A question I like to ask in interviews is ‘what have you learned about your self recently which was impactful?’ It’s something I also like to ask myself because if I am not learning it normally means that my eyes and mind have been closed and with a closed eyes and mind I am metaphorically in the dark.
My story this week is about a recent instance of blinkered judement on my part, for which the the moral might be that you are never to old to learn or maybe there is no fool like an old fool – you can decide. You have heard of the accountant who goes broke, the doctor who gets sick and the lawyer who loses his court case, so I am going to tell you about the recruiter who can’t recruit and that’s me! This is how it played out:
If the only thing that is constant is change then in today’s rapid-changing world, it’s critical you swiftly, efficiently and effectively respond to that change. In the world of work it is no different. When I think about my own small businesses, only 6 months ago we were considering a whole host of strategic options that today have been thrown out or turned on its head. Where we were thinking of closing a business, we are now aggressively expanding it, instead of designing a leaner organisation we are looking to fatten it up to fulfil expansion plans and staff who were critical and integral to our business have left and there is a new team on board.
I don’t have a high staff turnover and when staff do leave its mostly because people find better opportunities as a result of having joined my business at the entry level and then acquire more skills which they use as a stepping stone to move to bigger or better jobs. Our environment trains graduates well because we insist on high standards of quality, encourage people to use their initiative and judgement and all of this takes place in a work environment which is constantly changing and is thus, challenging.
Add this to the mix of a willing graduate with potential and what we spit out in a few years is a pretty worthwhile and valuable product. Suffice to say that a few of these products have been picked up by other companies which has left a few gaps on our shelves and so we have been hunting for replacements. In one of our mission critical roles we promoted one person to a more senior position in a sister company and in another the staff member left for a fabulous opportunity that even if I could stop I wouldn’t because it is such great and deserving opportunity. So I am sweating, just a little but you know what, that’s change so I just get on with the recruitment for two replacements – pronto!
The problem was that like the plumber with the leaky taps, I failed to carry out due diligence at my own home. My recruiters brain was clearly focussed elsewhere when one of the people whom I employed turned out to lack passion and energy, even though I knew that these were prerequisite capabilities for the job. In my mind I argued (albeit rather sloppily and lazily) that as she was intelligent (the test results proved this) this was enough for the hire, all the while ignoring my knowledge, experience and research which posits that intelligence on its own is not an indicator of job success.
Similarly, but on the other hand, the next person I employed had passion and energy (loved the bubbly person in the interview) but was short on the brain power (the test results proved this) which is needed to handle the parts of the job where initiative and judgement is required. Now while I subscribe to recruiting for strengths and not for the absence of weakness you can’t ignore critical essential characteristics required for a job, otherwise you are going to run into trouble – and I did.
Things are tried and tested for a reason and while you may get anomalies and outliers from time to time – surprises which for unknown reasons work – for the most part you need to work with what you know to be sound and true, whether it is in recruitment or making a purchasing decision as a buyer. Here is what I know and what I ignored: Suitability for a job and predicting job success is best measured on a score card.
There are a number of boxes which you have to tick, and while you do not necessarily have to tick every box the more boxes you tick the better the chance that you have of doing well in the job. The more unticked boxes the higher the risk and the chances are of getting it wrong. In both these instances I had forgot the score card, electing in the one instance that intelligence was enough and in the other passion.
So I am still learning, learning that I can get it wrong, ignore what I know and make mistakes. It’s humbling but really its more annoying than anything else. I took a snapshot of a personality, lost sight of the full picture, wasted a whole bunch of time and energy in the process and committed the cardinal sin of recruitment which is to recruit for the appearance of one characteristic or trait.
It’s like the halo effect where we make an immediate judgement based on one positive characteristic of the person, in this case intelligence or passion. This distorts decision making and assumes that from that sole positive trait, that is suffieicnt to make them suitable candidates. So now it’s back to the drawing board after a flawed recruitment process that led to a failed recruitment. As one of my staff remarked, jokingly, I hope, “Your halo has slipped, Mr White!”
The world in which we live is a criminally unequal one. In his iconic 1945 allegorical novella, Animal Farm, a satire on the facetiousness of the then Soviet Empire’s crackbrained experiment with a command economy, the legendary George Orwell in my view hit the nail squarely on the head when he said all animals were equal but some animals were more equal than others.
That’s the never-ending dichotomy of the so-called First World and its polar opposite, the so-called Third World as Orwell’s cleverly-couched diatribe applies as much to the tread-of-the-mill laissez faire economics of our day as it did to Marxist-Leninist Russia a generation back.
Even as the Nation of Israeli braced to militarily take possession of the Promised Land, General, its top three senior citizens, namely Moses, Aaron, and Miriam, were not destined to share in this god-conferred bequest. All three died before the lottery was won.
Financial Reporting (Amendment) Bill, 2020 and Accountants (Amendment) Bill, 2020 were expeditiously passed by parliament on Thursday.
What are these two Bills really about? The Bills are essentially about professional values that are applicable to auditors and accountants in their practice. The Bills seeks to basically enhance existing laws to ensure more uprightness, fairness, professional proficiency, due care, expertise and or professional technical standards.
The Financial Reporting Act, 2010 (FRA) establishes the Botswana Accountancy Oversight Authority (BAOA), as the country’s independent regulator of the accounting and auditing profession. BAOA is responsible for the oversight and registration of audit firms and certified auditors of public interest entities.
In the same vein, there is the Accountants Act, 2010 establishing the Botswana Institute of Chartered Accountants (BICA) which is responsible for the registration and regulation of the accounting and auditing profession. This consequently infers that some auditors have to register first with BICA as certified auditors, and also with BAOA as certified auditors of public bodies. So, the Bills sought to avert the duplication.
According to Minister Matsheka, the duplication of efforts in the regulation of auditors, which is done by both BICA and BAOA, creates a substantial gap on oversight of certified auditors in Botswana, as the two entities have different review procedures. He contends that the enforcement of sanctions becomes problematic and, thus, leads to offenders going Scot-Free, and audit quality standards also continue to plunge.
The Financial Reporting (Amendment) Bill, 2020, in the view of the Minister, brings the oversight and regulation of all auditors in Botswana under the jurisdiction of the Accountancy Oversight Authority and that Bringing all auditors within one roof, under the supervision of BAOA would therefore reinforce their oversight and significantly enhance accountability.
He also pointed that the Bill broadens the current mandate of the Authority by redefining public interest entities to include public bodies, defined as boards, tribunals, commissions, councils, committees, other body corporate or unincorporated established under any enactment.
This covers any company in which government has an equity shareholding. In order to enable the process of instituting fitting sanctions against violation of its provisions, the Bill clearly lays down acts and lapses that constitute professional misconduct.
This Bill further strengthens the sanctions for breach of the Act by public interest entities, officers, firms, and certified auditors. Reinforcing the law with respect to such sanctions will act as an effective deterrent for breach of the Act.
The Accountants Bill also strengthens the current mandate of the Institute by making it obligatory for those who provide accountancy services in Botswana to register with the Institute, and for all employers to hire accountants who are registered with the Institute.
The Minister reasons that in line with the spirit of citizen empowerment, this Bill proposes reservation of at least 50% of the Council membership for citizens. This, he says, is to empower citizens and ensure that citizenries play an active role in the affairs of the Institute, and ultimately in the development of the accounting profession in Botswana.
The Bills come at a point when Botswana’s financial sector is in a quagmire. The country has been blacklisted by the European Union. Its international rankings on Corruption Perception Index have slightly reduced. According to recent reports by Afro Barometer survey, perceptions of corruption in the public service have soured and so is mistrust in public institutions.
Rating agencies, Standard Poor’s and Moody’s have downgraded Botswana, albeit slightly. The reasons are that there continues to be corruption, fiscal and revenue crimes such as money laundering and general unethical governance in the country. There are still loopholes in many laws despite the enactments and amendments of more than thirty laws in the last two years.
One of the most critical aspect of enhancing transparency and accountability and general good governance, is to have a strong auditing and accounting systems. Therefore, such professions must be properly regulated to ensure that public monies are protected against white color crime. It is well known that some audit firms are highly unprincipled.
They are responsible for tax avoidance and tax evasions of some major companies. Some are responsible for fraud that has been committed. They are more loyal to money paid by clients than to ethical professional standards. They shield clients against accountability. Some companies and parastatals have collapsed or have been ruined financially despite complementary reports by auditors.
In some cases, we have seen audit firms auditing parastatals several times to almost becoming resident auditors. This is bad practice which is undesirable. Some auditors who were appointed liquidators of big companies have committee heinous crimes of corruption, imprudent management, fraud and outright recklessness without serious consequences.
There is also a need to protect whistleblowers as they have been victimized for blowing the whistle on impropriety. In fact, in some cases, audit firms have exonerated culprits who are usually corrupt corporate executives.
The accounting and auditing professions have been dominated by foreigners for a very long time. Most major auditing firms used by state entities and big private sector companies are owned by foreigners. There has to be a deliberate plan to have Batswana in this profession.
While there are many Batswana who are accountants, less are chartered accountants. There must be deliberate steps to wrestle the profession from foreigners by making citizens to be chartered. It is also important to strengthen the Auditor General. The office is created by the constitution.
The security of tenure is clearly secured in the constitution. However, this security of tenure was undermined by the appointing authority in many instances whereby the Auditor General was appointed on a short-term contract. The office is part of the civil service and is not independent at all.
The Auditor General is placed, in terms of scale, at Permanent Secretary level and is looked at as a peer by others who think they can’t be instructed by their equivalent to comply. Some have failed to submit books of accounts for audits, e.g. for special funds without fear or respect of the office. There is need to relook this office by making it more independent and place it higher than Permanent Secretaries.