Time for Woolies value destroyers to move on?

The feeling among many analysts is that Woolworths CEO Ian Moir may hold on to his job for a while yet, even if he doesn’t turn around floundering Australian department store David Jones. Remarkably, this is because the Woolworths board doesn’t know who to replace him with, say analysts.

If this really is the case, then you have to wonder what Tom Boardman, Zarina Bass, Gail Kelly, Stuart Rose (who retired earlier this year) and Simon Susman have been doing with their time on the group’s nominations committee. One of the key focus areas of the committee is “succession planning for directors and executive committee members”.

Succession planning is a critical part of any board’s job, but few seem to get it right. Recently, executive headhunters have spread their nets across the globe in search of talent, with mixed results. Moir comes from Scotland via Australia.

Edcon’s headhunters turned to another Australian, Bernie Brookes, in the desperate hope he would be able to pull off the impossible and get Edcon back on its feet. Sadly, it wasn’t to be. Moir’s Australian background is a big part of why South African investors are now billions of rand poorer than they were in 2014, when he persuaded the board to buy David Jones.

Not only has Woolworths taken a massive hit on that purchase, but chances are it won’t ever come close to realising the initial grand objectives.

In 2014, during the Zumainduced depression, it seemed easy to persuade South Africans to overpay for any sort of business as long as it wasn’t located in SA. The board should have known better. Perhaps it’s time for more than Moir to move on.

Tencent’s WeChat has become so ingrained in Chinese society that it is difficult to imagine a scenario in which the social media app loses relevance. WeChat is WhatsApp on steroids. Beyond messaging, the platform that has 1-billion active monthly users facilitates payments, delivers news and content and acts as an e-commerce platform.

Data show 83% of all smartphone users in China use WeChat. But, as per a report from Hong Kong’s South China Morning Post at the weekend, more and more Chinese nationals — especially those who have lived abroad — are becoming disillusioned with the app. They are concerned that the Chinese government can demand user data from Tencent for surveillance purposes. In 2017, a man was jailed for privately commenting on the Islamic State militant group over WeChat.

Of course, WeChat has probably become too large and too entrenched in Chinese society to fail. Facebook, for instance, has more than 2-billion users and has faced similar discontent following its recent data breach.

Many have threatened to abandon the US-based social media site, but most are unlikely to do so as their friends and family won’t do the same.

However, to ensure they are sustainable over the long term, the likes of Facebook and WeChat need to make sure they listen to these relatively small groups of unsatisfied users.

Via its 31% stake in Tencent, Naspers has much to lose if WeChat starts losing ground. So too does the JSE, given Naspers’s heavyweight status.