Un­der-fire Co­mair shakes up board


The Citizen (KZN) - - Front Page - Hil­ton Tar­rant Hil­ton Tar­rant works at YFM

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”.

Pic­ture: Sup­plied

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.

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