African Bank CEO Kennedy Bungane says financial services has yet to transform
African Bank CEO says sector’s culture still hostile to black talent
● The recently appointed CEO of African Bank, Kennedy Bungane, who played a key role in negotiating and drafting the financial services sector charter in 2002, says the culture in the sector remains hostile to black talent.
“It’s tragic there are so few black CEOs in the financial services sector and that so much black talent has left,” he says.
Bungane’s appointment comes hot on the heels of Daniel Mminele’s sudden departure from Absa 15 months after becoming the bank’s first black CEO.
He says that although there has been “a lot of progress in transforming the sector according to the BEE scorecard”, there has been no change in the culture.
“The culture of financial services has been left untouched by the advent of a new nation over the last 27 years and this eats transformation for breakfast. It stifles black talent, it has led to so many of our organisations being unable to nurture, keep and appreciate black executives.
“We need to go beyond scorecards and think about the prevailing, dominant cultures in this industry and how to change them. The culture of these organisations is eating our black interns for breakfast, it is undermining every intent that every board and exco talks about.”
He characterises this culture as “prowhite male and anti-diversity”, saying: “It is a scandal that not even white women leaders in this industry tend to last very long.”
Bungane replaces Basani Maluleke, whose sudden resignation three years after becoming the CEO of African Bank and the first black woman CEO of a commercial bank has yet to be explained.
According to insider reports, she clashed with African Bank chair Thabo Dloti.
“I’m not going into that,” says Bungane. “The merits of that case are not as simple as what has been articulated.”
Maluleke’s exit represents the loss of the third of four black women on the African Bank board, which then comprised five white men, two black men and one black woman.
This has raised concerns about transformation at the bank, which was started in 1975 by a group of black entrepreneurs led by then president of the National African Federated Chamber of Commerce and Industry Sam Motsuenyane to service redlined and economically marginalised townships and help black households and businesspeople access credit.
In 2014, the bank collapsed under a mountain of bad debt and was placed under curatorship by the Reserve Bank, and recapitalised with R10bn from SA’s commercial banks and R5bn from the Reserve Bank.
Bungane, who as president of the Association of Black Securities and Investment Professionals was a leading champion of transformation in the industry, says he shares concerns about its transformation.
Did he discuss them with the chair? “Most definitely. Both the chair and I and the board share concerns about this. That is why there has been such rapid progress in recruiting suitable black talent. As my appointment was announced last week we also announced a dynamic black African female to join the board. So the numbers have changed and are moving in the right direction, and we’ll be making further announcements soon.”
The board now has two black women, three black men and four white men, and “as we speak is one of the most transformed boards of financial services companies”.
Did he ask Dloti about Maluleke’s departure? “Yes, I have spoken to him about that but I’m not going to comment about it.”
He also refuses to comment on Mminele’s departure from Absa, which came after the board failed to support him when his attempts to implement the agreed strategy were resisted by executives who seem to have felt he was encroaching on their turf and signalled to the board that they might leave.
Bungane is confident this won’t happen to him as he delivers on the strategy of fasttracking the transformation of African Bank from a micro lender into a fully fledged, more digitalised financial services platform for retail and business banking clients in higher LSMs.
“There’s a clear sense that this strategy is moving in the right direction. I’ve got the mandate and authority to review it and ensure alignment with the board on the what, how and when of the strategy.”
What made him accept what seems like something of a poisoned chalice after the experiences of Maluleke and Mminele?
Ignoring the bait, he says he was ready to return to his “first love”, which is banking.
Three weeks after matriculating in 1991 the then 17-year-old veteran anti-apartheid activist Bungane, now 46, joined Standard Bank in Vereeniging as a clerk.
He became CEO of Standard Corporate and Investment Bank in 2009 and CEO of Barclays Africa in 2012. A year after it was sold to Absa in 2013 he became CEO of empowerment investment company Pembani Group until 2019.
Is he sure he won’t suffer a similar fate to that of Maluleke, Mminele and indeed Dloti himself, who quit as CEO of Liberty in 2017 after clashing with the board over the insurer’s strategic direction?
Does he have a guarantee that he’ll be left to run the bank as he sees fit?
“I have no doubt that I am aligned with the board on what my mandate is and what my role and responsibilities and extent of my authority is to deliver on that mandate,” he says.
Corporate governance is “very clear” about the roles of boards and executives.
“This is something we have discussed at length and we are aligned as to what their oversight responsibility is in terms of company law and in terms of what our regulators expect non-executive directors of the bank to do and not to do.
“And, of course, I have been around a bit. I’ve served on boards as a nonexecutive and as a CE reporting to boards.”
He says he has “no fear of contradiction” by the board in the performance of his operational role.
It’s too early to tell if he’ll be bringing in his own team, he says.
“I’m busy getting a 360 view of the people around me. I should know pretty soon where there might be gaps, where there might need to be improvement.”
The importance of having executives around him that share his strategic vision “cannot be exaggerated”, he says.
As for the board, “there’s no doubt that the hiring and firing of executives will be my decision. It would not be fair on anybody to hang around when there is not alignment”.
The culture of these organisations is eating our black interns for breakfast Kennedy Bungane
CEO of African Bank