The gift of quality education in South Africa- ACCA’s active role

June 16 1976, between 3 000 to 10 000 students mobilised by the South African Students Movement’s Action Committee took to the streets of Soweto protesting against the then presiding government’s directives. The main event that triggered this protest was the introduction of the Bantu Education Act in 1953 where the language of Afrikaans was made the primary medium of instruction in schools, this language barrier on its own made it difficult for black scholars to receive and make use of quality education.

Despite the dissatisfaction of The Bantu Education Act, it made it possible for more children residing in Soweto to be in schools. However, the quality of Black Education in comparison to White Education was very inferior. The government spent an average of R644 per white student while spending an average of only R42 on each black student.

Furthermore, the University Education Act 45 of 1959 made it unlawful for black students to attend “white” universities, this racial segregation also meant a lower standard of education offered in the “black” universities. Quality higher education for a long time was not attainable to the majority of South Africans.

In the interim of all this racial segregation, the Accredited Certified Chattered Accountants (ACCA) launched its first branch outside the UK right here in South Africa. In 1920 a total of 2 800 students took their Exams with the ACCA. In 1996, ACCA launched a new syllabus, based on international accounting standards, this launch was at an ideal period for the South African populaces as the restrictive Bantu Education Act had just been diminished in 1994.

The ACCA has been striving to provide quality education that is attainable to people of all races, maximising opportunities for all its students. With regards to this, the ACCA offers to its South African students a BSc (Hons) in Applied Accounting at the Oxford Brookes University, a first in the market and now the largest undergraduate accounting programme in the world.

The past barriers to quality university education for black students have been lifted, in contribution to quality university education, our ground-breaking partnership with the University of London makes us the first accountancy body to join forces with a university to enable students to gain a Master’s degree and a professional accountancy qualification at the same time, ensuring first grade education.

The ACCA has doubled the number of exam sessions ran, now students can choose from four exam sessions per year. From being the first accountancy body to admit women to membership in 1909 to doubling the number of exam sessions we run in 2016, ACCA is proud to be pioneers of quality education that sees no gender or race. Happy Youth Month!

click here to learn more on the history of ACCA

 

Generation Y Changes Finance Stereotypes

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If change is inevitable, then the ability to adapt to it is paramount. Gen Y is suited up and ready to enter the office to take up their roles as finance professionals. But what should be expected by corporates as they set up a platform for this generation.

The image that comes to mind when the words ‘finance professional’ are mention is of a strict gentleman or woman in a black suit that smells of strong black coffee with shiny black shoes. The walls of their offices are decorated with certificates that attest to the achievements of the professional. A thinker that loves silence, meetings and charts that outline plans spanning 20 years. Generation Y brings a different image though. The ACCA report titled Generation Y: Realising the potential, highlights the fact that the pool of talent for HR personnel has changed, Gen Y forms the majority of the talent and HR personnel and CFOs cannot use the same barometer to gauge the potential of this new generation.

The ‘selfie’ generation has a different outlook on life and they require that this outlook be married to all their activities including their work life. Barrie Bramley, Curious Disruptor at Calidascope, points out that unlike baby boomers, this generation place value in freedom. This can be seen in their attachment to their mobile devices like laptops, smartphones and tablets. They do not believe that they should be in the office to do their work, they believe that technology allows them to work from anywhere at any time. “It is not uncommon for this Gen Y to ask their managers for flexible business hours, or to go work on a project outside the office”, said Bramley. “It is managers that will be willing to negotiate such terms with this cohort that will get the best out of this generation”.

Gen Y does not put much value on titles, they believe in adding value. “In this age when you know enough, you are qualified enough”, said Bramley, “this generation is very informed and they have a peculiar ability to absorb information that serves them well in business. They are also colourful, they are loud and believe that this should work together in expressing themselves in their roles at work. In her book, Knowing Y: Engage the Next Generation Now, marketing and media expert Sarah Sladek lists 5 motivations that drive this generation and make them so different from the previous generations:

  • 92 percent believe that business success should be measured by more than salary
  • 80 percent prefer on-the-spot recognition over formal reviews
  • 61 percent feel personally responsible to make a difference in the world
  • 50 percent want to start their own business, or have already done so
  • 2 years is their average employment tenure

Bramley suggests that there is a shift in wisdom in the corporate world, that while Baby Boomers were able to take us to where we are now, Gen Y will be able help reach greater heights. “This is the case of ‘two rights’ that need to be amalgamated, it is not that Baby Boomers were doing it wrong, and it is not that Gen Y is juvenile and should silence their voices”, commented Bramley on the different approaches to business Gen Y and Baby Boomers have in the office.

It is HR managers and CFOs that can be willing to invest in knowing the motivations of this generation that most benefit from it. Personnel is the business’ most valuable asset, the right candidate will do wonders for the business’ bottom-line.

CFOs Required To Plan Ahead

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“He who fails to plan, plans to fail”, an age-old adage that has guided individuals and companies to success still rings true in the fight against gender imbalance in the workplace.

Regulatory requirements do their bid in combating gender imbalance in senior management positions, but it is only when companies are exposed to the true benefits of gender diversity that the balance will materialise. The finance sector has shown great results in embracing gender diversity – in South Africa, the mining and finance sectors boast the most female participation in senior positions than in other sectors. CFOs and their team leaders have an opportunity to level the scale by using available data within the organisation and also through their “top table” positions.

The ACCA report, gender diversity to boost business performance, highlights four things that CFOs and their team leaders can do in order to tilt the scale of gender diversity:

  • ESTABLISH THE BUSINESS CASE

Incorporate increased shareholder value (eg through increased sales achieved by reaching a wider customer base), wider stakeholder value (including greater employee satisfaction) and a strengthened global value chain.

Include the downside risks of poor diversity (such as lost business, poor decision making or regulatory costs).

Tailor your business case to the needs and interests of other senior executives to achieve maximum buy-in.

  • SET TARGETS AND KPIS

Set challenging targets for diversity: 40% of senior roles to be filled by women, for example.

Analyse financial and other data to establish links between diversity and performance.

Identify both hard (eg gender headcounts) and soft (eg employee satisfaction) diversity measures.

  • MANAGE DIVERSITY

Establish systems, processes and a culture that enable the expression of differing viewpoints.

Provide training in how to work effectively in diverse groups.

Set out clear progression criteria based on performance and potential.

Establish sound governance around diversity actions, for example, by including diversity KPIs in management reporting packs.

Set realistic expectations for diversity initiatives: ‘quick wins’ are unlikely.

  • BE TRANSPARENT

Report internally on diversity targets and measure performance against them.

Meet investor and regulator needs by reporting diversity information externally.

The lack of commitment to diversity by companies is highlighted as a barrier in the ACCA report. If CFOs and their team leaders would take steps such as the ones listed above, the issue of gender diversity in the workplace, and in senior positions, will be achieved much sooner than 2095 as predicted by some research.

Women Work for Free for Four Months of the Year

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While research shows that complete gender equality, with the efforts being put in now, will only be possible in 2095, the gender pay gap will only be totally bridged in 50 years.

Despite the benefits of gender equality released through research results yearly, the gender pay gap has widened over the years. In South Africa the gap between males and females is standing at 35%. This means that females get in a year what males get in eight months – meaning women work for free for four months as opposed to their male peers.

There are several factors that contribute to this gap widening. The ACCA report, gender diversity to boost business performance, highlights the lack of commitment from companies to gender equality. This one barrier is by far the most contributor. “Women with a degree earn on average 30% less than their male peers with similar levels of education, whereas the gap is lower for those with a basic or high-school education”, says Sandra Burmeister, CEO of the Landelahni Recruitment Group. In the past the pay gap was attributed to differences in skills and the experience women brought to the labour market; research shows that women that have the similar skills and the same qualifications still earn less than their male peers.

The pay gap seems to widen with age. The WageIndicator survey indicates that women under 25 years the gender pay gap is 15%. Between the ages of 25 and 34 years, it widens to 19%. This widening trend accelerates in the middle-age group (35-50 years) to reach 25%. Finally, during the later years of their working career, the earnings gap widens at a slower rate, with women over 50 experiencing a pay gap of 27%.

According to the World Economic Forum, closing the male-female employment gap would have huge economic benefits, boosting GDP by as much as 16%. By drawing on the full complement of available talent at all levels of the organisation, particularly in top leadership teams, companies have been shown to produce better financial results, particularly as opportunities grow in the knowledge economy. It makes sound business sense for pay inequality and job barriers for women to be removed.

There is an influx of females entering the finance profession; approximately half of ACCA students are female. The growing numbers of women accountants and their ever growing influence is perhaps most keenly evident among ACCA students and members in Singapore, where a staggering 75% are estimated to be female. It is imperative that this team entering the field finds the ground cultivated, females have proven their ambition and their ability to produce profitable results as much as their male peers. It is only fair that they get the same remuneration.

If research results have proven the link between women participation and improved financial performance then this gap is not just an issue of compliance, but it has become a moral issue that needs to be looked into and amended quickly.

Increasing Gender Diversity to Boost Performance

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The latest Global Gender Gap report from the World Economic Forum shows that gender equality will not be achieved until 2095. If this slow wheel of transformation is not pushed to move faster, the result will be a limited number of role models for young females seeking to enter and make it big in the finance sector.

Though the transformation has been slow, South Africa has seen a lot of females climbing up the corporate ladder and making significant change. Their rise has not only benefitted them, but it serves as inspiration for young female graduates who are working hard to be among giants in the finance sector and business world as a whole.

Educating companies of the benefits that come with gender balance in leadership roles needs proper focus. The ACCA report titled gender diversity to boost performance highlights barriers to gender diversity; it is this mind-set that creates the imbalance. They are:

  • Lack of commitment to diversity initiatives around the business
  • Pressure to focus on short-term financial results
  • Failure to recognise and challenge one’s own ‘unconscious bias’ that influences the way one views     other people and their potential (for example, assuming confidence equals ability or assuming all women will be the main childcare providers in their home)
  • Recruiting people like oneself (i.e. in one’s own image) and from one’s own network
  • Recruiting from limited talent pools, for example, graduates from the same universities
  • Promoting those who are cast in one’s own image
  • Referring to standards and criteria for recruitment and promotion that have traditionally been set by men
  • Lack of opportunities for flexible and part-time working
  • Failure to establish diversity champions empowered to initiate changes in policies and procedures
  • Lack of investment in training and mentoring
  • ‘Local context’ and ‘cultural norms’ used as reasons for inaction and complacency

As these barriers are actively combated by companies, transformation will not have to wait until 2095 as the research results showed. Dealing with barriers will allow companies to draw talent from a greater pool, and this will ensure success in meeting the business objectives and strengthening the economy of the country because as businesses thrive so does the economy of the country.

The commitment to combating these barriers will help deal with two audiences: the companies that need to embrace gender diversity, and young women seeking to make a valuable contribution in the business world.

“Thousands of women are working hard on becoming the female business leaders of the future”, says Helen Brand, ACCA chief executive. “Businesses need to take action in response, not just to avoid breaching regulatory requirements, but because diversity is great for business”, she adds. The potential in women in the finance sector and the business world as a whole needs to be nurtured and exploited. A commitment to diversity initiatives will see businesses benefit far more than if they choose to protect the current status quo.

Is Gender Equality Still an Issue?

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In a country like South Africa that is known for its ability to embrace transformation, is gender diversity in the workplace still an issue?

The MasterCard Index results seem to show that gender equality in South Africa still needs major improvement. It highlights that there are still more men in leadership positions that women. The index suggests that for every 100 men, there are 57.5 women in business leadership roles in organisations; and that for every 100 males, there are 25.5 women that own their own businesses.

As alarming as this is, are there benefits that businesses can enjoy by embracing more women participation in senior management? According to an ACCA report titled Increasing gender diversity to boost performance there are many benefits for organisations that choose to embrace this. The report says that organisations that lack a gender balance are unrepresentative of the society in which they operate, because women make up roughly half the population.

Research studies have found a link between more gender-diverse company boards and better financial performance. South Africa’s mining sector has the best level of female representation on boards, according to a recent report released by PwC. “Research shows that there is a strong correlation between financial performance and the participation of women on boards,” says Gerald Seegers, PwC Director for Human Resources Services, Southern Africa.

In light of the information from the research it becomes clear that companies that take gender diversity seriously benefit, not because the regulators require this, but because gender diversity affects their bottom-line. Helen Brand, the ACCA chief executive, says, “[Gender] Inequality is a genuine business risk and should be treated as such”.

The finance sector has an important role to play in promoting and supporting diversity initiatives. CFOs can act as role models and use their ‘top table’ status to influence the corporate diversity strategies and action by other functions.

Gender equality in the South African business place still needs major improvements. Though they help, it is not regulations that will bring transformation, but it is organisations that understand the benefits of gender diversity that will reap the most rewards.

Diversifying the board

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Until recently, the subject matter of board diversification was merely an exercise in corporate social responsibility (CSR), ethics, morality and regulatory compliance. Although the subject matter is nothing new under the sun, discussions surrounding board diversification have progressed well beyond the moral imperative to a new paradigm. More and more companies are finding that having a diverse board of directors is a critically essential component of a successful business strategy.

The responsibilities of the board of directors have been on the corporate agenda for a number of years. Acting as the agents of shareholders, board of directors are expected collectively to formulate practical and financial strategies for the organisation as well as to monitor the effectiveness of the organisation’s traditional practices. The board of directors form one of the core pillars of a full-bodied corporate governance framework. This, according to ACCA’s report: Diversifying the board – a steps towards better governance, is evidenced by the Organisation for Economic Co-operation and Development (OECD) Principles of Corporate Governance stating that ‘the corporate governance framework should ensure the strategic guidance of the company, the effective monitoring of management by the board, and the board’s accountability to the company and the shareholders’. As a result, this leads to the central concepts of corporate governance. ‘Recent academic literature suggests that one of the ways to enhance corporate governance, arguably, is to diversify the board,’ states ACCA’s report.

In today’s exceedingly competitive marketplace, there are extreme demands and high expectations from constituents, investors and external stakeholders exerted on businesses’ board of directors in warranting good business management and delivering favourable results. At the moment, there is a growing trend of interest among stakeholders in the idea of bringing diversity to the board. Greater emphasis has been placed on filling the gaps on a board with diverse individuals who can bring both a fresh and unique perspective to boardroom issues. But what is board diversification and how much diversification is enough? There is no uniform definition of board diversity. By tradition, one can think through factors such as age, race, gender, culture, educational background and professional qualifications of the directors to make the board a lot less homogenous. Many interpret board diversity by considering such less tangible factors as life experience and personal attitudes. Principally, board diversity aims to cultivate an all-encompassing spectrum of characteristics and demographic attributes in the boardroom.

The cry for board diversification is loud and clear. While many organisations are making headway in creating a more diverse and inclusive board, a great deal of progress still remains. Diversifying the board is still more of an agenda item than reality in various organisations. Fortunately, there a number of strategies those organisations can employ. Firstly, to diversify a board, constituents must to look beyond traditional skills and knowledge for a competency-based board. Secondly, stakeholders are required to thoughtfully deliberate not only what the board’s current gaps are, but also to what the future needs of the organisation will be. A well-articulated strategic plan with comprehensive stakeholder engagement navigates the main direction for the organisation including the priorities that should be focused on over the next couple of years. This will subsequently advise on of the necessary skill set and industry knowledge to propel the organisation forward.

Diversifying the board has a number of benefits and provides organisations with unique competitive advantages. According to ACCA, these include

  • More effective decision-making
  • Better utilisation of the talent pool
  • Enhancement of corporate reputation and investor relations by establishing the company as a responsible corporate citizen

Diversity has become an inescapable fact of life and it is argued that board diversity reflects the diversity of the society and community served by the organisation.