This is a story about a professional services firm specialising in assurance, advisory and tax services. It is also about leadership that approaches development in a holistic manner. My conversation with its chief executive, Victor Sekese, emphasises the importance of culture as the basis for organisational, social and spiritual growth.
The journey of the fully black-owned Ntsaluba Inc to its latest incarnation as SNG Grant Thornton runs in parallel with South Africa’s journey towards an inclusive society. Its current status as the sole Grant Thornton member firm in South Africa is the result of self-aware leadership, being committed to strengthening cultural values, and building a workspace where fellow travellers can ‘apply their God-given talents to succeed’.
If one googles ‘Victor Sekese’, one might come across a YouTube video titled ‘Victor Sekese – Legacy’. One might also note − from watching that video − that the chief executive of SNG Grant Thornton speaks about the interaction between the human spiritual journey and business identity, and ultimately, how these forms of being shape society. In my conversation with him about the firm’s history and most recent merger in 2018, the theme of culture emerges as a deal-making − or -breaking − consideration. It is also the root of his vision for a firm staffed with individuals who envision themselves as part of an organisation that can make a difference to society.
The 2018 merger between the firms formerly known as SizweNtsalubaGobodo and Grant Thornton South Africa signifies the inclusion of a home-grown South African professional services firm into a network that spans 140 countries. It has also meant the rationalisation of Grant Thornton South Africa’s national network under a single licence held by SNG Grant Thornton. Like with most fruitful unions, it has required consideration of identity and philosophy. At branch level, this has meant negotiations with the broad South African network of existing Grant Thornton branches to assess whether operating under the SNG Grant Thornton umbrella would further each entity’s values. This has resulted in the inclusion of the old Grant Thornton’s Pretoria office and the separation of its Johannesburg, Cape Town, Port Elizabeth and (a part of its) Durban branches, which have been integrated into the BDO network.
A truly South African firm
While SNG Grant Thornton continues to seek out further avenues to increase its geographical reach, Sekese says that it is at present focused on developing its identity as a ‘truly South African firm’ with the ability to deliver a seamless global service. He elaborates that the firm ‘jealously guards its black status’ and points to the minimal dilution of black investors’ shareholding in the firm, triggered by the merger.
SNG Grant Thornton’s 75% black shareholding demonstrates alignment to the country’s latest populations statistics, which show that South Africa’s 59,62 million inhabitants are 81% ‘black African’. Beyond representation based on race classification, Sekese indicates that only 25% of the firm’s shares are held by women, signalling that the firm has some distance to go in representing a country which is 51,1% female.
In addition to the considerations of share ownership and gender representation, Sekese elaborates on the firm’s desire to be ‘an employer of choice for young black professionals in particular’ – a key consideration for any firm operating in a country with a median age of 27,6 years. For this next generation of leaders in advisory, assurance and tax, Sekese hopes to create ‘an environment where they can thrive and enhance their talents’. This goal appears to have personal significance for the chartered accountant and registered auditor whose own struggles with institutional culture during the completion of his training contract in the early 1990s are well articulated in the YouTube video mentioned above.
‘We haven’t sold out. We’ve beefed ’
While the 2018 merger has not significantly impacted the firm’s ownership statistics and future goals, it raises the question whether it has set back industry-wide strides made to diversify the market share of historically dominant professional services firms. This was raised in the recent discussion about the ‘Corporations and Economic Crime’ report produced by the Open Secrets foundation, which focuses on the role played by auditors in the enabling of economic crimes caused (among other factors) by threats to independence owing to long-term engagement relationships. The response offered by SNG Grant Thornton’s chief executive gives insight into the impact of transformation legislation on the firm’s development and the benefits offered by its strategic partnerships. Since the country’s first democratic elections in 1994, the firm has, according to Sekese, benefited from, and been challenged by, Black Economic Empowerment (BEE) legislation. He also explains that in 2020, the firm is currently looking towards the opportunities inherent in mandatory audit firm rotation (MAFR) regulations gazetted in 2017, which apply to financial years beginning on or after 1 April 2023.
‘We haven’t sold out. We’ve beefed up,’ said Sekese over our Microsoft Teams call as he told me the story of the firm’s latest merger in 2018, by referring back to prior transformations. These occurred in 1995 and 2011 when Ntsaluba Inc became SizweNtsalubaVSP and then the firm which would eventually merge with Grant Thornton − SizweNtsalubaGobodo. These mergers, Sekese explained, were the result of opportunities created by BEE legislation and subsequently by its practical limitations. The legislation enabled the firm to expand its client base in the private sector and make in-roads into public sector contracts. The story told by Sekese of the firm’s development through BEE includes the failure of enforcement in keeping up with circumvention of BEE scorecard metrics by established yet untransformed firms. By avoiding meaningful transformation and even budgeting for punitive fines, firms holding significant market share in the professional services industry have been able to maintain their dominance.
Its third merger, in 2018, resulting in SNG Grant Thornton opened up the home-grown firm to a new set of opportunities and challenges which requires a deft approach to change management. This includes managing the alignment of its frameworks, policies and procedures to the standards of the global Grant Thornton network. It also allows the firm to leverage investments in technology, among other tools required, to deliver quality services to a global client base made accessible by a mutual referral relationship. The successful management of these changes, among others, also allows the firm to prepare for opportunities inherent in MAFR. The regulations require audit clients to limit relationships with their auditors to a term of 10 years. While this will result in SNG Grant Thornton being rotated out of its existing client relationships, it also allows it to branch out − making its service offering available to clients it may otherwise not have had the opportunity to serve.
With his eyes trained on the future, Sekese shares that he is now focused on succession. He counts The growth mindset as one of his favourite books for having taught him the necessity of matching people with their potential. He elaborates that he is looking to build ‘a cadre of leaders’ through the firm’s succession processes. In going forward, he has reached out to retired business leaders for advice on how to achieve the goal of ‘building an institution that isn’t dependent on personalities’. This indicates a desire to pay forward the benefits of mentorship, something which he enjoyed from his relationship with Sango Ntsaluba. It bodes well for the development of a joint culture between the firms formerly known as SizweNtsalubaGobodo and Grant Thornton − currently trading as SNG Grant Thornton – under the motto ‘An instinct for growth’.
AUTHOR | Mandisa Mpulo CA(SA)