Boardroom TalkSA's power letters |
Alec Hogg wonders why our society puts such a premium on CAs.
By their actions, the less refined of our brethren believe FY are South Africa's two most powerful letters. They are surely in the running with their shock value, ability to generate intense satisfaction and versatility (think being in traffic or watching sport).
Coarse, however, never did stack up against articulate. Neither, as the bank accounts of thousands of chartered accountants will attest, do those widely used letters really challenge the regal CA. As we were reminded this past week.
Nedbank, the country's number four banking group, has proudly proclaimed the appointment of a new financial director, young chartered accountant Raisibe Morathi. The only thing more surprising about the announcement was the way it passed without comment. Then again, that's the power of the CA.
In a different society, Morathi wouldn't have had a snowball's. Because of the complexity of their responsibilities, Big Bank FDs are usually crusty, risk-averse number-crunchers who prefer figures to people. You know, those long-time cubicle dwellers whose eyes only sparkle when you open a debate on capital adequacy ratios or something else involving complex mathematical formulae.
Nedbank's new Financial Tzar comes from a different world. Most unfortunately, she is best remembered for having chaired the credit committee at the Landbank, a once proud State institution whose appalling lending practices turned it into a basket case. She was also a favourite of the ousted Mbeki administration, having served as Chief Operating Officer at the State's Industrial Development Corporation whose recent investments have been, well, interesting.
Upwardly-mobile Ms Morathi joined Sanlam in May last year, to look after the assurer's support function. Her impressive title of Chief Executive: Group Services brought a package of R312 500 a month. And if her headhunters have done half a job, Nedbank shareholders will be paying north of R350 000 a month for their new FD. Not bad for someone who celebrated her 40th birthday last month.
But this is the new world of South African banking. Bright, enthusiastic and female trumps experience and testosterone every time. Even in arcane and complex areas where you get turned on by things like IFRS and Basel II. Still, the country is bursting with thousands of young and bright women, so I asked Nedbank's CEO-elect Mike Brown, what tipped the scales in favour of his new colleague.
Said Brown, who at 43 is a bit of a Young Turk himself: "She has good credentials in financial services. She's a chartered accountant, she has an HDipTax, so certainly we think she has all the skills that we need in that position."
Ah, there are two little letters again. Get a CA one, look the part and you're off to the races with "all the skills" one needs. One might have asked whether it would make better sense to hire Ms Morathi - or someone like her - after she'd successfully run the books of, say, a smaller business. Or even the books of any business? But that would have been churlish. And, dare one mention it, would be questioning the blanket brilliance of a CA.
But you've got to wonder. It's not like one ever hears of a senior appointment being justified by "well, he's got an MSc, cum laude, from Oxford" or "her track record doesn't matter because she is an LLB after all". But mention that the candidate has a CA and, in financially illiterate South Africa, heads nod in agreement.
Although local CAs travel well, our national obsession with those two letters is not shared elsewhere. Qualified accountants in the UK and US, for instance, are, well, plain old accountants. Over there, they're regarded as the scorers in the cricket team, the guys who love to be on the field but as they couldn't crack the First XI, use their pencils to be part of the action. The difference in business is scorers share the spoils generated by the big hitters.
So how did this myth of universal CA brilliance evolve?
Maybe it's a legacy of gifted entrepreneurs Sol Kerzner, Brian Joffe, Laurie Dippenaar and others whose accountancy training - and those prized letters - have forever been affiliated with their success. Linked, no doubt, by that incredibly professional industry body, the SA Institute of Chartered Accountants (Saica) to counter the Richard Bransons and Malcolm Gladwells who preach of business success deriving through the lack of formal education, not because of it.
More likely, though, it is probably a function of that old economic chestnut of demand and supply.
Every year, wanna-be accountants who have already completed at least four years of a university degree, sit their "Board" exams. The pass rate of the critical leg each November (Part II) is brazenly manipulated to open or close the flow at that point in time.
When Saica's brains trust is worried about over-supply, as it was in 2005, only 35% of the 123 candidates who wrote Part II passed - well below the normal 50% to 60%.
Emigration, the growing economy and perhaps some noises from the Competition Commission has seen the reins being loosened since, with 2006's pass rate at 41% and 2007's rising to 53%. Last year it surged to an unheard-of 79% from a record 200 candidates, suggesting that Saica may well be worried that it, too, will be subject to scrutiny over restrictive practices.
For years, our society has excessively rewarded those who possessed the early maturity and dedication to pass their tough exam on the language of business. Surely, a qualified accountant's biggest asset should be their ability to accurately keep score. Not, through possession those two letters, being automatically qualified to be responsible for the financial affairs of a R550bn business with 27 000 employees.
Write to Alec Hogg: alec@moneyweb.co.za
* Alec Hogg is Moneyweb's founder and editor in chief
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