Investec’s joint CEO a cop-out
ABSURD: STANDARD BANK AND SASOL’S APPOINTMENTS
Like Standard Bank and Sasol’s appointments
Investec’s decision to appoint joint group CEOs – chair Fani Titi and Investec Asset Management CEO Hendrik du Toit – from April 1 is a wholesale compromise dressed up as a “win-win”. The group already has a strong decentralised structure, with global heads of each of its three franchises and its two primary geographies (UK and SA). While this structure has in many ways evolved in recent years, the group has been built in outgoing-CEO Stephen Koseff’s image.
In his (and MD Bernard Kantor’s) place, come two leaders cut from a different cloth whom Koseff says have “complementary skills”, with no indication of what those are, nor how they’ll delineate their roles. At least Standard Bank, announcing its unusual joint-CEO appointment of Sim Tshabalala and Ben Kruger in 2013, articulated how they would divvy up responsibilities across divisional, functional and geographic lines. Investec is silent on that score.
It’s also unusual – especially in banking – for a non-executive chair to suddenly shift to an executive role and practically unheard of for them to move to the CEO role.
Also, while both Titi and Du Toit are entrepreneurs, and highly competent leaders of complex businesses, neither has run a bank. Titi has only held two significant executive roles in his life (neither in banking), and Du Toit has “only” built a large asset manager.
Additionally, they’re both in their mid-fifties, suggesting neither have more than a decade at the group’s helm … Quite a cultural change from what’s been in place for the past four decades.
The Asset Management business will see two of its top five depart to group positions (along with Du Toit, COO Kim Mcfarland becomes Investec Group finance director). Co-CIO Domenico “Mimi” Ferrini and global head of Client Group John Green take over from Du Toit as joint CEOs of Investec Asset Management.
Some pointed to the share price reaction (3% jump) on the day of the announcement last week as evidence that the board’s choices were “correct”. I’d argue that this was more related to the certainty the announcement provided that there was continuity in their choices (it didn’t appoint from outside) and that Investec didn’t lose Du Toit.
Others argue these appointments “mirror” the original structure of Koseff-Kantor, except had this been the case, there would’ve been like-for-like replacements (i.e. one appointment to CEO and another to MD).
Never mind that in this entire executive shakeup, the group couldn’t promote one black executive (Titi’s transition aside). At least it found one woman.
Standard Bank’s Tshabalala/Kruger double act didn’t work, despite the bank protesting upon Tshabalala’s permanent appointment as group CEO last year that “the board is satisfied that the structure … necessary in 2013, has met and in many respects exceeded expectations”.
Sasol’s 2016 decision to appoint Bongani Nqwababa and Steve Cornell as joint CEOs was equally preposterous and won’t last.
A chief risk in succession planning is that those who don’t get the top job will leave. All a joint CEO compromise does is delay the inevitable.
Hilton Tarrant works at immedia.