As deputy chief executive officer and finance director, David Hodnett is the right hand of CEO Maria Ramos at Barclays Africa. In an exclusive interview with CFO South Africa, he speaks about his love for detail, his relationship with Ramos and the creation of Barclays. He also reveals how he very deliberately chose to plot his career path via risk management roles and why he sees the way he deals with people as a reason for his success. “I believe in accountability and giving people space to operate.”
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Can you describe your role at Barclays Africa?
"Besides financial director, I am also deputy CEO, responsible for IT and operations, all our African countries outside South Africa and the strategy portfolio."
What do you enjoy most about the FD role?
"It is the width of the FD role that I like. Besides regular things like accounting and investor relations, the finance portfolio includes group treasury, which has a very important part to play in the balance sheet management of the Group."
"I am a CA and have an MBA, but have not followed the traditional finance route. After articles I worked at KPMG, consulting in financial services and then moved to risk at Standard Bank. That was a strategic decision on my part as I saw the risk and financial management areas growing closer together and I realised that at a bank it was going to be difficult to be the FD without a detailed understanding of key risk concepts."
"I then joined Barclays Africa as chief risk officer, which enabled me to get exposure to the board and our major shareholder Barclays PLC. That put me in a position to apply for the FD role when it became available. My core strength lies in my ability to understand the detail but at the same time to put together and communicate the big picture."
"As FD of a bigger organisation I am in a privileged position, as I have an unbelievable support team in place. I believe that the smaller the company, the bigger your risk as FD. Here at a bigger organisation you have so much good information from such bright people. My head of finance could easily be an FD of a JSE-listed company."
Your CEO Maria Ramos is a well-known figure, what is your working dynamic like?
"We know each other's strengths and weaknesses and we trust each other. Her connections across the world are unbelievable. She trusts me enough on the details. With an organisation of 44,000 people you have to be present as an FD. My room for growth lies in ensuring that I develop a wider personal network among our customers and other external stakeholders. I am also engaging a lot more with the wider organisation on our strategy and the progress we are making."
What is your recipe for success?
"Although I am by nature an introvert, I am a people person in the sense that I believe in accountability and giving people the space to operate. People will lose interest if they just need to execute instructions. Here at Barclays Africa, the complexity of our matrix is deeper than many local companies - our head office is in London, we have our own board and all the other countries have their own boards as well. A lot of work is involved in aligning our messages, which is why relationships are incredibly important. You don't have to be friends all the time, but you need to be consistent and treat people with respect."
What was the change from Absa to Barclays Africa like?
"Putting the construct of Barclays Africa together was a major crossroad. Previously Absa was only a South Africa-based organisation and now we need an Africa mindset, which includes creating excitement around opportunities to visit other African countries."
"It is clear where our differences and advantages against our competitors are. Barclays was already active in many African countries and we took on an unbelievable local brand. Our motto is 'Fully international, fully regional, fully local'. We can do anything the international banks can do, but have better local presence. We can do anything the regional banks can do, but we can go global when we need to. We can also do anything the local banks can do, but have a regional and international presence."
What was the most challenging for you during that period?
"Our budgeting process was traditionally very numbers orientated and with operations across 12 countries and a complex matrix, we needed to ensure the whole organisation was aligned. Therefore we introduced the concept of Integrated Planning to ensure there was complete alignment between the strategy and finance. I spent a lot of time making sure the language used by everybody, from strategy to country heads to business heads and functions, was aligned."
"We also needed to work hard getting everybody to understand that we were now an organisation working across 12 countries in Africa and that the ways of working needed to change."
How can finance contribute to making the bank more agile?
"Finance's job is to allow business to do what it is good at. To do that, there needs to be clarity of numbers. We close each month on the fifth working day and flash numbers at the end of every week. The financial pack used to be 60 pages, now it is ten pages and I can see the nature of the discussions in exco changing."
"Having said that, I don't think we're agile yet. You can only become agile if you get the core working. That gives you confidence to try different things. We are now starting to talk like 'why don't we do that' and get innovative."
What is the toughest decision you have recently made?
"The toughest decisions are always those where there is a vacuum of information, there is not a right or wrong answer and the decision needs to be made quickly. An example was when African Bank went into curatorship and we made the decision to buy the debt instruments out of our unit trusts onto the bank's balance sheet. At times like this, it is great to have an experienced board that can guide you in your thought process."