Joint CEO model sends wrong message
In January 2016, Sim Tshabalala faced perhaps his biggest PR crisis as the joint CEO of Standard Bank. The bank’s economist, Chris Hart, engaged in a series of regrettable tweets, including an observation that apartheid victims were becoming “more entitled and more hateful towards minorities”.
I then wrote an open letter to Tshabalala, expressing my horror at the tweets. I specifically highlighted that for a bank with a black CEO there was something fundamentally broken that needed to be confronted if senior employees such as Hart had such a twisted understanding of SA’s social dynamics. And the responsibility for tackling such a problem lay with just one of the two CEOs — Tshabalala. Within an hour, he called me for a discussion about transformation.
At that stage, Tshabalala held a role as joint CEO alongside Ben Kruger. Joint CEOs are not common in corporate SA, largely due to the cost of CEO salaries and the issue of possible conflicts.
When Tshabalala accepted the role, a common feeling was that Kruger was there to babysit him. Some, including the Black Management Forum, referred to it as a setback for transformation. And they were right.
For black CEOs in particular, the pressure to succeed is elevated by the realisation that so many others within and beyond their organisations tend to look up to them for leadership.
In the case of joint CEOs, there is the difficult question of what such a leadership structure communicates.
To some observers, it indicates that the black half of the partnership is only there to score BEE points, with limited responsibility. Others see it as a validation that black leaders are not yet fit to be left to their own devices.
Tshabalala’s role only reinforced the negative perceptions around the capability of black leaders.
Organisations have different ways of grooming leadership and succession planning. Most get it wrong.
Standard Bank was a case in point. Even though they would never admit it, their succession planning had left them in the position where they formed the view that Tshabalala was not ready to take on the leadership role on his own. The question of how their internal succession planning mechanisms had failed was, therefore, the more important question than why Tshabalala had agreed to be joint CEO. The shadow leadership structure only undermined Tshabalala’s standing and elevated Kruger’s. More damagingly, it communicated the wrong message to emerging black talent within the bank.
Tshabalala was recently confirmed as the sole CEO of the group. He takes over at a time when transformation issues are again topical. His elevation is a step forward for the bank.
Standard’s commitment to sustained rather than artificial transformation is what is needed.
From a distance, one can see the grooming of the formidable Funeka Montjane, head of personal banking, as a promising indicator of where the bank is headed. She and others within the bank have just inherited the responsibility to lead after Tshabalala. Core to this responsibility is the need to acknowledge that the joint CEO period came at a cost to the bank’s transformation commitment credentials, something the new leadership collective needs to restore.
Failure to do this will represent an opportunity loss and inflict permanent damage on Tshabalala’s legacy.