Wait and see for Alexan­der Forbes

Business Day - - FRONT PAGE - Londiwe Buthelezi Busi­ness & Fi­nan­cial Writer [email protected]­nesslive.co.za

The ex­o­dus of Alexan­der Forbes ex­ec­u­tive man­agers in the past few months is un­set­tling but the mar­ket is un­likely to judge the com­pany harshly, ac­cord­ing to an­a­lysts.

The ex­o­dus of Alexan­der Forbes ex­ec­u­tive man­age­ment in the past few months is un­set­tling but the mar­ket is un­likely to judge the com­pany harshly, ac­cord­ing to an­a­lysts.

In­stead, per­for­mance of the pen­sion fund ad­min­is­tra­tor’s stocks will be more de­pen­dent on how well new CEO Dawie de Villiers is able to im­ple­ment his turn­around strat­egy.

“The cur­rent sit­u­a­tion is un­set­tling for the busi­ness, and it will re­quire hard work and a con­sis­tent mes­sage to sta­bilise the or­gan­i­sa­tion that is highly re­liant on its peo­ple,” said Karl Gev­ers, head of re­search at Benguela Global Man­agers.

The coun­try’s largest pen­sion fund ad­min­is­tra­tor has lost sev­eral mem­bers of its ex­ec­u­tive team, start­ing with CEO An­drew Dar­foor, who was fired by the board in Septem­ber 2018, and fol­lowed by the res­ig­na­tion of CFO Naidene Ford-Hoon.

The lat­est blow came two weeks ago when Leon Greyling, CEO of Alexan­der Forbes In­vest­ments, group chief risk of­fi­cer Vishnu Naicker and Chris­tian Schaub, who served as the chief hu­man re­sources of­fi­cer, quit. The com­pany did not an­nounce their res­ig­na­tions at the time and says de­tails re­main con­fi­den­tial.

“Trans­parency is es­sen­tial for in­vestors and cor­po­rates to build trust and con­fi­dence in man­age­ment’s abil­ity to gov­ern and ex­e­cute strate­gic pri­or­i­ties.

“Un­for­tu­nately, the Alexan­der Forbes board has been in­ef­fec­tive at manag­ing per­cep­tions and in­vestors will re­main scep­ti­cal of board de­ci­sions for months to come,” said War­wick Bam, head of re­search at Av­ior Cap­i­tal Mar­kets.

The an­a­lysts said the de­par­tures of ex­ec­u­tives, es­pe­cially those ap­pointed dur­ing Dar­foor’s term, were not sur­pris­ing given the change of the CEO.

“There would also be an el­e­ment of the new CEO want­ing to build a team that he feels com­fort­able with and trusts,” said Gev­ers.

Bam said Dar­foor was in­flu­en­tial in the ap­point­ment of for­eign na­tion­als in key ex­ec­u­tive po­si­tions. “We ex­pected for­eign ex­ec­u­tives such as Chris­tian Schaub, John Mather and Tony Powis to re­sign along­side Mr Dar­foor. Nat­u­rally, the in­creased uncer­tainty around strate­gic in­tent and com­pany cul­ture has ex­ac­er­bated the ex­ec­u­tive turnover,” he said.

Gev­ers said the mar­ket will prob­a­bly take its time in judg­ing the new man­age­ment team, as Alexan­der Forbes has a lot of po­ten­tial if man­aged well.

NEW STRAT­EGY

De Villiers, who joined Alexan­der Forbes from San­lam, has promised to de­liver a turn­around strat­egy by the end of the group’s fi­nan­cial year in March, but said he would not be fun­da­men­tally chang­ing much. In­stead, the new strat­egy is ex­pected to have high-level tweaks for most busi­nesses and more fo­cus on IT.

Bam said the sil­ver lin­ing for in­vestors is that Alexan­der Forbes re­mains a stable and trust­wor­thy fi­nan­cial in­sti­tu­tion with no op­er­a­tional is­sues.

“Gover­nance con­cerns re­late to strate­gic di­rec­tion and im­ple­men­ta­tion, which can be re­solved with a new and stable man­age­ment team that is now one step closer to be­ing ap­pointed,” Bam said.

THERE WOULD ALSO BE AN EL­E­MENT OF THE NEW CEO WANT­ING TO BUILD A TEAM THAT HE FEELS COM­FORT­ABLE WITH AND TRUSTS

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