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Foschini boardroom a tad yesteryear …

For a fashion group, its approach to governance seems remarkably off-trend.
Adding to concerns about a possible clubby atmosphere in the boardroom is the fact that three TFG directors were previously partners in the same audit firm. Image: Supplied

For a company that seems to thrive in the world of fashion, its approach to governance seems remarkably old-fashioned – the boardroom profile of The Foschini Group (TFG) is more like something out of the 1980s than the 21st Century.

Even the name TFG is tediously fashionable: a nod to the forced trendy casualness of the internet world.

Fellow reasonably successful clothing retailer Truworths is also struggling to shake off its dependence on oldish white males. Its very long-serving CEO Michael Marks recently announced he would be holding on to his job for another two years – making it 32 in total.

No doubt TFG is coping well with the challenges of the 21st Century, not least of which is the current pandemic. It also did well to avoid the costly overseas misadventures suffered by many other SA retailers.


It might have remarkably mistimed and mispriced the largest rights issue it’s had in years, but that hasn’t been too disastrous in the greater scheme of things. As a result, the group’s balance sheet is stronger; it has funds to see it through more lockdown challenges, and it’s better placed to fund necessary investment into developing its e-commerce. Investors are evidently encouraged by its handling of the current crisis.

Just two months after it issued 94 million more shares at R41.90 a share, the share price is now trading at R91.

And kudos to the group for its commitment to local sourcing, with SA-manufactured units up 31.5% to 11.7 million units as well as increasing the number of Africa-based employees.

So it’s a shame that it can’t drag its boardroom into the 21st Century.

Read: TFG concludes agreement to buy Jet stores

In its proxy voting note ahead of Wednesday’s AGM, non-government organisation Active Shareholder points out that not only has the board been dominated by white males for decades but that during financial 2020 the two additions to the board were both white and male.

Talk vs action

“Although the social and ethics committee report talks of transformation, it makes no mention of the fact that the board is not transformed and that the only new appointments were older white men,” says Active Shareholder. “These appointments may have been justified, but the social and ethics committee should have engaged with the issue.”

Former high-profile banker Colin Coleman and former CEO Doug Murray were the two new appointments.

Read: Colin Coleman joins TFG board

Active Shareholder, which advises labour and community-based investors on voting at shareholder meetings, isn’t overly concerned about the two new appointments. Where it sees things getting totally out of hand is the board’s remarkably loose definition of ‘independent’. On TFG’s own interpretation, the only director who is described as not independent is the former CEO.

Tagged as ‘independent’ in the group’s latest integrated annual report are Michael Lewis, Graham Davin, Sam Abrahams, Fatima Abrahams, David Friedland, Eddy Oblowitz, Nomahlubi Simamane and Ronnie Stein.

Assessing director independence

The King IV code says the independence of a member who has served for longer than nine years should be assessed each year in order to ensure they are still independent. That assessment appears to involve nothing more than asking the director if they have applied their mind honestly on all matters presented to the board and have made decisions in the best interests of the company.

Only such a pointlessly lax assessment could regard Lewis as independent. He was appointed to the board, which his father previously controlled, back in 1989. Sam Abrahams has been on the board for 22 years and Fatima Abrahams for 17. Simamane has been a TFG director for 11 years and Oblowitz for 10.

For some reason the 2020 integrated annual report describes Stein as being appointed to the board in 2015 and therefore as being independent. However Active Shareholder points out that the group’s 2014 annual report states that Stein was appointed to the board in 1999. This means Coleman, Friedland and Tumi Makgabo-Fiskerstrand are the only directors of unquestionable independence.

As Active Shareholder points out: “The assurance by the board that the others are still considered by the board to be independent is not of great comfort.”

Active Shareholder’s opposition may not achieve much given that as far back as 2015, the Public Investment Corporation (PIC), then with a 16.5% stake in the company, voted against the re-election of Sam Abrahams because of his lack of independence. But at least investors can’t say they weren’t warned.

More question marks

Adding to the proxy advisor’s concerns about a possible clubby atmosphere in the boardroom, Active Shareholder points out that three of the directors – Sam Abrahams, Friedland and Obolowitz – were all previously partners in the same audit firm.

The predominance of long-serving board members also raises issues with regards to continuity. “There have been insufficient new appointees to the board for some years and this will create a longer-term problem with continuity,” warns Active Shareholder.

The lack of independence also crops up as a problem on the remuneration committee, at whose meetings the CEO attends seemingly by standing invitation. “Recommended practice is that executives should only be invited as and when required,” says Active Shareholder, pointing out that nearly 50% of shareholders voted against the remuneration policy at last year’s AGM.

In its Proxy Insights, financial services provider Peresec raises a similar concern. “Although we recognise that circumstances exist whereby executives can add rigour to Remco [remuneration committee] discussions, we prefer that this is managed through periodic rather than standing invitations.”

It also recommends voting against TFG’s remuneration policy.

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1. Who funds Active Shareholder. It’s an NPO and their website doesn’t mention who keeps their lights on. That’s of interest to me.

2. This issue of hiring predominantly white males in boards and executive management is not sustainable. It’s a worldwide issue. There’s nothing impressive about having a predominantly white male board whether they are competent or not.The world is changing. Say what you will, not sustainable anywhere.

Zinger’s comment is reverse racism to the extreme. The Board is obviously competent that is why it is still there. Are you professing that older white males should not be employed at all even though they are competent? I say again reverse racism. Look at what BEE has done to this country. May the best man win in the employment race.

Henriques. Diversity is a global issue and all listed companies, if you refer to the west as an example are explicitly changing their employment strategies. TFG is a listed entity not some PTY LTD so expectations are that it will have to meet society’s expectations. Diversity is not limited to BEE it’s broader and bigger than BEE. It means there must be space too for white women.

Moneyweb has been hinting to you guys for a while that the status quo is changing worldwide. It doesn’t matter whether the TFG team or any other team is competent or delivering, it must change with the times.Diversity Papa!

Let’s just say BEE has gone global and bigger. Adapt or get out. Even Trump and Republicans are advocating for diversity.

While clearly a club(Mr. Davin is also from the same audit firm-and a London pal of our recently invigorated Chairman Michael) it would be incorrect to interfere with a system that delivers-Compare TFG to Edgars or Woolworths and as a shareholder I prefer the club any day.

The art collecting, socialist architect and former GS South Africa liaison official to the ANC is a strange appointment though.

As for Mr Stein-a very capable ex CFO-yes he was appointed as FD in 1999 and then became a non executive in 2014 or 2015…not much too it -as with the ex CEO who is also very capable. Compared to competitors I prefer this board any day.

Having an all white male board or a all black female board ops actually completely irrelevant.

I want an all competent board , that’s it. Black or white is not relevant.

If there is an argument that a diverse board would provide an overall more competent execution of duties, then that’s fine, but that isn’t always the case.

This article doesn’t add up to me. Effort was taken to cast criticism on a company which is in the same article argued to be doing relatively well. So why do you want to change it? And there is no mention if probably the biggest thing they are involved with at the moment??? Rescuing jobs at JET!

*of not if

Further: Transformation for the sake of transformation has resulted in an incapable public section… we shouldn’t force it onto private sector… it will evolve as necessary

Change something that’s not broken. In SA? Really? Aren’t there enough entities that needs fixing? Count your blessings comes to mind.

When you have executives or board members that were formerly your auditors you are telling us that there’s something wrong with you. 9/10 there’s definitely something wrong.

TFG is one of my favourite stories to tell.

About 6 years ago, I went for an interview at their head office in Parow. I was led to the meeting room where I would be doing the interview and waited for a few minutes. A young Muslim lady came in and immediately following the greetings formalities said “I thought you were non-white” (There had been nothing about that in the job ad)

The interview was short and I was more interested in the colour of the paint on the walls.

Not my kind of company.

It looks from the statistics provided by Anne, as if the OWM’s are doing a pretty good job?

Me thinks Ann has a chip about white males 😉

End of comments.





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