How to count the beans you’ve eaten
It’s “remarkable but not important”, was how one accountant and former finance director of a major JSElisted company described the fact that Nhlamulo Dlomu was not an accountant.
Few people seem to think the absence of an accounting background will be a disadvantage for Dlomu as she takes on what looks like the most difficult job in the world.
Dlomu will be the first head of KPMG SA or KPMG International who has not come from an accounting background. That this has raised no concern may be an indication of the fall in the brand value of an accounting qualification — all of the axed KPMG SA executives were accountants. It could also reflect the growing importance of nonaudit work in KPMG SA’s life. In recent years, income from tax and advisory services has been growing faster than audit fees.
Dlomu, KPMG’s former head for people and change, doesn’t try to diminish the importance of an accounting background in the leadership of KPMG.
“I am the leader, but I’m part of a team that has excellent accounting credentials; my chief operating officer and head of risk are both accountants of long-standing,” said Dlomu, referring to Andrew Cranston and a yet-to-be-appointed head of risk management.
They are being hauled in from KPMG International in a bid to help stabilise the floundering South African operation. While two of the key positions have been taken on an interim basis by non-South Africans, Dlomu is keen for locals to dominate the top executive level.
She talks about the “excellent firm” that has a long history in SA and that has trained many of the top people in the business community.
“I accepted the appointment on the understanding it wasn’t a one-person job. There are over 200 partners in KPMG SA, a lot of whom have more experience than I have.”
Dlomu is hoping the firm’s clients will give her team an opportunity to persuade them not to review their relationship.
She also wants the opportunity to engage with the 3,400 employees to ensure they understand the statement issued on Friday. In between these priorities, she and her team will need to persuade the government, the regulators and industry bodies that they have an important role to play in SA.
She says it would not be good for the country if KPMG folded and is hoping for sufficient opportunity to make that case to stakeholders.
That looked like a tough challenge on Friday morning, when her appointment was announced. In the intervening days, it has become considerably tougher. There’s little doubt that KPMG local or international had any idea of just how leaden the balloon was that they launched.
Even in the traditionally cosy local business community, there has been much outrage. Those who believe it must survive almost evenly match those who believe SA’s interests would be best served by KPMG folding. “It is an important part of the South African business infrastructure,” said one CEO. “Losing it would mean the big four become the bigger three.”
The contrary view was that a clear message needed to be sent out. “Auditing is about nothing if not trust, if that is gone, the firm must go,” said an executive who is the chairman of a major financial institution.