Daryl Edwards - CFO Universal Coal: `Forward looking advisor in the business`
A well-informed insider, that is what the CFO of the future will look like, says Daryl Edwards, CFO of Universal Coal. “Continuous daily reading and research in industry and business matters will become art of daily life as the CFO acts as advisor to the Board.”
Daryl (35) is a qualified Chartered Accountant (SA) and a registered member of the South African Institute of Chartered Accountants and the Institute of Chartered Accountants in Australia, with over ten years professional experience in finance and commerce. He studied at the University of Port Elizabeth, now Nelson Mandela Metropolitan University (BComm) and the University of Kwa-Zulu Natal (honours).
He began his career at PriceWaterhouseCoopers where he worked in their Global Risk Management Solutions and Forensic Services divisions. On completion of his articles Daryl joined a large South African multinational diversified company as a Financial and Commercial Manager in the transport, motor and property management field. Following this he held the position of Senior Internal Auditor at BHP Billiton, before joining an international automotive and diversified products supplier for over five years.
During this time he filled General Management positions in Business Development/Commercial, as well as the Acquisitions, division for the company's South African operations, and was subsequently appointed as Managing Director of a subsidiary company. Prior to joining Universal Coal, Daryl held the CFO position with Asenjo Energy, a Botswana based coal exploration and development company which is a Joint Venture between Aquila Resources (ASX), Sentula Mining (JSE) and Jonah Capital BVI.
When Daryl was appointed CFO at Universal Coal in June 2011, he made few radical changes. One of them was implementing a full ERP system, a change of accounting policy and change of functional currency. The current financial system was totally inadequate and reliable financial data was never available. Daryl's first move proved very successful. "The conversion to a full ERP system has set the company up for success in the transition from explorer to producer and full ERP support."
1) What do you enjoy most about your job?
What I enjoy most in my job is that there is never a dull moment! Each and every day there are challenges and opportunities that arise and need to be dealt with. These challenges at face value are sometimes sole-destroying, however once overcome the sense of satisfaction is unrivalled within larger or more stable companies.
2) How do you perceive the role of the CFO has changed in the last five to ten years?
What has changed most over the last years is that the CFO is now a custodian of cash and a forecaster of future outcomes. Strategic planning and risk management are now part of daily life and run to the core of every CFO. Previously CFO's were the recorders of the business and reported on the historical facts, while now the CFO is a forward looking advisor within the business. There are now continuous questions from the Board relating to foreign currencies, turbulent markets and economies, risk mitigation, cash management and forecasting, capital and profit estimates and how to effectively create shareholder value.
3) How do you see the role of the CFO evolving in the next say five to ten years?
The CFO will not be able to shed the responsibility of financial reporting but will hand this down to preparers of financial information specializing in this field. The CFO will continue to the forecaster and advisor markets, currencies, business, commodities and the well-being of the global economy. Continuous daily reading and research in industry and business matters will become art of daily life as the CFO acts as advisor to the Board.
4) Would you say that accurate forecasting and budgeting is still feasible for a financial department in today's tumultuous financial markets?
Absolutely, forecasts need to be adjusted continuously and organisations need to adapt to an ever changing financial world. Budgeting whilst extremely difficult in volatile markets still have to cater for best and worst case predictions on the future. Volatility is now part of daily life and one needs to be vigilant in removing emotion out of the decision making process. Data must be analysed over and over again to ensure the correct decisions are taken based on accurate information and analysis.
5) What do you see as the greatest challenge for South African companies in the global economic situation and for your industry in particular?
Our greatest challenges today include uncertainty, lack of action and bureaucracy from Government and failure to capitalise on a commodity super cycle.
6) Which skill(s) do you think a finance professional should master to be most successful in his work?
A finance professional should be master the skills of speed, accuracy and possess the needed technical know-how. In any pressurised situation these skills are critical. Gone are the days of answering queries after the fact. Accurate information needs to be readily available to make on the spot decisions.
7) Which achievement or project in your business career are you most proud of?
That would be securing a R 3.2bn supply contract with Eskom for Universal Coal. This contract transitions the entire company of Universal Coal from an explorer to a coal developer and producer generating income and wealth to shareholders.
Another achievement that also made me very content was securing a supply contract for the C-class Mercedes manufactured in East London, a deal worth R 2bn. Working at Venture Otto and was the outcome of a long but successful negotiation.
8) Please name something - a procedure or process for instance - that was implemented in your company before you were appointed CFO, which you changed after you took the position of CFO.
When I was appointed CFO at Universal Coal, I implemented a cost-effective, full ERP system, a change of accounting policy and change of functional currency. The current financial system was totally inadequate and reliable financial data was never available. The conversion to a full ERP system has set the company up for success in the transition from explorer to producer and full ERP support.
9) Who is your role model in life and why?
There are many, I try to find the best characteristics in people and adopt as many as I can whilst identifying their bad leadership traits and avoiding these.
10) What vital piece of advice would you give young ambitious finance professionals?
To never stop trying and wanting to achieve success. However, this should not come at all costs. Remember, business is about people and you will need them in your success.