Under-fire Comair shakes up board
EIGHT OUT: INCOMING CHAIR ADMITS ‘MASSIVE’ MASSACRE WAS NECESSARY
Shareholder also questions joint CEO structure.
Listed airline group Comair has commenced a massive shake-up of its board, with no fewer than eight of its members resigning in the past year.
At its AGM in October, the board – including both retiring chair Pieter van Hoven and incoming chair Lindsay Ralphs – faced some uncomfortable questions about its governance and independence.
The questions were largely prompted by shareholder Danny Tuckwood. Tuckwood is a director of Metaco, a leadership consultancy firm acquired by Comair in July 2018, and unexpectedly disposed of less than a year later in what the firm contends were “questionable circumstances”.
Tuckwood questioned the independence of four independent non-executive directors in particular: Martin Moritz, Rodney Sacks, Van Hoven and Dr Peter Welgemoed. Respectively, they had until last year served 40, 39, 46 and 25 years on the board.
According to Tuckwood, Ralphs expressed “a ‘very severe concern about the lack of independence’ and again recommended that the Board Charter be changed, a request which he says was previously ignored by the board. He said there was a ‘major conflict between us [Bidvest] as a shareholder and the board’ and promised a voluntary annual review of board members. The lack of independence made Bidvest ‘uncomfortable’”.
Ralphs admitted that a “massive shakeup” of the board was necessary.
Swift action since AGM
Van Hoven, who had intended to remain as a director following his stepping down as chair, resigned on December 3.
Sacks resigned on December 31. Moritz resigned on January 2.
Of the four, only Welgemoed remains. Derek Borer, company secretary and alternate to Captain Martin Louw and Sacks, resigned from the alternate positions in the last month. Given that the lack of an arms-length relationship with the board (as required by the King Code) was questioned at the AGM, it is likely Borer will soon step off the board completely.
Earlier in the year, non-executive directors Sean Doyle (who works at British Airways, which holds a 11.5% stake in Comair), Phuti Mahanyele-Dabengwa and Ronald Ntuli all resigned.
Erik Venter resigned as CEO with effect from July 31 last year, while financial director Kirsten King has announced her resignation, effective February 28.
Even following the appointments of two non-executives and two executive directors (joint CEOs Wrenelle Stander and Glenn Orsmond), the board now comprises 10 members from 16 at the start of 2019. Assuming the departure of Welgemoed and Borer, this will drop to just eight. The appointment of a new financial director will see this number increase to nine.
Joint CEO structure
Tuckwood also questioned the joint CEO structure.
He notes that: “It has previously not worked at Comair, and the recent removal of the joint Sasol CEOs is another case in point.”
Tuckwood highlighted his concerns that “there was no division of responsibility and accountability between the two CEOs, and no clear guidelines on how their performance will be individually assessed and remunerated”.
Comair announced early last month that with effect from December 15, “Wrenelle Stander will assume the role of group CEO of Comair Limited, while Glenn Orsmond will assume the role as CEO of the airlines division”.
LONG TIME. Two non-executive directors of Comair – in which British Airways has a 11.5% stake – have served on the board for more than 40 years.