PROFILE: Freeman Nomvalo’s bid to restore the auditing profession’s reputation
Restoring the reputation of a profession is the main task of the new CEO of accounting body Saica
Four years ago, Freeman Nomvalo hung up the civil servant boots he had worn for more than 15 years to become his own boss, advising companies about leadership practices that could help them navigate through change.
But when the SA Institute of Chartered Accountants (Saica) needed a captain to steer the sinking ship that is the CA (SA) designation out of a reputation storm, he could not resist coming back into the public eye.
In January, Saica announced that Nomvalo had been appointed as its CEO, filling a position left vacant when Terence Nombembe was seconded to the Zondo commission of inquiry in March 2018.
His No 1 task was to restore trust in the accounting profession, following a number of high-profile corporate governance failures involving Saica members. Six months in, Nomvalo says he is still up to the task but he’s learning to be patient.
"To rebuild the image of the profession is going to take time," he says. "It’s too early to make an assessment of how far we’ve come. But there is hope because an overwhelming majority of our members are people of integrity."
Because Nomvalo spent nine years as SA’s accountant-general, it would not be far-fetched for the public to expect him to be an encyclopedia of accounting standards in SA. The accountant-general prescribes accounting and reporting standards for all government entities and state enterprises.
While the reporting standards for the public and private sector have some differences, Nomvalo says being at Saica is like coming back home. His new job does involve some engagement with the bodies that set accounting standards for private companies. However, most of his time is spent managing the reputation of the accounting profession. So what is Nomvalo’s plan to achieve that?
When he joined Saica, the board had already mapped the direction that the organisation needed to take. This includes the decision to review Saica’s governance framework and change its constitution. Nomvalo did this and most Saica members voted in favour of the relevant resolution at its AGM in June.
The change in governance structure means Saica will introduce two to three non-CA members to its board. Saica has also revised its code of conduct, giving more guidance to members on how to probe further when they suspect that there may be ethical concerns on companies’ financials.
With these tasks ticked off the list, Nomvalo’s next assignment is to convince the public that Saica is dealing with members who were complicit in state capture and other corporate governance failures, and that discipline is meted out equally to all members.
It has been accused of acting too slowly or not acting at all against members such as Markus Jooste and Anoj Singh, despite a mountain of alleged wrongdoings. Nomvalo says after the roadshow he had in March, where most members raised the question of suspending people who have brought the reputation of the profession into disrepute, Saica began looking at the desirability and feasibility of suspending members.
Earlier this month it announced its first suspension, of Singh — former CFO at Transnet and Eskom — pending the outcome of his disciplinary hearing. Nomvalo has promised that more will come.
"You will see action being taken and you will see it being taken pretty soon."
In the six months that he’s been at the helm, Nomvalo says he has rallied an army of people behind him who are worried about where the profession is today.
"It means that I’m not alone in this responsibility," he says, which has given him strength to tackle the challenges in spite of the criticisms levelled against Saica.