Chief Olusegun Osunkeye: How I Won with Wealth as an Employee
One of our propositions in the ongoing conversation series is that it is possible to build wealth working for others. In this first case study, validating this thesis, we feature Chief Olusegun Osunkeye, former managing director and chairman of Nestle Foods Plc. By staying at Nestle for 41 years (27 years of executive responsibilities and 14 years as Non-Executive Chairman), Chief Osunkeye, a Chartered Accountant by training, has demonstrated that you can be wealthy and live a good life working for others.
In this interview with Ayo Arowolo, he explains some of the strategies that made that feat possible. Please enjoy.
Q1. When did you decide you would stay that long working for others instead of building your own business?
After completing my professional examination in accountancy and taxation May/June 1965, in the United Kingdom, I stayed on to work for 18 months with a practising firm of Chartered Accountants in the Birmingham area. Those times gave me the chance to think about my future goals. I had to decide whether to join a practising firm, in this case, Messrs Akintola Williams & Co, where I started my Accountancy tutelage in 1959, and work my way to the top to become a Partner; or join a manufacturing company, and work my way up, to become a ‘Captain of Industry’ as the cliché goes. Meanwhile, to hedge, I wrote to Mr (now Pa/Elder) Akintola Williams informing him that I had completed my studies and might want to work for the firm on my return to Nigeria if there is a vacancy. Mr Akintola Williams graciously replied that there will always be a place for me if I wish to join the firm as a qualified accountant. I maintained contact all along with Mr Williams, which developed into a mentor/role model over the years to this day. Towards the end of 1966, the United Africa Company, UK advertised on behalf of its Nigeria Subsidiaries, UAC Nigeria, an opening for Accountants to work in Nigeria. I applied, and luckily, I was appointed to start work at UACN in March 1967. So, the decision to work in an industrial organisation was made.
Q2. What made you take that decision? Was there any specific factor that influenced it?
In all my considerations of where to work or what to do, it never crossed my mind to be a “businessman” or to buy and sell/distribute or import/export. I had always been moving in professional circles. Before going to the UK, I worked in Peat Marwick Casselton Elliot & Co, a practising firm of Chartered Accountants, to complete my studies. So, the dignity of the accountancy profession and comportment, professionalism and ethics of my bosses (Mr Akintola Williams, Mr Charles Sankey, both of Akintola Williams & Co and Messrs H.W Bond, D. Easton, and Leslie Parker of Peat Marwick) influenced me. Doing audit work took me to industrial clients to learn first-hand the broad range of commercial and industrial management and operations. I suppose this also shaped my thinking and ultimately swayed me to the path of becoming an industrialist.
Q3. Given your personal experience, what would you suggest are the success factors for anyone who wants to follow that path to wealth creation?
From the onset, I was determined to be a person of character and integrity. These must be your credo alongside your competence in your work. Whatever work, pursue excellence in your assignments, whatever you are given to do, and this involves diligence and continuous learning and improvement. In this same vein, try your best to develop a savings culture. Like the richest man in Babylon said, a tenth of what
you earn is yours to keep. Your accumulated savings is the seed of future investment. Integrity, too, is a big asset. In due time, it can and does attract/create other assets. Let me expatiate:
Under the 1976 Indigenisation Decree, foreign companies were required to sell at least 40% of their shareholdings to Nigerians. So, a close friend, a lawyer, and I, also working in a big company, wanted to benefit from the indigenisation exercise, but we had no money to back up our wish. So, we approached UBA (General Manager then was Mr John West). We told him our mission. He agreed to give us a loan of N60,000.00 each on credit to buy shares in any companies of our choice. The loan was repayable in five years, and no collateral was required, only self-recognition (integrity at work!). That was how our wealth creation (as an employee) started. We repaid the loan within three years.
In life, opportunities come in waves, and it is beneficial to have a discerning mind or recognise or perceive the wealth potential in some event, activity or hearsay. Let me paint an example for you. Pay keen attention:
After securing the line of credit, we now searched for companies selling shares. One obvious place to go is an Issuing House, Nigerian Acceptances Limited (NAL). Two of the officers handling the issues were friends (the power of networking!). They included our names in one particular issue-Imperial Chemical Industries Plc (now known as CAP Plc). The 50k nominal value shares were sold at 18kobo (at that time, 1976, the share price was determined by the Capital Issues Committee (now known as the Securities & Exchange Commission). When the list of names of prospective buyers was collated and sent to the Chairman, who had his own list, the Chairman looked at the (list with our names) as submitted by NAL, and retorted loudly to everyone around “who are these small boys” and crossed out our names, including the NAL officers. Eventually, we were offered the crumbs because the shares were not fully taken up. In my case, 10,000 shares of 50k each were offered to me.
My friends at NAL were angry that we had been called “small boys” and declined their offer. I told them that “I am a small boy” for this purpose, and I accepted and paid N1,800 for the 10,000 shares. A year later, ICI declared a dividend such that I received N2062.50 net! A year later again, ICI declared a bonus issue of 3 for 2, and I received 15,000 bonus shares. One of the NAL officers who had declined his offer offered to buy the bonus shares at N1.50 per share and paid me N22,500. I learnt later that the officer offloaded the shares at N2.25 per share within months! A win/ win for all concerned. Wealth creation!
Another example: 30 years ago, at a business meeting, the Managing Director of Unilever Nigeria Plc mentioned
that they had sold their factory and head office premises at Apapa and would be moving to Oregun when formalities were completed. A few days later, while pondering over the information gleaned at the business meeting, I deduced that the assets sold would have been fully written off and that the sale would have yielded a huge capital gain realised, which would show in the Balance Sheet at the end of the year ending December 31. I reasoned that shareholders would benefit from a handsome bonus issue if declared. This was around August/September, so I started buying Unilever shares on the Nigerian Stock Exchange, hoping that by the following May or June, when the Annual General Meeting would be held, I would realise gains (more wealth) on my investment in the shares. Unfortunately, it did not happen as planned. The paperwork transferring ownership, which would allow the sale/capital gain to be realized before or by December 31, had not been completed. So, I had to wait/tiedown capital for 12 months, and I continued buying more Unilever shares. Everything worked out as expected the following year wealth accretion. It was amazing!
Q4. What are the difficulties you encountered along that path, and how did you overcome them?
From the word go, I imbibed hard work, integrity and honesty, character, work ethics, competence, commitment and loyalty to my employer as my emblem. These attributes would engender my bosses, peers and subordinates to repose trust and confidence in me as I move up the corporate ladder and generally in the journey of life. These principles have been critical success factors in my career. It is expected that along a career path spanning over 45 years, one would encounter intrigues, frustrations, and disappointments. I had a fair share at different times. Let me recount a few:
In the company I worked for, Nestle Group, international auditors go around auditing the operations of the Nestle subsidiaries in over 100 countries around the world (including Nigeria). They would arrive in the country without prior notice, bearing a letter of introduction from Nestle headquarters in Switzerland. In one such instance, the Auditor came and, after his work, went back to Switzerland and wrote a damning report laced with untruths and incorrect figures to make his case. It was a low point for me in my career, especially coming at a time (in 1978) when I was being prepared for secondment to Nestle companies in Malaysia/the Philippines/Switzerland for international exposure and development for further promotion. All this was now in potential jeopardy. As it was the practice, the auditee (Nestle Nigeria, typified by me) would be allowed to respond to the Auditor’s findings, comments and recommendations. I gave a robust defence supporting my statements with verifiable facts and figures to disprove or lay bare the falsehood of some of the Auditor’s major “findings”. The powers above must have been satisfied with my response, and the transfer programme for me went on as planned. However, presumably, as a hedge, if things were as bad as the Auditor had painted, the same Auditor was posted to Nigeria to replace me as the Finance and Control Director on my transfer to Malaysia. During his stay in Nigeria, and in his unguarded moments, he would tell colleagues and the friends he had made among our distributors that he deliberately wrote a bad report so that he would be posted to Nigeria to come and clean the mess. He got his wish, except that there was no mess to clean!
My posting to the Far East and Switzerland was from mid-1978 to the end of December 1980. As time was getting close to return to Nigeria, the erstwhile Auditor (now Finance & Control Director) was brazen enough to ask our employer (Nestle S.A. Switzerland) for posting out of Nigeria, giving as his reason that he could not serve under me (a Nigerian). He was asked to submit his resignation immediately, which he did. He left Nigeria and resurfaced a few months later, having been engaged by one of our distributor partners, an influential Nigerian. After about six months, he fell out with the influential Nigerian who got him deported within 48 hours! The good Lord had fought for me; it is written: “Vengeance is Mine, I will repay”, says the Lord (Romans 12:19).
I served as de facto No. 2 in the company for 11 years before being elevated to the Chief Executive Officer position (Numero Uno). That waiting period taught me some lessons in patience, show competence with hard work to be blameless, and tolerating some indignities along the way. It is written that “Many are the afflictions of the righteous, But the Lord delivers him out of them all” Psalm 34:19.
In all my considerations of where to work or what to do, it never crossed my mind to be a “businessman”or buy and sell/ Distributor or Import/Export. I had always been moving in Professional circles
Q5. What were the wealth-building strategies you employed while you were actively working?
The answer to question 3 has partially covered this question. Networking allows you to meet diverse persons in various occupations, vocations, and professions, such as bankers, realtors, lawyers, industrialists, stockbrokers, analysts and persons with business acumen. One can glean opportunities for wealth creation from interacting with diverse personalities. Seek advice and information from experts and those you think should know. Stockbrokers will tell you that the market thrives on hearsay (and, of course, analyses); at the end of it all, you have to decide, go or no go, which would depend on your risk appetite. Every investment decision has an element of risk. Generally, the older one is, the less long-term your risk horizon should be.
NOTE: Read the full Interview in the online edition on www.thisdaylive.com
I strive for balance in my life while pursuing my career of lifelong employment, first in the UAC Group for 5 years, then in the Nestle Group for 27 years. Managing the work/life balance is very important.You may not be 100% successful all of the time, but one must be conscious of it and work at it