The crucial role of the risk register: a chat with Aveng Infraset's FD Thobeka Ntshiza
Thobeka Ntshiza, Financial Director of Aveng Infraset and a finalist in the 2015 SAICA Top 35-Under-35, is a regular at CFO South Africa events and believes that peer-to-peer learning is a non-negotiable. "You actually cannot afford not to attend such events. It's part of your growth and development as an FD, and in the CFO space," she says. Thobeka also believes in the importance of having your finger on the pulse of the company's financials, and going "into the trenches" to check the health of the business.
"I think risk management is so important. It talks about, knowing what you know now, how is this going to affect how you do business in the future? In the next six or twelve months, is the business still going to be able to operate and trade?"
How did you come to pursue a career in the finance industry?
"I've always been one of those lucky people who only ever had one career in mind and fortunately it was a passion that never changed. I remember, when I was in Grade 9 and I was introduced to accounting as a subject and told what you could do with it, and what career path you could follow, I was so fascinated. I went home and told my parents I was going to be a CA. My mom asked what CAs do and I said I don't know but I'm going to be one. And today I'm here. I'm very committed to my career and to following my passion. It was a natural love."
What do you enjoy most about what you do?
"For me it's the thrill of unpacking the numbers. A set of data and financials tell a story. As a financial director for this business I love that. It gives me a thrill. At the same time, it's really about being the financial custodian for a company, which is a huge responsibility. This involves addressing issues around business liquidity, the fill rate of our order book and how this shapes our revenue forecast in the short to medium term. For me having the different pieces of the puzzle and being able to see which pieces fit, which need to be adapted, that excites me."
What does your current role as FD of Aveng Infraset entail?
"I always joke with my friends that I'm a concrete girl and manufacturing is not for the faint hearted, because Infraset is in the business of making concrete products; it's a manufacturing business. We've got 11 factories - eight in South Africa and three across SADC. I'm the FD but I'm quite comfortable wearing the safety boots and hard hat and walking the factory floor with the factory manager to see what's happening on the ground. It is so important to have face-to-face interactions with operations, to understand at first principle production capacity, efficiency wins and challenges, etc.
What would you like to achieve in your current role?
"In my opinion the manufacturing space still needs to attract a lot of black females, because they are very rare in this space. The typical choice will be to go to a financial institution or FMCG services. So I'm out there spreading the word. It's exciting. It's different but it stretches you. You do get a lot of fulfilment. It is a male-dominated world but I tell people not to judge it from the outside. Rather come into the business and see for yourself."
How involved are you in business strategy at Aveng Infraset?
"Very involved. You can't separate your core financial work from the strategy function of the business. For example, currently, there is a concerted drive to accelerate plant automation at our factories. . So we've had to consider what the benefits are of going the automated route. You not only consider the benefit of cutting away the manpower and have less people on the floor, but you have to consider whether it yields financial benefits and desired returns for the shareholders as well. Then you have to have the conversation around whether or not the business and its people are ready for that transition. It is key to have those strategic conversations and having the sound financial analysis to back it all up so that when we present those ideas to the board we are prepared and can articulate our strategic choices."
"Part of being involved in the strategic side of the business is about communicating that strategy, which for me is so important. Our budgeting cycle starts mid-March and is finished at the end of April with presentations to the board. The budgets that we present must talk to the strategy. And for that to happen, you need to have comfort that the guys who are going to deliver on the strategy understand it, and that when they talk about the plans for the next 12 to 24 months, what they're planning aligns with the business strategy."
"I spend time going to different divisions and having conversations with the managers about where the business is going, what's working for us and what isn't. You will have instances where sales managers are passionate about their products but perhaps those products are no longer giving us the required profit margins or speak to market demand. So you need to be able to have frank conversations about whether to keep the product line or to withdraw it from the market."
"I really enjoy visiting our foreign operations, for example the Mozambique factory, because the dynamics in South Africa are completely different to what you experience in another country. I have an appreciation of what the complications or challenges are in just doing business in Mozambique. In South Africa, we take for granted that cement, sand and stone is readily available, and of good quality. This is not always the case in other countries. To engage in those discussions is very interesting."
"I also firmly believe that as an FD you must have a vibrant and alive risk register. For example, we had electricity as one of our risk factors, not so long ago. Today we have water and its impending usage restrictions. You need to be aware of what's happening out there and how that affects business internally today as well as over the next 12 to 24 months."
What are your career goals?
"I'm definitely gunning to be the CFO of a listed company within the next five years."
Who were/are your mentors?
"Initially my mother was my biggest mentor. Just because she gave me the tenacity to push through. She lived by example. She was a young mother - 19 when she had me - but she went back to school. I was about nine when she was doing her BSc degree part-time and working full-time. Now she's got her Masters and is doing very well. But for her to come from such a humble beginning and not be a victim of circumstance or hand over her fate to someone else, that resonated with me. To qualify as a CA you have to pass Qualifying Exams Part 1 and 2. I passed Part 1 on my fourth attempt. I had to dig deep to do that. Having seen my mom's example that came in handy. I'm here because I didn't give up."
"Professionally the FD of Aveng Manufacturing has been great, especially in impacting the know-how of working in a male-dominated world. He's been very open about sharing his knowledge and experiences. Where he's been exposed to something I wasn't a part of, he will share that with me, such as presentations he has attended. The MD of Infraset is another one. He teaches me to think like an engineer and not an accountant. So that gives me a different dimension to thinking and idea generation. I've been lucky to tap into that. That has stretched me to be creative and innovative."
You've attended several CFO events. In your opinion, how important is peer-to-peer learning?
"I've been hugely inspired by women such as Jo Pohl and Aarti Takoordeen. I've sat at events where these ladies were in the panel discussion and I was in awe; I was inspired. Purely because they were talking about finance transformation and how we get our teams to stop being number crunchers and only analysing historical data but rather, focus on looking forward, and for them to share ideas of what they've done in their environments. There were a lot of ideas which I've already implemented in my space. So that forum provided by the CFO South Africa events has enabled me to think broader and differently, and to tap into the knowledge of my peers. You actually cannot afford not to attend such events. It's part of your growth and development as an FD, and in the CFO space. I really recommend it."
In your opinion, what does the CFO of the future look like?
"It's not changing as much as it is growing. First and foremost you are a financial person, so you cannot abandon that. You are the financial and compliance custodian of the business, so you need to ensure the company produces sound financial results which can be communicated timely and accurately. That's the core function and we cannot move away from that."
"But there are starting to be add-ons. I spoke earlier about risk management. I think it's so important. It talks about, knowing what you know now, how is this going to affect how you do business in the future? If you cannot execute a big project, what effect will that have on financials? You must have a robust risk register as a financial person because that allows you to look at all angles of the business. You have to keep your finger on the pulse."
"Strategy is also important, and you must be actively involved, not passively receive information and populate it into your financial numbers. You need to be actively engaged with operations and sales managers in terms of whether the business is aligned with the company's strategy and whether or not the different pockets of the business are ready to deliver on that strategy. If not, what are the stumbling blocks? So I think it's crucial to be on the ground and actively involved."
What has been the greatest challenge you've faced in your career?
"One of the hardest decisions I have had to make was to decide whether the department I had at a certain time was the right department to carry the business into the future. I've had to take a hard look at the skills in the business and the tenure and calibre of the people. Those are difficult conversations because they often result in reshuffling the business and letting people go."
"Also, when I joined this business the finance team was working from three different locations, which had created a silo mentality and made communication difficult. We weren't getting the synergies and working as a team. I made a decision to move the teams to one location. Needless to say I had a lot of unhappy people on my hands, but it was a business imperative. I had a lot of one-on-one discussions with my team members about it. You do win a lot of people if you engage in conversations such as this. With some people it takes a while for them to buy into the change. In the end we did it and moved to one location. Every day the ops guys thank me for it. Sometimes you have to be tough and stand by your decisions."
When, in your career, have you been the proudest?
"Last year I was in the SAICA Top 35-Under-35 as a finalist. For me this spoke about the journey I've been through as a finance person, doing my articles at Sasol, moving to Coca-Cola and now to Aveng. It's about not just doing your work but making a positive contribution and leaving a positive legacy for yourself in the companies for which you've worked. That's what I've been most proud of. Whichever company you speak to I don't think there's anybody there who would say they wouldn't work with me again."
What did you take away from that experience?
"When we had the awards evening, with all top 35 in one room, I walked out of there and said to myself, 'If these are the youngsters of this country, South Africa is in good hands'. I was amazed by the calibre of skill and talent of our fellow youths - to call them that. There are amazing people out there; young in their careers but doing fantastic things. Making an impact not just in business but also in their communities. There are so many people doing good in their personal capacity, not for recognition but just because it means something to them. It gave me a sense of hope and excitement that this country is going to be ok. It has good people and good professionals who are going to drive this economy into the future."