KPMG Transformation on Track · 2018-04-02 · Message from the CEO “KPMG is serious about...

KPMGTransformation

on TrackQuarter four 2013

kpmg.co.za

ContentsMessage from the CEO 1

KPMG’s Values 2

KPMG’s transformation journey 3

Envisioning genuine transformation 5

Relating to our stakeholders 5

Empowering our people and the community around us 7

Remaining accountable 7

KPMG’s Values •Weleadbyexample•Weworktogether•Werespecttheindividual•Weseekthefactsandprovideinsight•Weareopenandhonestinourcommunication•Wearecommittedtoourcommunitiesandtheenvironment•Weactwithintegrity

Message from the CEO“KPMG is serious about transformation”

Transformation is the heartbeat of what we do and who we are. It is a key strategic imperative at KPMG and something that we take very seriously in every aspect of our business. For us, transformation is

imperative because we believe it is the right thing to do. Transformation is embedded in who we are, it is in the way we do business, how we interact with our stakeholders and most importantly how we treat each

other (our organisational values).

Through conscious and concerted efforts, we seek to address past imbalances through our transformation strategy.WehavesetambitioustargetsthatarewellabovetheCAChartertargets.Ouraimistogobeyond

the regulated requirements.

KPMG’s focus is to achieve meaningful transformation with the future in mind. Executing meaningful transformation means that we understand the constitutional values that underpin the need to transform.

It is our responsibility to ensure that we play a significant role in turning the tide in South Africa.

Wearecommittedtocontinuingtotakeourtransformationeffortsandperformancetothenextlevel.Asaglobalfirm, KPMG aims to deliver the best to our clients and we have identified the global priorities necessary to do this

in South Africa, transformation remains a key priority in order to deliver the best to our clients, our people and our communities.

KPMG’s commitment to transformation is nurtured by our devotion to create a culture of inclusion that encourages all our people to be the best they can be. By valuing our differences, we build upon our individual, team and firm strengths.

It’s an approach that we believe benefits our people, our clients and our society at large.

Forus,thetransformationofourfirmisajourney,onethatwehaveembarkedonwithmuchenthusiasm.Wecontinuetotravel this journey with the seriousness it deserves and a high level of dedication.

OurAAAratingequatestoaLevel2ContributorpertheGenericCharteredAccountancySectorCode.Wepresentthisdocumenttoyou,animportantstakeholder,asanoverviewofKPMGSouthAfrica’stransformation

framework and achievements to date. All financial information recorded for the financial year is from 1 September 2011 to 31 August 2012.

Moses Kgosana

Chief Executive, KPMG South Africa

KPMG’s transformation journeyFor us, the journey continues and we would like to take all our stakeholders along as we move forward in this light. Wecontinuetomakeencouragingprogressinadvancingtransformationandconstantlyevaluateourachievements,whileatthesametimerecognisingthatitisamovingtargetthatwearestrivingtowards.Weseethejourneyoftransformation as a process of normalising our firm, corporate South Africa and the entire society as a whole. Below are some of our significant milestones on this journey.

3 | KPMG Transformation on track

South Africa’s first black female CA qualifies at

KPMG; Nonkululeko Gobodo qualifies at KPMG

1987

KPMG invests in the CA-Eden Trust; Trust to

seek out potential CA’s from previously disadvantaged backgrounds (today the

Thuthuka Bursary Fund)

1988

KPMG appoints first black partner; Arvind Hari

1994

Appointment of Moses Kgosana as CEO; The first of the ‘Big Four’ accounting

firms to appoint a black AfricanCEO

2007

KPMG launches the Growth Acceleration Programme; A

transformation skills programme for 20 unemployed B.Com

graduates within the tax and advisory domain

2006

Appointment of black directors; KPMG admits 50% new black directors

2003

KPMG’s Independent Transformation Advisory Board; Board established

and chaired by Dawn Makhobo

2002

KPMG merges with KMMT; The first merger of substance

between an international firm and a leading black

accounting firm

2002

Awarded Top Gender Empowered Company Award and Financial

Sector category Award at the Top Women in Business

Awards; Acknowledgement of strides taken by KPMG in

the empowerment of women

2012

KPMG launches a transformation goal cascaded to all staff members

as part of performance management processes; A ground-breaking performance management goal

influencing staff remuneration that entrenches the value

of transformation firm-wide

2012

KPMG Staff EmpowermentTrust; The first of the ‘Big Four’

accounting firms to deliverequity value to staff and has

distributed over R50 million individends to over

400 black staff

2009

KPMG achieves AAA level 2 BEE rating; The first of the ‘Big Four’ accounting firms to

achieve AAA rating

2010

Winner of the Support Services Sector at the Metropolitan

Oliver Empowerment Awards; Prestigious accolade for

progressive transformation activity

2011

KPMG launches the Prestigious Internship Programme; A public-private partnership to

provide employment for 64 graduates

2013

Winner of the Honourary Award in the Consulting industry at the Top Women in Business Awards;Awarded to companies that have

maintained and exceeded normal practice over a

10 year period in gender empowerment

activities

2013

2011

Appointment of Edson Magondo as Head of Audit

The first of the big four accounting firms to appoint

a black African as Head of Audit

2011

Appointment of Tantaswa Fubu as Executive Director, Head of

HR and Transformation; The first of the ‘Big Four’ accounting firms to appoint a black African female

as Head of People and Transformation

Enterprise Development Initiatives; Established an EDI project focusing on technical

skills development and soft skills training to small

black-owned firms.

2008

KPMG Transformation on track | 4

Envisioning genuine transformationKPMG’s commitment to transformation is premised on our conviction that it is the right thing to do. It is an imperative that is driven by a need to normalise the South African society. To this end, we believe that genuine transformation speaks tomakingasubstantivedifference.Ourtransformationstrategyisboldandunapologeticwithafocusonrelatinginameaningful way to our stakeholders, developing our people, and constantly evaluating our successes, remaining cognisant that it is a moving target which we have fully embraced.

KPMG’s firm commitment to transformation is also embedded in our annual performance management processes, affectingremunerationofallemployees.Ourcommitmenttotransformationisincumbentoneachindividualthatispartof KPMG, as a result it is the responsibility of all employees.

Relating to our stakeholdersAs a business that is looking to grow further, we understand that we cannot grow successfully in isolation of our broader community. KPMG is reaching out more to stakeholders to work together to ensure impactful and genuine transformation. KPMG has taken steps to play a key role in the implementation of the National Development Plan (NDP) and released the Business response to the NDP report, which outlined the background and context of the NDP.

Ourclientsareakeystakeholderandweareconstantlyworkingatengagingwiththeminameaningfulandvalue-addingway.Wehaveadoptedaculturetoprovidetoplevelsofserviceineveryaspectofwhatwedo.

We have partnered with our stakeholders in collaborated developmental effortsAfricanWomen’sCharteredAccounting(AWCA)isanexternalforumwhosevisionistoacceleratethedevelopment of qualified and aspiring African female Chartered Accountants, recognising the difficulties andobstacleswhichconfrontthemintheirprofession.Ouremployeesareactivemembersofthisforum.


KPMG maintains a strong relationship with the Association for the Advancement of Black Accountants of Southern Africa (ABASA), whose vision is to promote the professional interests of black people in the accounting profession to ensure that they realise their full potential. KPMG employees are actively involved in ABASA initiatives vigorously. National president of ABASA is Tantaswa Fubu (KPMG Executive Director, Head of HR and Transformation).

KPMG Spring School KPMGfirmlybelievesinthesaying,“Whenyougiveamanafish,youfeedhimfortheday,whenyouteachamanto fish, you feed him for a lifetime”. South Africa’s education system has gone through many challenges in the past couple of years and the up-skilling of Educators has become a priority to help in improving the standard of education. In order to aid in the educational development of South African children, teachers need to be properly equipped to do so.

In 2013, we hosted the successful KPMG Spring School in partnership with Association for the Advancement of Black Accountants of Southern Africa (ABASA) and took in approximately 70 school teachers from disadvantaged schools for a three day workshop. Teachers from grades 2 to grade 12 attended, who teach a mixture of different subjects includinglanguages,MathematicsandLifeOrientation.

The workshops focused on soft skills training that the teachers can use in their everyday work including, CommunicationSkills,PresentationSkills,TimeManagementandWritingSkills.

These courses were conducted by KPMG’s world class Learning and Development division with our accredited trainers. The aim has been to provide personal development tools to the teachers, equipping them to excel in their areas of speciality.


KPMG Spring School

We cannot grow

successfully in isolation

of our broader

community

Empowering our people and the community around usKPMGhasaclearfocusondevelopment.Whenwespeaktransformation,wealsospeaktothetransformationofourskillsbase and we aim to have a KPMG that is reflective of the demographics of South Africa.

Developing our people Wehaveinvestedsignificantlyinthetraininganddevelopmentofourpeoplewithanaggregate4%ofpayrollspentinthelast financial year.

Skills Development Empowering and developing our people is a paramount priority at KPMG. Transformation is integrated into all policies, how we see ourselves and how we interact. KPMG’s skills development includes our own unique approaches as well as support to established organisations.

Learning and Development KPMG is committed to the development of our people. This is evident from the R27 million for the period 1 April 2012 to 31 March 2013 invested in training offered by our Learning & Development.

KPMG understands the seriousness of being a training platform for hundreds of dynamic professionals each year.Weoffermandatorytechnicaltraininginlinewithrequirementssetbytheauditingprofessionandworktogether with the Advisory and Tax units to ensure consistent development.

Leadership Development Programme for TraineesKPMG is committed to playing a role in the development of black talent in the firm and South Africa in general.OurflagshipleadershipdevelopmentprogrammeistargetedatKPMG’syoungtopperformingtrainees with leadership potential, with a strong focus on black trainees. Through the programme, the leadership of the firm has invested their time in developing the future leaders of the firm and our country.

Thuthuka KPMG is proud to be a sponsor of the SAICA Thuthuka project which promotes the CA(SA) profession among previously disadvantaged learners. The project strives to identify the barriers which learners wanting to enter the accounting sector might face and implement strategies to effectively address these.OnesuchprojectistheMathsandSciencedevelopmentcamps,whichtakesplacethroughoutSouth Africa.


The Prestigious Internship ProgrammeKPMGhaspartneredwiththeDepartmentofPublicWorks(DPW)andtheSouthAfricanGraduatesDevelopmentAssociation(SAGDA),theTransportEducationandTrainingAuthority(TETA),NedbankandOldMutualtoprovideemployment for 64 graduates across the country.

The Prestigious Internship Programme is a prime example of KPMG’s commitment to partnering with government and other corporate in addressing national challenges like the high numbers of unemployed youth and particularly unemployed graduates in South Africa. The programme is amongst the highest paying internship programmes in the country and enables the graduates to gain critical skills required by young professionals entering the world of work.

Ourvision,whichissharedbyallthepartnersoftheprogramme,istocontributetowardstheNationalDevelopmentPlan and Youth Employment Accord through up skilling graduates and thereby making a significant contribution towards the eradication of unemployment in the country. Beyond the R10 million investment over the next two years; the partners will assist the graduates in acquiring relevant work experience through hands on involvement that will ultimately empower and allow for the graduates to gain work place competence, professional networks and reputations within the financial and accounting discipline.

KPMGisconstantlylookingandimplementingnewandinnovativeavenuesofattractingblacktalent.Webelievethat it is important to develop and embark on new ways of recruiting talent to ensure that we open up the profession to more black people.

KPMG Transformation on track |8

The Prestigious Internship Programme

We aim to have a

KPMG that is reflective

of the demographics

of South Africa

Procurement and Enterprise Development “Being agents of positive change”Preferential ProcurementOurobjectiveistocontinuallyincreaseprocurementfromB-BBEEsupplierswithaspecificfocusonQualifyingSmallEnterprises(‘QSEs’),ExemptedMicroEnterprises(‘EMEs’)andentitiesthatarepredominantlyblackorblackfemaleowned. 72% of KPMG procurement was spent with Broad-Based Black Economic Empowered suppliers, 12% with QSEsandEMEsand15%fromblackownedsuppliers.

Wecontinuetoworkonincreasingourspendwithempoweredsuppliers.

Enterprise DevelopmentKPMGhasinvestedR13millioninEnterpriseDevelopmentInitiatives(EDIs).OurEDIsandSocialDevelopmentInitiatives(SDIs)aredrivenbythiscommitment.Ourapproachistomakethegreatestpositivesustainableimpactwhereitisneededthemostandintheareasinwhichweoperate.OurEDIactivitiesarestrategicallyconcentrated in the largely rural Limpopo province in community projects and small & medium enterprises (SMEs) that need support.

Ourinitiativesincludeusingourownpeople’sskillsandprovidetechnicaltrainingtosmallblack-ownedaccounting firms. This has allowed us to address a crucial element of any practicing accountant – good quality training.

Small accounting firms often face significant training challenges, for example:

• Lackofin-housecapacitytoinvestthetimeneededtoresearchandprovidetherequiredtechnicaltraining

• Financialconstraintstoprocuringtherequiredtraining

• StaffmemberswhoarestillpursuingtheirstudiesasCharteredAccountants.


The EDI has been running for the past couple of years, having started in 2008 with one firm that had a staff complement of six. In 2009, KPMG engaged two additional firms and in 2010 the number of firms taking part in the initiative increased to six. This increased participant numbers to over 30. Interestingly, two of the firms participating in KPMG’s initiative are either fully owned or partly owned by alumni of KPMG. KPMG’s investment in the initiative is a day’s worth of training every second month, presented by KPMG Directors and staff, as well as the development and preparation of training material. Learning & Development, another KPMG department, eagerly joined DPP’s initiative in 2010 and provided much-needed soft skills training. The initiative continues to grow as KPMG is currently engaging with another firm that has also expressed interest in joining the initiative.

Partnering with SMEsKPMG partners with SMEs to assist them with developing and growing their businesses with regards to putting together governance structures including registrations with South African Revenue Services (SARS), financial managementandcorporategovernance,etc.WealsoplaceakeyfocusonhelpingSMEsfindstrategicpartnersthatwill enable their businesses to thrive.

WesupportandadvisestrugglingSME’s(smalltomediumenterprises)andemergingbusinesseswhowouldordinarilynot afford the services of firms like KPMG but need them. In the past year, KPMG has invested R1,8 million in time alone on EDI through Pierre Delaney’s projects, Associate Director with 36 years of experience in the running of small and medium sized businesses.

KPMG follows a particular formula when defining what constitutes success in EDIs. If the business being supported through EDI is not able to stand on its own in three years’ time, then the programme is failing. EDI must stabilise and grow the business to become sustainable, financially independent and operationally independent. There are several success stories where our partnership with businesses has led to this type of success, including the Ravele community’s Mauluma Farming Enterprises, which was under judicial administration and had no system of financial recording when KPMG got involved. As a direct result of KPMG’s involvement, including the negotiation for R7 million of debt to be written off by a local bank, the enterprise has been a tremendous success and achieved sustainability. OurdirectinvolvementhasresultedinMaulumaFarmingEnterprisesprovidingamodelforasuccessfulblack-ownedenterprise within Levuvhu.


KPMG has invested R13

million in Enterprise

Development Initiatives

(EDIs)

Caring for our community Corporate Citizenship CaringaboutthecommunitiesinwhichweliveandworkisoneofKPMG’scorevalues.Weencourageandrecognisethecommitment of our employees to our communities. By giving back to the communities in which we serve, through funds, time and our skills, KPMG aims to make a real and sustainable difference with substantial positive impact.

EnactusKPMG is a proud partner and donor of Enactus globally. Enactus is an international non-profit organisation that brings together student, academic and business leaders who are committed to using the power of entrepreneurial action to improve the quality of life and standard of living for people in need. Guided by academic advisors and business experts, the student leaders of Enactus create and implement community empowerment projects around the globe.

KPMG in South Africa is one of the founding sponsors of Enactus in the country and our staff have remained active supporters of the annual events since its establishment in 2002.

Yunus Suleman (Chairman of KPMG in South Africa) and Carl Ballot (Partner at KPMG South Africa) form part of the board of directors for Enactus South Africa. KPMG’s commitment to this partnership has also resulted in the donation of office space at the KPMG offices in Parktown, Johannesburgin2013.Wefeelprivilegedtohelpthefuture’sbusinessleadersthroughthisinnovative and exciting vehicle.

Enactus

Yunus Suleman (Chairman of Enactus in South Africa) and Jackie Mathebula (Deputy Chairman of Enactus South Africa)


Corporate Citizenship

KPMG aims to make a real

and sustainable difference with

substantial positive impact

KPMG’s Family for Literacy (KFFL)Through KPMG’s Family for Literacy (KFFL), KPMG is championing the fight against childhood illiteracy by providing foundation phase children living in disadvantaged communities with books.

KPMG runs a book collection drive three times a year. The majority of children from low-income families have no books in their homes or classrooms, and direct access is extremely limited. These children have far fewer literacy and language experiences at home and enter school at a disadvantage.

KPMG in South Africa staff members have taken the opportunity to make a difference in the lives of these children bybuyingbookswhicharethendistributedtochildren.Webelievethatthisisasignificantstepinthefightagainstchildhood illiteracy and forms part of our Education focus in terms of our Citizenship strategy. KPMG contributed R10 000 worth of books to the children of Salvazione Christian School on Mandela Day 2013.

Annual initiatives Widelysupportedbyindividuals,BusinessUnits,nationalofficesaswellasofficesintherestofAfrica,KPMGfacilitatesannualinitiativestothebenefitoflessfortunateindividuals.AttheannualWinterCharityDrive,clothes,blanketsandfoodarecollectedanddistributedtothehomeless.TheannualChristmasTreeProjectrequestseachBusinessUnittoselect a charity where KPMG staff donate a personalised gift for each person and will often host a festive party.

The Chairman’s Award

“Celebrating those that are going above and beyond to make a difference”

Commitment to communities is encouraged and rewarded through the annual KPMG Chairman’s Award. The Chairman’s Award recognise and celebrate excellence and leadership in the citizenship endeavours of our KPMG people. The award celebrates an individual that has voluntarily done exceptional community development work outside of KPMG, within their own personal capacity. The awards are presented each year to our people whose actions demonstrate that we each have the power and potential to make a real difference in our communities. The winners each receive grants to support their non-profit organisations of choice.


KPMG’s Family for Literacy (KFFL)

The Chairman’s Award

Celebrating those that are going

above and beyond to make a difference


Remaining accountable At the heart of transformation is the constant evaluation of substantive change. KPMG has internal controls to evaluate successes and gaps that need addressing as we continue this journey of transformation.

Management and Control KPMG’s Policy Board is the firm’s highest decision-making body and comprises Directors drawn from the full body of Directors, following a democratic election process. The Board elects our Chairman as well as our Chief Executive, who thenselectstheExecutiveCommittee(EXCO).TheBoardisresponsibleformonitoringandoversightactivitieswhileEXCOisresponsibleforstrategicandoperationalmatters.

Wecontinuetomakeencouragingprogressinadvancingtransformation,withanimprovementinourEmploymentEquityscoreonourlatestEmpowerDexrating.Whileouremphasisisonsubstantivetransformation,thestatisticsprovide evidence of our progress against the targets we have to reach. Whilemeetingouremploymentequitytargetsisanongoingchallenge,wehavestrategicplanninginplacetoensure successful implementation.

In 2013 KPMG achieved an improvement in our Employment Equity score – which is one of the most important elements of our B-BBEE scorecard. The increase in our points is due to the hard work that the firm has put into recruiting black talent in management, and also in ensuring that our people remain engaged and developed, directly influencing retention.

Ownership Equity KPMG operates through two legal entities. All of our Directors (shareholders) actively participate intheday-to-daymanagementanddecisionmakingprocesses.Ourobjectiveistofurtherincrease direct empowerment through participation in management, sharing in profits and ownership of the firm.

KPMG’s staff empowerment initiative, where our senior black staff share in our ownership equity, has allowed us to accelerate the achievements of our black ownership goals.

*Definition: Historically Disadvantaged Individuals (HDI) include white women in addition to black people as defined above.

56%

44%

Policy Board

Black Directors Other Directors

50% 50%

Executive Committee

Black Directors Other Directors

25%

40%

Exercisable voting rights and economic interest

Black Black female Female *HDI

>

>

>25.1%

>10.1%

Employment Equity Statistics as at 1 September 2013

Grand Total

Black Black female Female

EE Category Number % Number % Number %

Top Management 19 10 53% 5 26% 6 32%

Senior Management 702 164 23% 74 11% 304 43%

Middle Management 1032 413 40% 243 24% 583 56%

Junior Management 1283 661 52% 384 30% 708 55%

Semi-Skilled/Clerical 218 150 69% 122 56% 185 85%

Unskilled 51 50 98% 31 61% 32 63%

Grand Total 3305 1448 44% 859 26% 1818 55%

Definitions

BlackBlack African, Coloured (including Chinese) and Indian South African’s who became citizens before 1994, or could have been citizens before 1994 if apartheid had not occurred.

Top management Policy Board and Executive Committee Directors.

Senior managementNon-Policy Board and Non-Executive Committee Directors, Associate Directors and Senior Managers.

Middle Management All Managers, Supervisors and Senior Consultants.

Junior Management All trainees, junior consultants and staff with degrees as qualification.


We have to work harder at getting REAL transformation RIGHT,

in EVERY RESPECT, ALL of the time! We

continue to be passionate and positive about

working with you on our transformation journey


Ethics Line:

0800 11 KPMG (5764)

[email protected]

Contact us

Tantaswa FubuExecutive DirectorPeople & TransformationT: +27 (0)82 719 0308 E: [email protected]

Devon DuffieldHead of TransformationT: +27 (0)11 647 7063E: [email protected]

Berenice KatzManagerTransformationT: +27 (0)82 716 2210 E: [email protected]

kpmg.co.za

Kholofelo ThalakgaleManagerTransformation CommunicationsT: +27 (0)79 221 2840 E: [email protected]

Preeya NaiduSpecialistPeople AdminT: +27 (0)82 719 4008 E: [email protected]

Our trainees have exceeded all the South African Institute of Chartered Accountants

(SAICA) national average pass rates for the Initial Test of Competence (ITC) exam

KPMGTransformation

on TrackQuarter four 2013

kpmg.co.za

© 2013 KPMG Services Proprietary Limited, a South African company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. KPMG and the KPMG logo are registered trademarks of KPMG International Cooperative (“KPMG International”), a Swiss entity.

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. MC10890

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