibility to meet with
government and work across the
information is correct business units. That is not an easy
role, because people like to report
and confirm this with to one manager and in that case,
external parties. there are sometimes more.
some information you get can
be old. Understand the infra-
structure locally and make sure
off-takers will be there. It will
help if you can create your own
value chain. Keep the right staff
and skills and realise that people
think differently. l

What advice would you give

We do use consultants, but we
are trying to limit their involve-
ment as much as possible. Most
of the countries have a full-time
team on the ground as well.
Over time the need to fly people
over will decrease.
The MD of Equipment (John
Deere tractors) can see on the
other CFOs whose companies
are looking to expand into the
rest of Africa?
Find trustworthy people, work
with the correct information, do
proper research, go there and
make sure of things yourself
dont stay away. Before you start
spending any money, make sure
your information is correct and
confirm this with external par-
ties. Understand your market:

Up close and personal with Johan Geel

What is your personal recipe for success?
One word: work. If you dont do something with passion, you can never be successful. I give people around
me breathing space. They tell me I am tough but fair. I involve my team in my decisions.

Tell us about your leadership style: how do you get the best out of your team?
I am family-orientated. Integrity is not negotiable and good values are important for me. I think I am a
visionary who leads by example. I am an extremely hard worker, tough and fair. Sometimes I push too hard,
but I make time to listen to people; what is their passion, where do they see problems? Sharing information
is also very important. Most of the time you can unearth the information or insight you need by talking to
your team, which means you dont need a consultant who tells you what you already know.

What role does mentoring and coaching play in your working week?
Several people have asked me to be their mentor. I ask them what their goals are, what they see as their
shortfalls, what was difficult in the last two weeks. I always try to find time late in the afternoon or early in
the morning.

82 CFO MAGAZINE CFO.CO.ZA

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