TOP OF THE CLASS - JSE MAGAZINE

TOP OF THE CLASS

New skills lie at the core of the expertise required by the next generation of Africa’s business leader

TOP OF THE CLASS

Anyone studying finance needs a sound foundation not just in financial ‘literacy’ but also in financial ‘capability’ – the combination of skills, knowledge, attitude and confidence needed to make and exercise money-management decisions. In short, financial literacy is what an individual knows about finance, while financial capability is how that knowledge is applied over time.

According to Rhodes University Business School director Owen Skae: ‘Demand has changed, and increasingly it is very much “how to do it”. Risk-assessment tools are much in favour. Organisations also want us to teach analytical tools, so it is not just about populating an Excel spreadsheet to work out sales, costs and profit, but also how to analyse cost-drivers and efficiency measures. Clearly the emphasis is on improving decision-making.’

These capabilities form a crucial foundation, particularly for those studying towards an academic business degree, including the flagship MBA.

For this reason, it is compulsory for Rhodes MBA students who have not passed any tertiary level financial accounting, to take a financial and quantitative skills course in their first year. Prospective students are further advised to enrol in short courses that assist with additional preparation for the programme, such as fundamentals of financial accounting, before starting their degree course.

Johan Smit, senior financial management lecturer at the University of Stellenbosch Business School (USB), says: ‘As many MBA applicants lack a basic understanding of accounting and finance, exposure to fundamentals in these subjects is a prerequisite. However, business schools differ in their approach to the time spent conveying an understanding of subject fundamentals and integrating it with the strategy and holistic management of a business or public body.

‘At USB, the MBA curriculum balances a solid understanding of fundamentals with high-level, value-based applications, integrating quantitative and qualitative analysis. Furthermore, the teaching of financial education is presented in an integrated, all-encompassing, over-arching manner, across disciplines and not taught in the context of silos.’

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At Henley Business School, the MBA class of 2015 will engage in a three-day workshop on managing financial resources in their first year. Most of the school’s MBA students already have 10 years of postgraduate work experience under their belts and are experienced, practising managers.

The University of Cape Town’s (UCT) Graduate School of Business (GSB), meanwhile, has structured its MBA curriculum around a set of core courses, including accounting and finance.

The objective is to provide a sound theoretical base, enabling students to specialise further by taking advanced finance options during the second half of their MBA. According to the GSB, students will have been exposed to ‘the three central issues in modern finance, namely the investment decision, the financing decision and the financial planning process’ by the time they have finished the course.

The MBA remains the most sought-after qualification worldwide. In SA – with its competitive financial education landscape – enrolment at business schools rocketed last year.

Registration numbers for a full-time MBA at Wits Business School increased by 400% for the 2014 academic year, according to Moneyweb. At Rhodes, meanwhile, the number of those registered for a full- or part-time MBA doubled.

SA’s business schools offer value for money and consistently rank high among their global counterparts. The GSB has a firm place in the annual Financial Times rankings for its MBA, while Pretoria University’s Gordon Institute of Business Science (GIBS) regularly emerges as a world-class provider of executive education.

Five SA business schools have been accredited by the Association of MBAs, while two are ‘triple crowned’: Stellenbosch and UCT have global accreditations from the European Quality Improvement System and the Association to Advance Collegiate Schools of Business.

In addition to the MBA (be it full-time, part-time, modular or long-distance learning), more than 15 business schools across the country offer a range of finance-related postgraduate diplomas (PGDs) and degrees as well as executive short courses.

Wits, for instance, offers a PGD in management, a comprehensive PhD programme and five specialist masters in management (MM) degrees in finance, marketing, entrepreneurship and research, as well as mentoring and coaching. The one-year MM in finance and investment course was designed to develop specialised finance practitioners and researchers who know the emerging-market context.

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‘The main differentiator is that the executive courses are aimed at capability building’

SHAUN ROZYN, EXECUTIVE DIRECTOR OF CORPORATE EDUCATION, GORDON INSTITUTE OF BUSINESS SCIENCE

Milpark Education (formerly Milpark Business School) features two separate schools, parallel to its business school: Investment and Banking, and Financial Planning and Insurance. According to Antje Hargarter, dean of the former: ‘Part of the demand that we are experiencing is related to the strong regulatory requirements in the financial services sector. 

‘Another part is based on the fact that the financial services sector employs highly skilled individuals that need to be upskilled on a continuous basis in this ever-changing sector.

‘While our flagship qualification – the PGD in financial planning – has been growing steadily over the past years, we are also adding new qualifications based on needs that we identify, like a PGD in banking and a higher certificate in investment administration.’

In 2016, Milpark intends to launch a distance-learning PGD in investment management that will rely heavily on online technologies.

An altogether different area of financial education is development finance. In 2003, USB introduced the MPhil in this discipline – the first of its kind in Africa – and now offers PGD and PhD programmes too. Charles Adjasi, its development finance head, explains that a new body of learning is emerging in finance in terms of developing-country economies.

‘Financial market institutions operating in these developing markets must understand that context,’ he says. ‘You’ve got corporates, governments and NGOs who all need to finance certain activities within the same development context.’

While the MPhil typically attracts directors and senior managers, the PGD was introduced in 2013 to target middle managers, after MPhil graduates returning to work identified the need. Students come from SA, Zimbabwe, Kenya, Ghana, Portugal, Namibia, Nigeria and Tanzania.

UCT and Port Elizabeth’s Nelson Mandela Metropolitan University also offer degrees in development finance.

A large portion of financial education takes place through executive short courses that are open to the public or customised for corporate clients.

Shaun Rozyn, executive director of corporate education at GIBS, says: ‘The main differentiator between our academic and executive programmes is that the academic courses are accredited and culminate in a formal qualification, while the executive courses are aimed at capability building.’

He goes on to explain that custom programmes account for 70% of executive education at GIBS, and that a large majority of its client base comprises local companies. ‘The second category is South African companies that have expanded across the borders, such as MTN and Standard Bank.

‘The third category is African multinationals such as Kenya Airways, followed by global multinationals such as General Electric, BP, Nokia and IBM, who have world-class business skills but need to build capacity in Africa.’

Adam Gordon, executive and corporate education director at Wits, says that while the business school is rolling out a senior-level advanced finance programme, its ‘bread-and-butter’ course remains finance for non-financial managers.

According to Gordon, the course is aimed at introducing people ‘who are in management but didn’t get finance training, to the basics of finance. We don’t turn people into CFOs, but we’re giving them a bit of a leg up. We provide them with the skills to become business literate and management literate, so they will understand the financial situation better, which will help with their financial decision-making’.

This basic finance course is popular at many business schools. ‘It’s a fantastic programme,’ says Rozyn. ‘It’s extremely applied and over 200 senior managers take part every year at GIBS.’

Mark Graham convenes UCT’s finance for non-financial managers course. He says many individuals are holding themselves and their organisations back because they fail to understand basic financial concepts.

‘For all organisations – especially government departments – the complexity of the current market especially means that non-financial managers need to be aware of every financial nuance in order to ensure their organisation stays financially healthy,’ he says.

It all comes down to one thing: whether you are a future African leader or in lower- to middle-management, you will have to hone your skills to genuinely become financially capable.

By Silke Colquhoun
Image: Mr.Xerty © www.nomastaprod.com