SAP appoints first female leader in Africa following investigation

SAP Africa

Cathy Smith, SAP Africa

Cathy Smith has been named managing director of SAP Africa effective immediately, in the wake of the finalisation of the investigation into software contracts with South African state-owned enterprises Transient SOC and Eskom.

Smith has strong experience in Africa, having joined SAP from Cisco, where she was managing director for Sub-Saharan Africa, leading the development and execution of go-to-market sales and digital transformation strategies for the region. Prior to this, she spent 23 years at IBM in a variety of leadership roles. She is a fellow of the African Leadership Initiative.

Steve Tzikakis, regional president for EMEA South at SAP, said Smith is an experienced and inspirational leader.

“Africa is on the cusp of exponential growth and development enabled by digital technologies. As one of the foremost experts in driving digital transformation on the continent, Cathy is imminently suited to leading our Africa operations. We have great confidence in her ability to realise our innovation vision across our customer base,” said Tzikakis.

“Augmenting a culture of leadership, high performance and accountability, both internally and externally, is the core of Cathy’s mandate. This appointment also reaffirms SAP’s commitment to empowering women in leadership and is in line with the company’s dedication to furthering South Africa’s employment equity and transformation agenda,” he said.

Smith takes over from Claas Kuehnemann, who has been acting managing director for SAP Africa for the past eight months. While Kuehnemann will now take on a new role with SAP in Switzerland, he will continue to be a non-executive director on the SAP South Africa Board.

The appointment follows the announcement of the results of SAP’s investigation into payments made to the Gupta family and related entities, which found there were payments of around R128.6 million ($10.7 million) made to these entities. There were also indications of misconduct relating to the management of Gupta-related third parties and irregularities in the adherence to SAP’s compliance processes.

It also found that there was no evidence of any payment or attempted payment made to any South African government official or any employee of a state-owned enterprise in connection with the Transnet and Eskom transactions.

On the results of the investigation, Adaire Fox-Martin, member of the Executive Board of SAP SE, who leads SAP’s business in Middle and Eastern Europe; Europe, the Middle East and Africa; and Greater China, said, “This journey has taught us profound lessons and provided us with reasons to reflect on our business, our processes and our responsibility towards our employees, customers, partners and the South African public.

“The investigation has confirmed that even strong compliance systems are vulnerable, and therefore require eternal vigilance. While we cannot turn back the clock, we can promise to do better. To this end, we would like to reiterate the apology we made last year to our stakeholders in South Africa. We remain committed to this country and the rest of the continent, and to growing our business and investment here.”

In response, SAP’s Executive Board has instituted significant changes to its global compliance processes, including:

• Eliminating all sales commissions on all public sector deals in countries with a Corruption Perceptions Index (according to Transparency International) below 50, which includes South Africa since it has a rating of 45;
• Initiating on a global basis extensive additional controls and due diligence into relationships with sales agents and value-added resellers, including additional audit functions;
• Allocating to the SAP South Africa market unit additional legal compliance staff who are based in South Africa; and
• Strengthening SAP’s Compliance Committee in the SAP Africa region.

A summary of the investigation findings can be found here.