Anthony Sher - CFO Adcorp: `A huge level of frustration`
“Regulation and legislation are synonymous to a huge level of frustration.” Anthony Mark Sher (40), CFO of Adcorp, is candidly annoyed by the ever changing requirements within corporate governance, and how that keeps him from doing things he actually should be doing. According to Anthony, things are unlikely to get any easier in the future.
Anthony is a Chartered Accountant and a Chartered Financial Analyst. He obtained his BCom and BAcc from the University of the Witwatersrand in 1992 and 1993 respectively. Anthony was articled to Grant Thornton and in 2000 he was awarded his CFA charter by the CFA Institute. Anthony is Chief Financial Officer at Adcorp, In November 2009, he joined the company as head of investor relations and corporate finance and during the following month he was appointed to his current position. He joined Adcorp from Ellerine Bros (Pty) Ltd where he had served as an internal investment professional from January 2008 until June 2009. Prior to Ellerine Bros, Anthony served as an Equity Analyst and Fund Manager of small cap investments at Stanlib Asset Management from April 2002. Two years previously, in 2000, he joined SCMB as the Banking and Insurance Analyst. From 1998 to 2000, Anthony was the Financial Director of a private financial services company he was instrumental in co-founding.
Adcorp is South Africa's largest diversified employment-services company. The company, nationwide staffing approximately 2300 people as a permanent workforce, places high-quality people into all kinds of employment - be it on a permanent, temporary or flexible basis. The company also helps its tens of thousands of clients with a wide range of outsourced services - from recruitment and training to psychometric testing and payroll management. Adcorp has been listed on JSE since 1987 and is considered one of the most successful companies in the local employment industry. The head office of the company is based in Johannesburg. Last year's turnover was R5,9 billion (consolidated).
1) What do you enjoy most about your job?
What I love about it is in simplistic words the dynamic-ism of the job, how every day there is a challenge and a fire to put out. I work in an ever changing environment - within which I have the ability to be a catalyst to drive change and efficiency. Fortunately, the environment in which I work is quite flexible to driving change and being open to it, as opposed to other industries.
2) How do you perceive the role of the CFO has changed in the last five to ten years?
The CFO of today is no longer the grey old bean counter it once was, but a multitasked, flexible role-player. It has to be, seeing the much more increased focus on corporate governance in terms of legislation and regulation. The CFO now - more than ever - is constantly faced with the question of how one deals with ever changing requirements; how one adjusts company business to adhere to this legislation, to make sure that company procedures adhere to the requirements of the current various pieces of legislation, regulation and requirements of corporate governance. As the CFO I constantly have to make sure I am covering these bases. And this is not a one-off, it's always there and ongoing.
I think there are traditional roles that the CFO typically played in the past, and still does. The grid of the four main roles of the CFO are that of the steward, operator, catalyst and the strategist. These roles have not changed; it's merely that the division of time the CFO gets to spend on those particular roles has changed.
In core essence the CFO is the custodian of the purse and the balance sheet of the company - and he or she always and will always remain just that. However, the CFO today is now faced more with other topics that are relevant in today's business environment, e.g. the function of increased focus on corporate governance and strategies, as pointed out above. To me that comes with a huge level of frustration and stress - everything needed in order to make sure the company complies to the universe of ever changing legislation. The workload is at times very frustrating and I have no doubt I am not alone on that.
3) How do you see the role of the CFO evolving in the next say five to ten years?
Depending on what industry you are, I think the environment of legislation and regulation is going to increase more and more. Particular in our industry and in the financial industry - the ever increasing administrative burden, which takes you away from the ability to be creative and strategic, will increase. With that, the search for skills in an organization becomes just as increasingly difficult. Which means more frustrating for myself, the CFO. . To make matters worse, I expect the already complex regulation and legislation to become even more complex in the future, resulting in my duties drifting away from what I should be doing.
4) Would you say that accurate forecasting and budgeting is still feasible for a financial department in today's tumultuous financial markets?
Obviously it is still very important and yes, it is also still feasible. There is absolutely no doubt that one still has to do budgeting and forecasting, albeit nobody knows what the future brings. The fundamental role of a financial function is premised on being a yardstick to measure performance. Otherwise you are sailing in the dark - The financial budget serves as a form of discipline , but it's no longer the only focus of the CFO.
5) What do you see as the greatest challenge for South African companies in the global economic situation and for your industry in particular?
The list of challenges is endless, really. The biggest challenge within our industry is maintaining the quality and the calibre of the person in your working environment and your team. Challenge number 2 is to make certain that all your daily operations and procedures are efficiently run: to ensure operational efficiency at the lowest possible costs. Closely related to all is the challenge of being multitasked, being able to juggle the balls without dropping one. One must be able to deal with so many tasks simultaneously without making drastic mistakes; it's really a balancing act. The fourth challenge is to make sure the business is adequately structured from a capital perspective be it debt or equity or a combination of both, so that the business is sustainable. It's simple: if you don't structure your balance sheet, the business will blow up. That is always going to be there. Also, I would add that dealing with staff morale in an ever increasingly cost-environment to the list of challenges within our industry.
Also, there is a challenge to be cognizant of market expectations and the challenge to meet those expectations. In difficult times like these, it's also a challenge to manage such expectations, because if you don't, that's exactly when you disappoint people. There is a big challenge to be as transparent as possible, without breaking the rules.
In a broader perspective, for South Africa as a whole, there is again a long list of challenges that we face. There is that of political leadership, dealing with employment equity, driving internal transformation - they are really all ongoing challenges. It is the challenge of your procurement strategies in meeting the empowerment credentials which is peculiar to South Africa, as we all know. Another challenge for South Africa is to deal with volatility in our currency.
6) Which skill(s) do you think a finance professional should master to be most successful in his work?
I would personally name five core skills a finance professional or director should have:
- To be commercial in ones thought process;
- To have technical and theoretical skills on accounting and finance;
- To possess analytical skills; to be able to analyze information and interpret them in a correct manner;
- To have good communication skills;
- To have great interpersonal skills, needed to bring out the best in your people. As a director you have to be able to manage a collective team in a way they all strive for the same goals and outcomes. Your team are the people you rely on to establish that, so you need to encourage and empower them to get the best out of them at all times.
7) Which achievement or project in your business career are you most proud of?
Before joining Adcorp I worked as an investment professional. In that position I managed to build the best performing unit trust in my category, for which I won an award at the time.
When I arrived at Adcorp within my first three months at the company I did a successful restructuring of the balance sheet which positioned the business adequately then and strengthened the balance sheet to put the company in a position it is now. Had I not done that then, we surely would not have been able to do what we did late 2011 and that is to execute a major acquisition..
8) Was there anything - in terms of procedures or processes - that was implemented in your company before you were appointed CFO, which you changed after you took the position of CFO?
After I had been appointed CFO, I expanded on the internal discipline on the focus on cash generation - as our primary focus - whilst at the same time introducing the philosophy of appropriate capital structuring. I introduced the idea to the board, and they supported me, resulting in action immediately. In terms of hiring and firing people, which really is an ongoing process, I manage out non-performers and I hired a new calibre of individuals to restructure a new team.
9) Who is your role model in life?
I can't really say I have one particular role model in particular; I actually have various role models in my life. In general I admire people who are top achievers, people who have overcome adverse, disadvantaged backgrounds and have achieved something really big in life. In a professional context that implies I admire people who create something new, run a successful organization, and are good managers. I personally think of myself as a good professional manager, although I haven't created anything new myself.
10) What vital piece of advice would you give young ambitious finance professionals?
I would tell them first and foremost to identify what you want out of life, and to recognize you need discipline and drive to realize those goals. Subsequently one has to continually be driven to keep to your objectives, and forego the need for instant gratification; it's a curse. Strive for a balance in your life and be patient on yourself.
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