The board that lacks balance

FOR investors, an ideal board of directors would consist of a balance between skilled people, people with industry experience and others with detailed knowledge of the company.

But the board of PPC, the beleaguered cement company wedged in the middle of one of the nastiest public spats in recent years, is not balanced.

Its 11 directors all appear to have impressive lists of skills and qualifications — but not enough of them have either industry experience or detailed knowledge of the company.

There are other holes: Joe Shibambo is inappropriately described as an independent nonexecutive director, as he has been on the board for nine years.

Tryphosa Ramano, PPC’s finance director, is at the centre of the dispute. Former CEO Ketso Gordhan wanted to “exit” her from the company, but the board stopped him doing this, which is why he quit.

But it is difficult to understand how Ramano has the time and energy to sit as a nonexecutive director on two other boards — at Airports Company SA and the Land Bank. In addition, Ramano is a member of Real Africa’s audit committee, president of the Association of Black Securities and Investment Professionals and the president of African Women Chartered Accountants.

Reasons for PPC’s board being so unbalanced go back to its origins in Barloworld, which unbundled PPC seven years ago.

Many of the long-serving directors appointed under Barloworld’s reign resigned. This meant the board lost a significant contribution from individuals who had ensured, if not vigour and energy, at least continuity and industry knowledge.

Shareholders had seven AGMs to demand better balance — but opted to do nothing.

Instead, at every AGM, shareholders either re-elected directors who resigned by rotation, or simply elected the new directors who were presented to them. There is no record of any shareholders raising concerns.

Shareholders include the Government Employees Pension Fund, Lazard Asset Managers and Coronation Fund Managers.

This passive strategy seemed to work well — until it didn’t. Now the imbalance looks troubling, though it is unclear to what extent this contributed to the company’s current crisis.

The December special meeting will be a watershed, either way.