This week's Expert Insight comes from Greg Davis, CFO Africa at the Standard Bank Group and one of the nominees for this year's CFO Awards. He shares some key principles for doing business in Africa and elaborates on one of them.
Doing banking and finance in Africa is not a big shift from doing it in the rest of the world, especially with the significant foreign direct investment being channelled into the continent lately. This includes investment from all the globally recognized accountancy bodies and professional services firms. Following key principles is important for a finance team to ensure it delivers success and is a trusted business partner.
As a team covering 19 countries with finance staff situated in all of them, we follow our 4i principles, ensuring we are:
- in control
- interacting
- influencing
- and getting the most out of our infrastructure
It is important to also recognise that Africa and emerging markets are markets where you need to be able to react quickly to economic, social and political change. So it is important that we can take opportunities and manage risk driving top and bottom line growth. This can be done by focusing on the 4i principles. In this Expert Insight, I am focusing on the first i: being in control. It is easy to lose control in Africa, so I like to break this down in manageable chunks:
On the ground accountability and control - having the right people in the right place is the most important part of being in control. This means having fully empowered Chief Financial Officers in every legal entity with full accountability for the controls in that legal entity.
Reconciliations - ensuring all reconciliations are undertaken and reported. This is important in an environment with millions of transactions a month and multiple product systems.
Substantiation - ensuring all balances are fully substantiated goes further than reconciling.
Self-assurance - ensuring you have the right control framework and the right controls in place means reviewing them regularly and evidencing such. Doing this is often a way of standing back and realising you can improve your processes for controls or efficiencies.
Internal audit - using Internal Audit as a truly value adding function that supports an effective control framework is important. You need to place reliance on your self-assurance and use Internal Audit to drive improvements rather than flying blind until Internal Audit undertakes audits. It is YOUR control environment and not Internal Audit's.
External audit - the quality of external audit firms is strong and the investment in people can be seen across the continent. Building good relationships with these firms in country and globally is important not just for annual audits but process improvements and standardisation to the organisation.
Customer experience - all of this focus on controls and being in control ultimately improves the customer experience and safeguards their important assets. The closer finance is to the ultimate customer the better they can support the organisation.
Being in control is the hygienic part of finance. We just must get it right. This allows us to build firm foundations to deliver on all the 4i's.
- Greg is nominated for the CFO Awards 2015. See the list of nominated CFOs here and join the CFO Awards.
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