Banks stir transformation debate
Lobby groups and ex-banker discuss black leadership of sector
RECENT leadership changes in the financial services sector suggest the industry is suffering from a case of “one step forward, two steps back” when it comes to transformation.
The issue has the Black Management Forum (BMF) and the Association for the Advancement of Black Accountants of Southern Africa (Abasa) seething because, the lobby groups say, financial institutions are missing opportunities to appoint skilled black executives to top positions.
Sanlam announced last year that Johan van Zyl, when he retired as CEO, would be replaced by Ian Kirk.
Recently, African Bank appointed Brian Riley as CEO of the ailing microlender.
Old Mutual chose Stephen Hemphill to replace Julian Roberts as CEO rather than promoting Ralph Mupita, the CEO of Old Mutual Emerging Markets. The group gave Dave Macready the top post at Old Mutual South Africa, replacing Marshall Rapiya, who is now deputy chairman at Old Mutual Life Assurance Company SA.
FirstRand announced earlier that Johan Burger, the group’s financial director and deputy CEO, would replace Sizwe Nxasana when he stepped down as CEO. And when FNB CEO Michael Jordaan left the group’s retail bank, FirstRand appointed Jacques Celliers in his stead.
But Paul Harris, FirstRand’s co-founder and former CEO, who does not believe the rate of transformation has declined, says the company believes in meritocracy.
In an interview with Business Times, Harris said it was “nonsense” that strong people should not get the job because of the colour of their skin.
“Either you believe in meritocracy or you do not. It’s straightforward,” he said.
Despite the criticisms, the retired banker believes FirstRand’s management of succession plans has been “very smooth” over the past 20 years.
Harris said the company did want to appoint black executives. “You would have to be an idiot if you didn’t want to, but the one thing that we are not going to do is deviate from a meritocracy.”
Abasa president Tantaswa Fubu noted that “transformation at its core assumes merit, otherwise it is tokenism”. However, she said, there had been some backsliding in transformation as companies no longer regarded it as a priority.
Not enough pressure was being applied on companies by associations such as Abasa, she said, and urged companies to ensure they had well-organised talent pools.
Bonang Mohale, the president of the BMF, shared similar sentiments, saying the notion that there were not enough skilled black executives was “disingenuous”. If experience was the only prerequisite to lead, then Nelson Mandela would not have been the country’s president, he argued.
According to Mohale, in the past 48 months the number of black people in business leadership positions fell from 14% to below 13%. Mohale, who is also the chairman of Shell South Africa, said companies were not committed to transformation.
On the issue of a deteriorating relationship between business and government, Harris said he believed the corporate sector had been bullied into submission, and business was scared to express its views on issues that affected the country because of the sensitivity of politicians.
Over the years, corporate ac- tivism had deteriorated because companies were scared of being seen to “play politics”, he said, with people unable to distinguish between debate and taking a political stand. “Even when you make a sensible comment, it is seen as playing politics.”
In recent years, FirstRand and its retail bank, FNB, have been criticised by the government and the ANC.
In 2007, Harris was criticised by the Thabo Mbeki-led government for FirstRand’s campaign against violent crime.
Remembering the period, Harris said the last thing he had wanted was to make political statements. He described the plea as a “sensible” statement, but the ruling party viewed it as a direct attack on the president.
Harris said he would now approach the issue differently.
In 2013, the ANC pressured FNB into dropping its campaign giving citizens a platform to voice their concerns and hopes for South Africa.
Harris said South Africa was in a situation where the government thought business was a problem. This was because the government and the business sector had “trust issues”.
He said under Mbeki’s presidency the relationship between government and business had fallen to below 10 on a scale from one to 100, and had declined even further under President Jacob Zuma.
He maintained that most of the problems the government wrestled with — such as quality education, job creation and infrastructure — required privatesector action to be resolved; the government needed only to provide an environment in which to operate.
Harris does not believe more talk is needed to resolve the issues. “I am tired of it. Whether we like it or not, we have to have a better relationship,” he said.
Harris is not the only business leader to express his frustration with political leaders. Johann Rupert, the chairman of Richemont and Remgro, has slammed the government for failing to curb corruption and prevent power shortages.
Reuel Khoza, Nedbank’s former chairman, recently called on South African executives to weigh in on debates. Khoza said: “This hour in South African history calls for active, conscientious nonconformists.”
Transformation at its core assumes merit, otherwise it is tokenism