Sim Tshabalala as CEO: A decision four years too late!

Standard Bank’s joint-chief executive structure was absurd from the start.
Standard Bank CEO Sim Tshabalala. Picture: Moneyweb

Let’s call Standard Bank’s “unconventional” joint-group chief executive structure what it really was all along: a cop out. The board (one assumes) was clearly not confident enough in any of the three men who were appointed deputy group CEOs in 2009 as part of the bank’s “carefully planned management succession process”. So, it devised a compromise structure that put two candidates in charge when it surely knew that, over time, this would not last. And the third – the snubbed Peter Wharton-Hood who became COO reporting to one of the joint CEOs – resigned six months later.

Fast forward four-and-a-half years and Sim Tshabalala gets the top job in an announcement – that can surely not be taken completely seriously by investors – which boldly states that “the board is satisfied that the structure, which was necessary in 2013, has met and in many respects exceeded expectations”.

How carefully thought-out was this all again?

Many argued at the time (and since) that Tshabalala was the natural choice. He had run the personal and business banking business unit since 2006 (Ben Kruger ran corporate and investment banking between 2006 and 2008) and in June 2008 was made CEO of Standard Bank South Africa, the group’s largest business. Unless it had ambitions of doubling down on corporate and investment banking (doubtful after the global financial crisis in 2007/2008), why not choose the executive running your retail bank and your largest division?

But, there were all sorts of private murmurings and public opining that “perhaps” Tshabalala was “too inexperienced” (then aged 45) for the role as CEO of the country’s largest banking group by market capitalisation (a position since taken by FirstRand). There were also excuses offered of him being too much of a “nice guy” whereas Kruger was “tough as nails”. Cynics suggested that he needed a “minder”.

The fundamental problem with the Standard Bank Group’s decision in 2013 was that this set back our country’s transformation project. All too often, the justifications for the lack of diverse leadership teams and boards (where, mostly, racial and gender representation is downright embarrassing) is that those appointed are “the best people for the job”. This is especially true of the commentariat on this site who not long ago defended the fact that two out of three board members of JSE-listed South African retailers are white men, while over three quarters are men for this very reason!

Read: Retailer boards are very male, and mostly pale

Tshabalala was the best person for the job. Full stop.

If the board’s carefully considered view was that he was inexperienced in certain areas (given that his background is retail banking, not investment banking, so this is completely plausible), then why not surround him with experienced colleagues? Lynette Ntuli, CEO of Innate Investment Solutions, summarised it succinctly on Twitter: “[this was] an obvious slight to Sim’s capability since day one”.

Instead we got joint-group chief executives. And a situation where, four-and-a-half years later, Kruger is being demoted (let’s call that out for what it is, too) and will surely not stick around for years to come.

That the structure is being described – in hindsight – as being “testament to the group’s culture and values which include working in teams, respecting each other and upholding the highest levels of integrity” is nothing but trite.

Having two captains of the ship also means a strategy disconnect, despite what those who employ this structure claim. If the two joint CEOs fundamentally disagree on an issue, where does the buck stop? With the CEO who has accountability for the area which is affected (most) by the decision?

One presumes (hopes) that Barclays Africa Group won’t make the same mistake. It has two deputy chief executives: David Hodnett (who looks after South Africa) and Peter Matlare (who looks after its African operations). If this is its succession plan (and it hasn’t clearly stated as much), then one of the two should become CEO when Maria Ramos elects to retire, or resigns. (Shareholders might prefer to have someone with banking experience in charge instead of someone who overpaid for a Nigerian flour mill, but I’m getting ahead of myself).

Standard Bank’s two-CEO structure also meant that shareholders effectively paid twice as much for the role over the past four-odd years (read: Bank CEO pay compared). Standard Bank’s total remuneration for its CEOs in 2016 was R64 million, versus R34 million for FirstRand (Johan Burger), R29 million for Barclays Africa Group (Maria Ramos), R22 million for Nedbank (Mike Brown) and R14 million for Capitec (Gerrie Fourie).

Going forward, Kruger has the luxury of an “executive director” role which is exceptionally vague as far as accountability is concerned (and, quite where he fits into the leadership structure, apart from being an executive director reporting to the CEO, is unclear).

Read: Ben Kruger on his future at Standard Bank

His new role will, according to the group, include “contributing to the governance of the group as a member of the group board” (Duh! [author’s comment]) as well as “contributing to the leadership, management and governance of Africa Regions; guiding the continued digitisation of the group; deepening and broadening the group’s relationship with its strategic partner ICBC; helping with the management of the group’s risks; and maintaining and building key client relationships”. One wonders how handsomely he’ll be remunerated for this… Again, shareholders pay.

I am not a SJW, nor is this some sort of crusade. I’m also not about to wash someone’s feet in some insignificant ceremony so that I can feel better. This is about calling out corporate South Africa for the mistakes that it has made and holding those accountable. Shareholders, especially those very passive active asset managers who hold hundreds of billions (trillions!) of rands in stock in these companies on behalf of retail investors, should be doing the same.

Hilton Tarrant works at immedia. He can still be contacted at



Sort by:
  • Oldest first
  • Newest first
  • Top voted

You must be signed in and an Insider Gold subscriber to comment.


Are you not getting tired of this transformation crap

I could not agree more. Mr Tsabalala at 45 was very young for the role on his own. Clearly the dual role model worked well ( Goldman used this at one point too)and the argument that shareholders paid twice is somewhat incorrect. The number 2, 3 and 4s of the other banks are also very well paid.

Not a good article-SAM is disappointed!!

Strange that he wasn’t too “very young” to run Standard Bank South Africa (an enormous business and the rump of the group) “on his own”…

Dear Hilton,
Running a large division is one role-running the group totally different. You spend a lot more time liaising with the board and shareholders as CEO and this requires a different form of experience to a divisional executive. Also as CEO you have (often) very strong divisional executives reporting to you which again requires a different depth of experience.

Your unsubstantiated and insidious attack on both the board of Standard Bank as well as Ben Kruger is simply incorrect. Most importantly the combination appeared to work( as it does with some global players as well).

What you have achieved, whether intended or not, is to challenge the decision as incorrect,somehow implying that the CEO was seen to be there-but not quite there-because he is black-something that the board no doubt had to debate given the prevailing circumstances in our sad country.

SAM is not happy with you!!

ps. Standard Bank paid two CEOs *AND* that whole list of number 2s, 3s and 4s. This is plain to see in the remuneration of its executive committee.

I up-voted you, but think you meant “I could not agree less”?


Wonder if Ben ever imagined that he would have to report to Sim.

I disagree completely. I have seen joint CEO arrangement work very well so why shouldn’t it be an option in the case of two deserving candidates who complement each other very well. It worked alright in this case didn’t it?

Terrible attempt at an opinion piece.

How is it a bad thing if an inexperienced candidate has someone to assist/guide/mentor?

You show a lack of understanding of senior management and directors remuneration disclosure. There actually isn’t any evidence to suggest that SBK paid 2x the remuneration they would otherwise have incurred.

Lastly, did you use Lynette Ntuli’s quote (CEO of a property management business and apparently no expert on banking, remuneration policy or corporate governance) because she is black?

Try again next time…

End of comments.



Instrument Details  

You do not have any portfolios, please create one here.
You do not have an alert portfolio, please create one here.

Follow us: