Evon Jeewan, Principal at Bravura, an investment banking firm specialising in corporate finance and structured solutions services now in its twentieth year, considers what South Africa needs to bring about real transformation of our banking and financial services sectors.
Across the globe, CEOs from some of the world’s largest banks and financial service entities are vocal about the need for transformation. Yet in reality, the sector globally displays sluggish results in transformation. In South Africa, there are differing views on how far our financial services entities and banks have come and what requires remedy. Could it be that in terms of transformation we are failing to focus on what counts?
So asks Evon Jeewan, Principal at Bravura, an investment banking firm specialising in corporate finance and structured solutions services now in its twentieth year. “Financial services organisations around the world seem to have a struggle with translating what has termed diversity and inclusion (D&I) strategies into action. Recent research by PwC which spanned five geographical regions and over 14 countries indicated that while 80% of organisations stated that D&I was a priority area, 40% of respondents believed that diversity was still a barrier to employee progression. Other research by Deloitte points to a show of willingness from the world’s CEOs in articulating this as a priority area (with a 32% jump from 2014 to 2017).
Jeewan says, “In reality, the picture is quite different as evidenced in the recent request by the US Congress for 39 of the country’s largest financial institutions to quantify their D&I policies from 2015 to the present day. This was as a result of data indicating that female representation in financial institutions had remained unchanged since 2015 and Black women representation had decreased from 6.5% to 6.3%.”
Further research indicates that in the US financial services industry, Black women represent one in five employees at entry levels, but they virtually disappear from representation at higher levels. Within 39 financial services companies surveyed in the US in 2017, only 10 Black women were in C-suite roles. And on the global stage, only 19% of top executives are female in the financial services sector.
In South Africa, banks control in excess of R5 trillion in assets. The six largest banks control 91% of these assets. Our financial system is ranked 18th out of 140 countries in terms of the soundness of banking in the World Economic Forum’s 2018 Global Competitiveness Report.
South Africa’s contested space
But whether or not the financial services sector is meeting South Africa’s transformative mandates and policy requirements remains a contested space, with different interests presenting differing views. For example, a 2017 Financial Mail ranking survey of 465 stockbroker analysts found that only 18% of stockbroker analysts were women and 14% were black women. A survey by 27four Investment Managers that measured transformation of the financial services sector revealed that of R4.6-trillion industry assets, only R415.5-billion (just 9%) is managed by black firms.
The Association of Black Securities and Investment Professionals states that it wants the financial services sector to be more reflective of South Africa’s demographics and should be radically transformed. Meanwhile, the Banking Association of South Africa reports that there has been a 26% increase in the number of black board members from 2016 to 2017, with a 40% increase in the number of black women at board level.
Strategies to develop women
“Particularly in South Africa’s investment banking sector it remains a challenge for young females to get a foot in the door of the investment banking industry,” says Jeewan. “In practical terms women – especially so Black women – still have to work a great deal harder to carve a place for themselves in investment banking which remains male-dominated.”
Jeewan adds that at Bravura they’ve seen an organic skew towards male employees which she believes is the result of a recruitment pipeline in South Africa that continues to attract and produce male candidates. To remedy this, the company is actively searching for female candidates at all levels.
Additionally, Bravura has a graduate programme aimed specifically at attracting young, talented, Black female graduates, and designed as an intensive programme in which the newly-qualified graduates are expected to become active members of the corporate finance team. Selection criteria require that the candidates are strong all-rounders, having produced exceptional academic results in parallel to leadership accolades. Jeewan adds that the calibre of applicants received indicates that there is ample talent out there.
“Last year Bravura selected two graduates who are now working with – and learning from – the Bravura team for a period of twelve to twenty-four months, with the hope that they may become full-time employees at the conclusion of the programme.
“This year, both graduates will be undertaking the JSE Supervisory Development Programme (SDP). Although fast at integrating themselves into the team, becoming involved in live deals and taking on everything at once, it is up to us as mentors to guide and pace them. It is very difficult for non-CAs from different academic backgrounds to break into the Corporate Finance market. The Bravura graduate intern programme aims to bridge this gap and provide opportunities for talented, driven youngsters from slightly different academic backgrounds to move into the mainstream investment banking space.”
Beyond ticking boxes
But, says Jeewan, if companies are committed to speeding up the transformation of the investment banking and broader financial services sector they need to move beyond a tick box mentality. “Companies should be adopting initiatives that focus intensively on the individual’s ability and potential growth in a meaningful way that meets their specific needs.”
Transformation, concludes Jeewan, needs a concerted effort by multiple parties, from pipeline through promotion to independent dealmakers and support and mentorship must be undertaken with a long-term view. “We need to focus on innovative transformation strategies and their implementation now, rather than mulling over the numbers. If we can make this happen as a sector, then we are on the right track to bringing about true and sustained transformation.”
Categories: B-BBEE, Corporate Finance, Economy, News
Published by: Black Business Quarterly