From private equity to leadership... Mpact CFO Brett Clark
“It is tempting as a CFO to get involved in every urgent issue affecting the business, because finance encompasses so many parts of the business," says Brett Clark, the CFO of Mpact and one of the nominees of the 2015 CFO of the Year Awards. “However, I believe a good CFO needs to create the time to analyse the information available in the business, visit the operations, debate issues with team members and focus on the key areas affecting the business.”
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Brett Clark joined Mpact as CFO in 2012, shortly after it listed on the JSE, from Absa Capital Private Equity. He says that the timing of his entry at Mpact was ideal to initiate strategies that lead to improved efficiencies in the company. His work lead to the consolidation of group legal entities, refinancing of debt facilities, implementation of a B-BBEE transaction and various acqisitions and projects.
Mpact generates revenue of approximately R9 billion at its 32 operating sites and employs over 4000 employees. It has leading market positions in southern Africa in recovered paper collection, corrugated packaging, re-cycled based cartonboard and container board, PET preforms, styrene trays as well as plastic jumbo bins and expects soon to be the largest recycler of PET in South Africa.
We spoke with Clark about his 3 years in the financial hot seat and his recipe for success. "I encourage people to take accountability, make decisions and recommend improvements within their area of responsibility, thereby accelerating decision making and increasing job satisfaction and personal growth."
How does being a CFO compare to your previous roles in private equity?
"I enjoy both roles and I think that my experience in private equity has benefited my CFO role and visa versa. Although it may not be obvious, I find that working in private equity is actually very similar to a CFO role. Private equity is primarily about the raising, optimising and allocating capital, identifying and driving business opportunities, company strategy, appointing the right people for the position and communicating with investors. This is exactly where the CFO role adds the most value to a business. Where the CFO role differs is that one is obviously far more involved in managing the day-to-day business operations and you have significantly more people reporting to you."
What is your recipe for success?
"I try to keep things simple and set high expectations for people who report to me. I stick to what I am good at and I do not try to do everything. Where possible, I try to resolve matters quickly and get professional advice early. For instance, if we have a technical accounting disclosure issue, we consult with our auditor early and agree the way forward, so that major issues are agreed well before the year-end audit. Communication is also crucial, so I spend a lot of time making sure that the members of the board know exactly what is happening in the business."
How does people management contribute to your success?
"Firstly, identifying the right person for the specific role is essential. Once appointed, the person knows that he or she has my full support and can manage their area and make decisions. I also give people space to make mistakes and also spend time with them. We try to create an environment within Mpact to encourage employees to study and broaden their thinking. For instance, we have a management development program at the Gordon Institute of Business Science (GIBS) tailored specifically for Mpact, which is being attended by a number of members of Mpact's finance team."
(In the photo Brett Clark with CFO Awards judges Claudelle von Eck (IIA SA) and Prof Ben Marx (UJ).)
How do you keep agile in this age of compliance?
"We have a small team with a flat structure at our head office. This facilitates quick decision making and keeps our central costs low. Where possible we try to coordinate compliance related issues centrally so as to reduce the burden on the operations and ensure consistency of compliance."
"Mpact has a decentralised structure with each business having its own management team. To ensure a coordinated approach to managing the businesses, our executive team meets weekly to discuss key issues affecting the business. We have also formed various bi-monthly steering committees, such as the risk and HR steering committees, attended by the heads of each business unit to address compliance, avoid duplication and share key learnings."
What is your relationship with the CEO Bruce Strong like?
"We have a lot of respect for each other and work well together. He has an enormous amount of energy, an excellent ability to simplify complex issues, has good judgement and is a natural leader. The combination of Bruce having an engineering background and me having a finance background works well. There were a number of opportunities to improve the financial aspects within Mpact when I joined and he gave me a lot of freedom to implement these improvements."
"The CEO's operational knowledge has also helped me a lot in understanding some of the nuances within the business. His office is adjacent to mine, so we spend a significant amount of time discussing various issues affecting the business."
What is the toughest decision you made since you joined Mpact?
"The decision we made was to close our Robertville factory in the plastics division supplying containers to the FMCG industry, which had for various reasons been struggling for a number of years. Strategically, it made sense to close the factory and reallocate the production to other Mpact's plastics manufacturing plants already supplying the market. However, it is never an easy decision when retrenchments are involved."
Which external factors do you have to deal with as Mpact CFO?
"Some of the factors that affected us last year were strikes in our plastic's division, recycled paper waste shortages and electricity supply interruptions. However, we try not to use external factors as an excuse for poor performance and encourage people within the organisation to anticipate and plan around these issues. For instance, we increased our stock holding on key product lines prior to the strikes and found ways to run most of our product lines during the strikes to limit the negative impact on our customers."
How does Mpact contribute to society?
"Mpact is South Africa's largest paper recycler and we have recently made a R350 million investment in a PET recycling plant in Wadeville, which will make Mpact the biggest PET recycler in South Africa. Recycling has a huge benefit in that it reduces waste going to landfill and creates significant downstream employment opportunities. A key focus within our recycling business is the creation of small businesses where we supply waste cages, balers and collection points to promote waste collection."
"We have a CSI budget that we allocate out to each operation rather than spend at the centre. This ensures that the money is spent in the communities in which we operate and it is refreshing to see the effort that some of our employees put into CSI and the types of projects supported from education, community projects, sustainable farming and community sport facilities - to mention a few. To encourage employee participation, Mpact has internal awards once a year where we recognise the effort put into some of the CSI programs."