Shoprite, which recently appointed its first female chair, has committed to improving the diversity of its board and executive management team after it faced tough questions from activists at its annual general meeting on Monday.
The board of Africa’s largest retailer now has three women after new chair Wendy Lucas-Bull on Monday took over from outgoing long-standing chair Christo Wiese. He was replaced after more than 60% of shareholders voted against his reappointment at the 2019 annual meeting.
At the meeting, Emma Schuster from activist group Just Share, asked why the group had kept its 2019 board diversity targets for the 2020 year. The transformation targets for the board, which have been exceeded, are 15% to 20% female and 30% black.
The board consists of five white members and three black African and Indian.
Shuster said the targets were not reflective of the SA population.
Wiese said the company felt it “prudent” not to make “necessary changes” to the board during the “very difficult period” of Covid-19 lockdowns.
He said that two long-serving directors had accepted re- election but would step down when the right replacements were found to “create an opportunity to bring new personalities and faces onto our board”.
As he closed the meeting he said: “We have always been very committed, both in terms of management, and also the board to try our best to reflect the diversity of our country with all the limitations that one has in this regard.”
Wiese told Business Day, “it is not a simple exercise to reconstitute a board and one has to find qualified people, who are willing to serve on boards”.
Tracey Davies, executive director at Just Share, questioned why the company’s senior management was only 7% black and 1.5% female.
Shoprite CEO Pieter Engelbrecht replied that the company had exceeded the employment equity targets as required by the department of employment & labour.
Davies later told Business Day that “the company claims to be committed to diversity. But, after 25 years of transformation efforts, to suggest that it is a decent outcome for your top management team to be only 7% black, and less than 2% female, indicates that the commitment might not be that strong.”
Executive pay was also under the spotlight at the annual meeting, when two non-binding votes on executive and directors’ pay did not get the required 75% vote.
This unsuccessful vote triggers a JSE rule that requires the company to meet unhappy shareholders to hear their concerns. It is not immediately clear which shareholders voted against the pay policy and why.
Wiese, who was part of the remuneration committee, told Business Day that he was surprised the advisory vote failed as it was exactly the same policy as last year’s, which had passed.
“We were totally surprised. Last year, it was approved. Suddenly, for whatever reason, a lot of people voted against it.”
He did not yet know who was unhappy.
“I have no answer until we have engaged with shareholders.”
According to Shoprite's annual report, Engelbrecht's pay increased 35% from R21m to R28m as he had met long-term performance targets while CFO Anton De Bruyn’s pay increased 7.8%.
Wiese’s pay increased 27% from R1.2m to R1.5m, which is below the PwC remuneration benchmark for a chair of a large retailer.
Asked about stepping down as a chair, after building the company into Africa's largest grocer from eight stores in 1979, he said: “I have had a wonderful 41 years. I have no sadness whatsoever. Life evolves. It's an exciting company with great prospects. I am very happy to still be part of it.”
He remains on the board as a non-executive director.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.