Why did these bosses suddenly leave?

Is there such a thing as shareholder democracy? Can democracy exist where there is no transparency? Whose interests do boards of directors represent? A surprising thing happened recently. Two companies, both stalwarts of the JSE, committed just about the worst sin. Out of the blue, construction company Group Five said on Monday that CEO Themba Mosai had resigned. With immediate effect – despite the three months’ notice that Group Five requires to vacate this position. No reasons were offered for this big development. Last week, Absa announced the departure of its CEO, Maria Ramos, at the end of February. That was a calendar month’s notice.

Unlike Group Five, at least Absa had the decency to cook up an explanation for the departure of the long-serving Ramos. “She has chosen to retire when she turns 60 in February and is eligible to do so,” it said.

“She had indicated a desire to step down earlier, but agreed to see the group through the separation negotiations with Barclays Plc, the ensuing sell-down and key separation milestones, including Plc achieving regulatory deconsolidation and refreshing Absa’s brand identity. With the separation on track and our new strategy … in place, Maria feels this is the right time to retire.” Fair enough.

Her departure had been expected for some time. But surely the retirement age did not just creep up on Ramos and the board? Absa’s own policy is that executives will give a notice period of six months, whether for retirement or resignation. And Ramos was meant to stay until 2020. Since 2017 she has accepted incentive shares of more than R44m to see through the Barclays separation. What is really going on? Why did these executives suddenly leave?

Let’s start with Group Five. Mosai’s goose was cooked the moment he accepted the appointment by the previous board, chaired by Philisiwe Buthelezi, two years ago. This was a poisoned chalice, as the asset managers that own most of the company had already lost confidence in Buthelezi’s board and management team. Disastrous execution in Ghana and elsewhere, together with the drying up of infrastructure investment in SA, has all but destroyed Group Five. At only R84m market capitalisation, the company has lost 98% of its value over the past five years.

In the 10 years Ramos has been CEO, Absa has been the laggard in its sector. A R100 investment in the stock in March 2009 would be worth less than R180 today. A similar amount invested in FirstRand at the same time would have multiplied to R512.

In the domestic market, Absa has lost market share in all the important metrics. As my colleague Rob Rose wrote last week, former controlling shareholder Barclays has to accept a lot of the blame for reining in Ramos’s team from writing more business.

Now that Barclays is a minority investor, are there some influential shareholders throwing their weight around?

Spokesperson Songezo Zibi says Absa could not notify the market earlier of Ramos’s departure. In a nutshell: Ramos had wanted to leave in 2016 but had to ensure a smooth separation from Barclays. Only in December did Absa find someone, former banks registrar René van Wyk, who could take over in the interim.

In both cases, who pulled the trigger?