Financial Executives International board member Jeff Davis is executive vice president and Chief Financial Officer for Wal-Mart Stores US, and is responsible for investor relations, capital markets, treasury operations, risk management, and mergers & acquisitions. He serves on the boards of directors of Massmart Holdings and the Washington Regional Hospital Foundation, as well as the board of visitors for the University of Pittsburgh Joseph M. Katz Graduate School. Jeff is also a member of the National Association of Black Accountants and also serves on its advisory board.
Jeff earned a bachelor of science in accounting from Pennsylvania State University and an executive MBA from the University of Pittsburgh Joseph M. Katz Graduate School.
Financial Executive: What was your experience in college? You studied accounting, but was that your career goal?
Jeff Davis: I definitely fell into it. When I was growing up I used to watch the Brady Bunch. Mike Brady was an architect, and I thought, “Wow! That was kind of neat.” I loved the house. That whole American dream type of thing. When I originally went to school, it was to be an architect. I was accepted to Pennsylvania State University’s (Penn State) architecture program at the College of Arts and Architecture. During college I was very balanced between doing very well in the arts and sciences. Architecture was the one area that would allow me to explore both.
But I did end up switching out of architecture after about four semesters. It was interesting if I switched into the Smeal College of Business inside Penn State, most of my architecture credits transferred over and I could still finish in four years. Then I just doubled down and selected accounting with a minor in finance.
FE: What prompted the change?
Davis: To be honest, it was my next-door dorm neighbor. I lived in the dorms my entire time I was in Penn State and my next door neighbor’s father was a regional partner with, at that time, one of the “Big Eight” accounting firms. If I remember correctly, he was with Deloitte, Haskins & Sells.
I remember having conversations with him from time to time when he was up visiting his son about the fact that accounting and finance was the lifeblood of any business, and that I could not go wrong with a solid foundation in that particular area. So, for me, as I was thinking about what I might do after leaving the architecture discipline, I said, "Well, here you go. I can't go wrong. If nothing else, I'll always have a great foundation.”
FE: Any regrets? Do you always look at buildings and think about what they're doing right and wrong?
Davis: You know, I do. I can't walk by structures without admiring the art as well as the science behind it. But, I also think about the fact that architecture is a very difficult field to be successful in. The opportunities are much less, and I am so glad that I made the move into accounting and finance. And I took a path of public accounting, which gave me a great exposure to a lot of different businesses early in my career.
FE: You also continued your education with an MBA. Do you feel that it was something you needed to advance your career in finance?
Davis: I knew that I never wanted to stay in public accounting long term, and my desire was quite honestly to go back to business school and get an MBA. That would qualify me to do things like mergers and acquisitions. I love business combinations and I love how conceptually you could add one and one and get three and build value. My desire was always to continue my education and build my finance and corporate finance expertise, such that it could qualify me to possibly pursue a career in that type of realm, where MBAs were much more prevalent and required.
FE: What was your first finance job out of college?
Davis: I went straight to the Big Eight public accounting firm Peat, Marwick & Mitchell, now known as KPMG. My first assignment as an associate on the audit team — and my first client — was one of top 10 largest banks in the U.S., Mellon Bank [now Bank of New York Mellon].
Starting out, I was relegated to doing more mundane things, but it just gave me great exposure. I realized that if I worked hard and differentiated myself, I could achieve a certain level in the organization and do certain things I really enjoyed. So going into banking gave me great exposure.
FE: What did you enjoy so much about banking as an industry? What was the interesting part about that?
Davis: One of the things I spent a lot of time on my first several years was looking at some of the largest bank exposures, as well as the customer exposures of the bank. I was getting into the weeds and analyzing different companies and how they were using the loans that were extended to them, how they were growing their business and what businesses were trending towards a workout.
When I was following these companies I became very interested in the question of whether success or failure was something cyclical or industry-wide. Or was it actions of the company itself? That really whet my appetite to ultimately pursue an opportunity in an operating business. Rather than being a consultant — or looking at things from a rear-view mirror — actually getting in and having to make some of those decisions, and driving and creating value.
FE: What was that transition like from public accounting into industry? What's been your experience?
Davis: I left public accounting after four years and I moved to a private equity world. During that time I held a number of different positions in the private equity group before I went into industry.
Nonetheless, whether I went straight from public accounting or from this private equity group, I found the pace at which life moves in an operating business is very different than any of the other worlds that I had been in previously. That had to be the most unnerving experience that I ever had. The second thing for me was quite honestly the immediate feedback that you would receive as a result of some actions that you would take.
FE: Good and bad?
Davis: Exactly. But the thing that was most rewarding for me though, was that I found I could see more readily and more specifically the actions that I was involved in working with a team. How I was either creating value, solving issues, or building and developing talent with the new organization, and that was intoxicating at times.
FE: Out of all those things, what do you still find most enjoyable?
Davis: At this point in my career, I gain tremendous pleasure out of developing talent. I think about developing the next generation of talent that's going to, hopefully, far exceed my accomplishments and in a much shorter period of time with a lot less headaches. [Laughs].
I really do enjoy sharing my perspective with people, but most importantly gaining their perspective. I'm constantly learning, I'm constantly improving, and I find that interacting with people is the best way to personal development. I tell people all the time that, I love mentoring or sponsoring, but it's a sort of double-edged sword. The individual I'm mentoring or working with also has a responsibility to chip away at this block.
FE: Can you give me an example of somebody in your career that mentored you or changed your approach to work?
Davis: Absolutely. There was a partner at a firm who was the client engagement partner with the company where I was on staff. We were tackling some very difficult issues and one of the things that she said to me, and I remember it just so clearly, was that, “You only get to lose your personal credibility and forsake your professional ethics once, and don't ever get on that slippery slope.”
FE: Do you think that's being taught nearly enough right now to younger financial professionals; the softer skills of ethical decisions?
Davis: What's interesting to me is that I have the opportunity to interview prospective students coming out of school today and they have a higher sense of ethics and a higher ethical foundation. They make reference to some of the courses that they've taken and then they search for companies that have that higher moral compass, and quite honestly, focus on social responsibility along with that.
FE: What role have professional organizations like FEI or The National Association of Black Accountants played in your career?
Davis: For me it's always about advancing those organizations and being a part of, hopefully, the leadership that helps craft the focus and strategic direction.
I believe that FEI and NABA — as well as some others that I'm involved with — are essential organizations for people to continue building their “toolkit.” By taking part in the membership you are well-prepared for the broader issues and you can act dynamically in order to address those issues that come along in our everyday lives and in our professions.
But I also see the opportunity to build relationships. This goes beyond just necessarily networking for the next opportunity, but actually building relationships and a network of people who can help broaden my perspective.
You know, one of the things that I feel very strongly about is diversity of thought. You often get that when you have an opportunity to interact with, in my mind, successful highly energized individuals that are willing to put forth their time from volunteering on the effects of the words as well as the underlying operating entity itself.
FE: What about professional diversity and where do you think the industry is as far as getting a minority and African American students into the profession? Does more need to be done, is there enough being done? What can be done?
Davis: I find that the Big Four, for example, do it very well. And I continue to just be amazed at how they continue to reach in to a number of different communities. Not only to the African American community, but also to the Latino, Hispanic, and Asia-Pacific and Islander.
I think within corporate America, we still struggle a bit. For me, it's about starting with a good pipeline.
And that pipeline often extends earlier into someone's academic achievements or before they graduate from college, but many times it's reaching all the way through to freshmen, sophomores, juniors. It’s about developing relationships, identifying how and what can be done to help make sure that people coming out have the qualifications and the expertise that is necessary.
And sometimes it's helping to direct that process and I find that the public accounting firms do that well. And there's other organizations out there that are attempting to do the same. I used to be involved with a group years ago called INROADS. It's a pre-college and college business prep organization focused on development of African Americans for business and it runs across all different disciplines, it's not just accounting or finance. It's marketing, it's really advancements in sort of non-trade, if you will.
FE: Larger companies can devote resources towards diversity, but how do you help smaller companies, or mid-sized companies that need to diversify the worforce?
Davis: They just partner with those organizations. I'll give you an example of one. I just got involved in October with the National Urban League. And one of the things that I continue to think about is all the different sorts of entry points that a number of different companies and individuals could have with the National Urban League. Their focus and attention is on the development and empowerment of individuals to be able to lift themselves to higher levels of achievement. I think that it has to be more than check the box.
And when it gets beyond that, that's when people start to realize and start searching for the right opportunities for them to partner with and/or initiate something on their own, and then how you make it sustainable.
Like anything else, organizations are going to have some level of turnover. So you just can't say “Okay, we hired X, Y, Z individuals and you know, we're good.”
You’ve just got to constantly work at this thing every day.