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Marcopolis presents Kenya Report focused on topics such as investments, doing business, economy and regional integration, featuring interviews with Kenya's leaders. The sectors under review in this issue are agriculture, banking, energy, industry, telecom, IT, tourism, logistics and many more.
InterviewsAugust 01, 2022
RSM Eastern Africa: A Leading Provider of Audit, Tax and Consulting Services in the Region
Ashif Kassam, Executive Chairman at RSM Eastern Africa
- Written by Sandra Francisco
- Published: August 01, 2022
Interview with Ashif Kassam, Executive Chairman at RSM Eastern Africa
Could you give us a historical background of RSM Eastern Africa?
I founded RSM Eastern Africa in February of 2004. At that time, me and my other founding partner realized that there was a need for a mid-tier firm that would cater to quality and the market gap that was existing at that time. We started this firm with a small team of six people in Nairobi. Then, in 2007, we expanded to Dar es Salaam in Tanzania, and in 2008 to Mombasa. In 2013, we moved to Uganda. Currently we have four offices across East Africa. Initially, we were members of HLB International, which was one of the leading global networks. But in 2009, we moved over to RSM. The reason is that we needed an international firm which had a wider reach and a wider scope, and could really help us develop some of the lines or services that we had. We did research on a number of firms, talked to a number of international networks and settled with RSM. Globally, RSM exists in about 123 countries now, and has 850 offices, employing 51,000 people, with a turnover of USD 7.26 billion. It is the leading provider of audit, tax and consulting services to entrepreneurial growth focused organizations globally. As RSM Eastern Africa, we play a very active role in that growth and in that support for RSM.
Give us a comprehensive view on the scope of business and all the services you offer.
As a firm, we are divided into three overall lines which are audit, tax and consulting. In audit, we basically handle statutory audits and reviews of organization. This is all the legal side, which is required by the law where companies need to get audited. In all these African countries, audit is pretty much necessary for all the countries, the exemptions are very limited. So audit is a primary focus. And probably about 50% of our income comes from the audit line.
Then, we have the tax line, which we have broken down into three different segments. The first is the compliance segment, where we help individuals and corporates file their returns and ensure that the taxes are paid and help them with the payment of taxes, any general queries relating to the income tax returns. The second is the consulting services. This is where we help both local and international clients understand what the tax obligations are, help them with tax restructuring and tax due diligence. We also handle some large tax cases for organizations that are undergoing audits or investigations by the revenue authority. The third part of tax is transfer pricing and international tax whereby we deal with global tax and establish how companies operating in these three countries are impacted by the local rules. For each of these three, we have separate teams with over hundreds of years of experience between them. So it is a very solid taxing.
The third aspect is consulting, which is broken down into four different lines. The first is business process outsourcing. We help international companies who are setting up in Kenya with the compliance aspects. Most of our clients are either international companies or medium enterprises that want to outsource their payroll and accounting functions. The second is transaction advisory. We do a fair bit of transaction advisory work, buy side, sell side, where we advise companies on transactions. The third part is around dispute resolution and forensic accounting where there are different disputes and we either act as mediators or help companies resolve their disputes. And then the fourth part, which is the increasing line, is family businesses. What we are realizing is that in Kenya, there are a lot of first and second-generation family businesses, but as the third or fourth generation is coming into play, the values are not aligned, and the business needs a re-look into how the family should operate, who should manage the business, what the internal component of the family is going to manage the business vis a vis a bigger family that needs to be supported, and how the entire structure plays in to ensure that there is a coherent family structure.
What makes you unique and stand out from the competition?
The first aspect is our values. Even when we interview staff and recruit staff it is by a value fit. The six values that we have around respect, integrity, teamwork, stewardship, knowledge and excellence form the foundation of what we do. And the second part is our brand promise to our clients which is made up of three fundamentals. The first is getting it right the first time. The second is guaranteed delivery on time and scope. And third is leadership accessibility. We ensure that in each of our interactions with the client, we are actually adhering to those. Our recruitment, our hiring, firing, our internal discussion are all about values. Over the last five years, that has been a critical part around how we get people on board, but also our staff evaluation and 360 degree feedback is all around value fit. And because of that, anybody who deals with RSM knows that it is the culture of RSM that we will not compromise those values. The second is quality. Even being a small firm from the time we were 6 staff to 205 staff today, our quality and training is the same. And that is reflected in two very important aspects that for our previous network HLB International and the Kenyan Institute, KISPE, we actually wrote their audit manuals for them in 2007, when this was a two partner firm and writing a global manual for an international network coming out of Africa was something that had never happened. Because of that, I was then nominated to sit on the global body that develops auditing standards called the International Audit and Assurance Standards Board. For four years, I was the only member from Middle Eastern Africa sitting on that board. So quality and how we train our staff becomes critical. And the key part of that is that we ensure that partner time is spent on all the jobs and the partners or the key drivers are involved in the delivery of the service.
What type of clients do you deal with?
We work for various sectors including manufacturing, real estate, agriculture, logistics, hospitality, tech, education, and health. We provide all the services mentioned above to all these sectors. But generally, the two main areas are audit and tax. We are now doing more and more transaction advisory, which is more focused on agriculture and manufacturing at the moment. Those are the two sectors where we have done a lot of work. Understanding manufacturing has helped us take some very challenging audits where one needed to get in and do a major clean up. Or where one needed to get in and structure the business. One thing which is now public is that we have helped restructure one of the Kenya’s oldest manufacturing company called Kaluworks, which was under administration. And we were called by the shareholders, away from the administrator and from the banks, to independently go in and look at restructuring. It was a very tough restructuring, but it was accepted by all the shareholders and has just been approved by the court.
What are some of your success stories or highlights since inception of the company?
One is being in four countries in a very short period of time and doing it living within the value system, growing from 6 to 200 staff over that period. In terms of quality, writing the global audit manual for HLB International for a two partner practice for the 13th largest network would be the second success story. The third success story is our staff mix today, 42% of our staff are female. In our governance team, 50% of our governance team is female. But more than that, we do not believe that we have employees. We treat everybody as a family and today 15% of the profits of the firm go to staff in a bonus pool. Then our training and quality which we make sure that we maintain right through. In terms of the jobs we have done, I won some large tax cases. Recently, the two biggest jobs where we have been successful, were the restructuring of Kaluworks, where the assets were less than 12% of the total debt that existed, and helping the Kenya government negotiate 26 billion claims by France Telecom for breach of warranties. We were able to guide the government through the entire process and negotiate the claim very favorably for them. It is a tough job where you need more than just an audit or a basic tax advice. Understanding the financial implications, the tax implications, the legal implications, bringing them together to find a solution, is the biggest success factor.
Is RSM into any CSR currently?
We are moving away from CSR to ESG environmental, social and governance, which are becoming three critical parts. We have a very strong governance team, even though being privately owned. We have 10 people on our governance team of which 50% are female members, but also the majority of the governance team is below 35 years of age and they are the ones who drive a lot of the technical part of the governance team. The second part of governance is setting very strong KPIs so that everybody is held accountable for their performance. The third is attributing 15% of our profits to our staff. And the fourth is in line with our values, we just got certified as a blue company in Kenya. And that means that you are a corruption free company based on various things. There is a new initiative in Kenya to be certified as that. On the social side, it is how we deal with the environment and the staff and especially the staff training and development. And we believe that it is our duty to ensure that staff who are within our organization or who leave the organization for different experiences actually take back from RSM the key aspects that help them develop themselves. From an environmental point, we have not done much because we do not impact the environment directly as a professional services firm. But what we are now looking at in 2022 is setting up a carbon neutral policy where we want to see what our own carbon footprint is as a professional services firm, by the internal usage or things like external travel, and then invest in trees and other initiatives that actually neutralize our carbon footprint. That is the third aspect that we are looking at, at the later part of the year. And before that, we want to review all our internal governance structures and even our staff structures to ensure that all KPIs that we have link to all these three areas.
What is your vision for RSM in the next three years?
Our vision is driven by our purpose. And the purpose is that in RSM, we deliver the power of being understood to our clients, colleagues, and community. And we believe that if you understand these three critical players well, then your growth is automatic. Instead of focusing on growth in the numbers, what we want to do is be an integrated company with HR at the core of it. The second part, which we have been working on for the last three years, is the alignment of our strategy, our execution, our team, and cash flows. And that brings growth as the byproduct. From a service line. We really want to focus on family business consulting, because a lot of our clients are family businesses that will lead us to growth.
What is your inspiration and philosophy in life?
I have one personal purpose which I try to live by every day and that is to impact positively each person I meet. I want to touch the heart and the mind and do something positive for every person I meet each day. And that is dependent on the four values that I have. One is building long-term trust and respect for people that I meet. In this world, it is very easy for us to look at short-term results, but I always believe in the long-term results and the respect. Second, is being authentic to myself and to others. I try and not fool myself, I look at the reality and assess myself within that reality and see where I am. So self-evaluation is critical. The third is being a pillar to my family and friends. Fourth is giving back to the community and fifth is upholding my professional values. Both the founding partners and even our third partner who is our CEO, pretty much share these values. And that has become the core of the firm. Then I have got three key boundaries around which I work. The first is not making money the sole purpose of my life. The second one is that if I promise I have to deliver. And the third one is not taking a leadership role for the sake of the role itself. If I am taking a leadership role, I need to make sure that I am making that impact. And if I am not making that impact, then I would rather step down from that leadership role. So those really drive what I do on a day-to-day basis in terms of both my personal growth and my family growth, and that is something I read every morning to ensure that I do not waiver away from those principles.
Is there anything else you would like to mention?
I used to get distracted by a lot of things, and over the time as you grow successful, you also develop some personal pride. Then I joined this organization called the Entrepreneurs Organization, for which I currently am the President of the Kenya chapter. And it is a peer to peer network organization of entrepreneurs. There are about 14,500 members globally. And that organization really helped me focus on where I am. This year as the President, my aim is to try and get people who really want to focus on themselves, family and business, and make them members of this organization. The Entrepreneurs Organization has helped me change my thinking, my personal perspective, but also what I am doing in business, due to the experience share that the EO members have given me. That has been a critical part. The second one is I am part of the Ismaili Community. I am the Vice President of the community in Kenya. The role that I play in this community has also exposed me to a lot of things, especially how do you address poverty and how do you reduce poverty? Those two memberships have really held me accountable. Besides, with all the things that I do, my wife pretty much handles the personal side of life. So those are the three pillars that I work on apart from RSM Eastern Africa.
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