FirstRand’s upright goalie leaves the field
Last of the founding triumvirate to depart
At an event a decade ago, Gwede Mantashe, who had recently been appointed ANC secretary-general, announced that he believed the banks and mines should be at least 50% government-owned.
A hand went up in the auditorium. “Running a bank is hard,” said the speaker. “When things go wrong you have to fund them. And finding ways to compete is hard work. If you’re the government, why don’t you just tax them instead? You’d get all of the upside but none of the headaches.”
I don’t remember Mantashe’s answer, but the question stayed in my memory. It was asked by Laurie Dippenaar, and in its simplicity it betrayed a deep understanding of the relationship of the private and public sectors. It was classic Dippenaar, analysing complex problems by asking simple questions.
Last week he announced his retirement as chairman of FirstRand. When he steps down in March next year it will be the first time in the group’s history that neither the CEO nor chairman’s office will be occupied by one of its three founders.
He will join GT Ferreira and Paul Harris in retirement, although Harris maintains a nonexecutive board position. The three of them formed Rand Consolidated Investing in 1977, establishing FirstRand from that and other entities in 1998.
Dippenaar is renowned for his meticulous preparation for board meetings. He takes his simple questioning to the boardroom, cutting through the often arcane jargon of high finance, getting executives to explain their business plans in the most basic terms.
“He hates bullshit,” says one of his longserving colleagues. “He always makes people simplify things. He makes them go through that intellectual process. It can be humbling but it’s very valuable.”
He also loves analogy, a way of finding meaning in what can be obscure.
Three years ago he asked my firm to research black empowerment deals. He’d become frustrated with what he saw as a lack of information in the debates around BEE. He said he’d fund it personally but wanted no say in the research methodology, which he insisted be independent.
When we produced results, having calculated the value BEE deals had created, he was not satisfied. “Are those big or small?” he asked. “What could you buy for that amount?” He grasped one of the findings in our report. “That’s the value of farmland in South Africa. With that money you could buy all of the farmland.” And so our numbers were brought down to earth, to something that meant something to ordinary people.
System integrity
Dippenaar carries a trait that is highly desirable in a leader of a banking group: an understanding of the balance between entrepreneurship and risk-taking on the one hand, and the social obligations that banks have on the other. Banks are fundamental institutions in the economy with deep responsibilities to maintain the integrity of the system. It has struck me how South Africa’s banking leaders grasp this, yet their international counterparts clearly did not when the global financial crisis struck.
When it came to rescuing African Bank in 2015, FirstRand played a critical role in rounding up the rest of the banking sector to form part of the consortium to recapitalise the failed bank. FirstRand was there, too, when Saambou hit the wall, crafting a deal with the government to bail out depositors. Dippenaar’s understanding of the responsibility all banks have to maintain the integrity of the system has shone through.
Entrepreneurship
In FirstRand’s triumvirate of founders, Ferreira was the deep-thinking strategist, Harris the opportunist and Dippenaar the goalkeeper, ensuring FirstRand held the line on its corporate governance and social responsibilities. He was also the longest serving, as the initial CEO of FirstRand until 2005, handing over to Harris, then returning in 2008 as chairman.
Despite his pervasive influence on the group, he’s not interfered with the CEOs who followed him, including Harris, Sizwe Nxasana and current incumbent Johan Burger.
Dippenaar has a profound belief in the value of entrepreneurship as a force for good in society. He drove an entrepreneurial culture in the bank, giving leaders autonomy and resources, but then holding them responsible for performance.
He backed new ideas like OUTsurance and Discovery, the latter after Adrian Gore couldn’t get his then-employer Liberty to support it in the early 1990s.
Education
The plan for his successor matched the route Dippenaar followed. Nxasana was meant to take on the chairmanship after a few years cooling off from the CEO’s office, where he’d also displayed magisterial insight into the intersection of banks and broader society. But Nxasana has been drawn deeply into tackling South Africa’s education crisis, chairing the National Student Financial Aid Scheme, the National Education Collaboration Trust and various other education ventures marrying entrepreneurship and social responsibility. That has absorbed him, so long-standing board member Roger Jardine will take on the role instead, stepping down as CEO of Primedia to focus full time on the role.
Dippenaar remains a major shareholder in FirstRand via Rand Merchant Bank Holdings, of which he is still a director. From there, his influence may occasionally still be felt. He will no doubt remain active; his passion for education may even lead him back to working alongside Nxasana.
He hates bullshit. He makes people simplify things Dippenaar colleague
Theobald, a former editor of Investors Monthly, is chairman of Intellidex.