Registered users can save articles to their personal articles list. Login here or sign up here

There’s a CEO crisis in SA and no one is stepping up

List of exiting CEOs may in part explain why business confidence in the country has fallen five months in the last six.

The history of business is filled with executives coming to the fore during adversity. Think Steve Jobs taking back Apple and turning it into a tech powerhouse, or Alan Mulally steering Ford Motor out of the late-2000s car-industry recession.

Then there’s South Africa, where an exodus of chief executive officers during an economic downturn is becoming alarming, particularly as there are apparently so few ready replacements. Since October, at least seven CEOs have departed from some of the country’s most powerful institutions, and none have yet been permanently replaced.

The following list may in part explain why business confidence in the country has fallen five months in the last six.

South African Airways – Vuyani Jarana

The former Vodacom Group executive’s resignation last week came as a surprise, as he had been widely viewed as capable of steering the state airline through to a 2021 break-even target. Jarana cited a lack of financial support from the government, making it impossible for him to be confident of a successful turnaround.

Read: Three things to learn from exit of SAA’s CEO

Eskom – Phakamani Hadebe

became the 10th CEO to quit the stricken state power utility in as many years, citing the “unimaginable demands” of what is arguably South Africa’s toughest corporate job. There are few obvious candidates to replace him at the electricity provider, which is saddled with $30 billion in debt and was responsible for nationwide blackouts earlier this year.

Read: The toughest CEO job in SA is open. Who wants It?

Old Mutual – Peter Moyo

The 174-year-old insurer suspended Moyo two weeks ago over a conflict of interest involving his investment firm NMT Capital, despite knowing about the link when the 56-year-old was appointed. In response, Moyo insisted he’d done nothing wrong and demanded a full pay out. The terms of his suspension and departure are still being worked out.

Read: Peter Moyo questions reasons for Old Mutual suspension

Massmart – Guy Hayward

The Walmart-owned general goods retailer said its CEO will leave before the end of the year amid a torrid trading environment for retailers. The US parent named a Walmart veteran to take over, but Mitchell Slape can only come to South Africa when he has been granted a work permit.

Read: Walmart sends veteran to fix ailing Massmart business

Absa Group – Maria Ramos

South Africa’s third-largest bank said in January that Maria Ramos would retire following a split from former UK parent Barclays Bank. Absa said a replacement should be announced by the August 13 half-year results presentation. South African Reserve Bank Deputy Governor Daniel Mminele is being considered, people familiar with the matter said in February.

Read: Why doesn’t Absa have a successor to Ramos?

Public Investment – Daniel Matjila

Africa’s biggest fund manager and custodian of South African state-worker pension funds accepted Matjila’s resignation in November following criticism of various investments. The PIC is now the subject of an ongoing commission of inquiry, and has only had acting CEOs since. The whole board of directors offered to resign in February.

Read: Dan Matjila resigns with immediate effect

Transnet – Siyabonga Gama

The state-owned ports and rail company dismissed its most recent full-time CEO in October after he became embroiled in corruption allegations surrounding the purchase of new locomotives. The company is now on its second interim leader, and doesn’t expect a permanent head to be appointed for four or five months, infrastructure-development head Gert de Beer said on Wednesday.

Read: Transnet CEO receives pink slip

© 2019 Bloomberg L.P

Get access to Moneyweb's financial intelligence and support quality journalism for only
R63/month or R630/year.
Sign up here, cancel at any time.

COMMENTS   12

To comment, you must be registered and logged in.

LOGIN HERE

Don't have an account?
Sign up for FREE

Only when the pressure is really on do the true abilities, integrity and business acumen of a CEO become apparent. This is in contrast to the good times when his or her political, self promotion and networking skills are more visible.

Highly incompetent non executive board members putting pressure on CEO’s by simply not understanding the business or environment is a big cause of this, other than Equity appointed CEO’s being churned in and out.

Spot on. Look at how many actuaries/insurance professionals are on Old Mutual’s board. Another problem is the lack of independence of the non exec directors.

Of the 16 board members, I think only 2 know enough about insurance accounting and provisions to hold management/finance/divisions to account. Trevor Manuel (chairperson) is certainly not one of the two. At least all the others bring diversity to the board!

Poorly written as most examples refer to SOE’s where all those CEO’s have their hands tied with political inertia and agendas.

I am also not sure the Absa reference is a good one as a loss of a good CEO. Good riddance some might say seeing where the group was a decade ago, bearing in mind the industry has changed.

Commentator 1 summarises it well in one word – transformation.

Not sure that is solely to blame.

Fact is, we continue to have a brain and experience exodus and those coming through the ranks with the education system of the last decade and the tertiary education having to TV-dinner strong leaders with a strong academic underbuild, just are not tough enough and might be willing and starry-eyed but not streetsmart enough.

The other challenge with the talent pool is that its really a puddle. So instead of building strong internal talent pools we try and headhunt off the shelf from others, instead of using those internally with corporate experience from the spesific company.

Someone who has seen the good and bad at all levels.

Another challenge we face is the reducing retirement age.

At 50 you are sort-of tolerated, at 60 they start skipping you on increases and then they exit you.

I am all for a silicone valley 20-something CEO who built his own business on the up and became a billionaire post the IPO. But true corporates like SOE’s, national utilities, banks, retailers, etc., require battle axes and ball breakers who has seen the group through cycles, restructurings, the good and the bad.

The author writes this article as if Ramos was competent.I think she is useless.
The press is full of negative service from this bank, she was definitely a political appointee to gleen business from the government.
On a personal note the majority of phishing i receive on my cell comes from Absa- definitely a ”vrot kol” working there.

Difficult to perform if the system is broken and stakeholders / interferers are pulling in different directions.

Condolences to Mitchell Slape.

He has zero chance of success. The South African market and economy is a difference universe from those of the US.

It seems to me that if a person is not black or a female then they are not CEO material? Perhaps they should cast the net wider. It is also possible that no decent CEO or a talented person within these companies would want these jobs. They are set up to fail.

Having worked at large financial services companies for the better part of 25 years I can tell you that in the 90’s there was a solid layer of middle-management that kept things on track . Today you have people, still wet behind the ears will little or no business acumen in these same positions, trying to do the same job but having no sense of how weak they are compared to those just 20 years ago.

Load All 12 Comments
End of comments.

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR
Insider GOLD
ONLY R63pm

Moneyweb's premium subscription is a membership service which will give you access to a number of tools to take charge of your investments.
Or choose a yearly subscription at R630pa - SAVE R126

Get instant access to all our tools and content. Monthly subscription can be suspended at any time.

Podcasts

SHOP NEWSLETTERS TRENDING CPD HUB

Follow us:

Search Articles:Advanced Search
Click a Company:
server: 172.17.0.2