EDITORIAL: New broom has to deal with old troubles at Absa

All things considered, 2021 was shaping up not to be a bad year after all for Absa, which has seemed to go from one leadership crisis to another in recent years.

Just a little more than three weeks ago, it inked a potentially transformative deal in the asset management industry, teaming up with Sanlam and Patrice Motsepe’s African Rainbow Capital. Two weeks before that, interim CEO Jason Quinn announced an intention to implement a second broad-based BEE transaction. While the bank has once again found itself with an acting leader, something of a clear strategy seemed to be emerging regarding its aim to challenge Standard Bank in corporate and investment banking.

Unfortunately, old problems have come back to haunt it. Even those who are used to Absa’s leadership instability in recent years will have been left gasping for air by the latest revelations regarding what board member Sipho Pityana says was an intention to appoint him as its chair to replace Wendy Lucas-Bull, whose term ends in March 2022. 

Business Day reported on Monday night that Pityana was taking the Prudential Authority (PA) and Absa itself to court because it blocked his appointment, though Absa says the board did not put his name forward at any stage. The bank said it selected a different nominee, Sello Moloko, after a “robust” process, making it clear that it will contest Pityana’s version on the alleged interference by the regulator.

In essence, Pityana is arguing that the head of the PA, Kuben Naidoo, colluded with Maria Ramos, the former CEO of Absa, to block his appointment. Ramos is chair of AngloGold Ashanti, having replaced Pityana there late in 2020, under circumstances that were less than clear. It came three months after the departure of former CEO Kelvin Dushnisky.

Sexual harassment

Because of the key role banks play in the economy, board members and key executives need to get the approval of the regulator, which makes a ruling on whether the person is “fit and proper”, and whether such an appointment is in the public interest.

In Pityana’s telling in his affidavit, Ramos, a former boss of Naidoo at the Treasury, had “unfettered access” to the regulators and alerted them to a sexual harassment allegation, which he denies, made against him during his time at AngloGold. Not only has he been denied a prestigious position, Pityana argues, but he has also been defamed by the implication that he is not a “fit and proper person”.

Perhaps the full truth will come out if there is a court process. But what does this episode say about Absa and its leadership culture? It might have gone unnoticed by many that the bank is also named as a respondent in Pityana’s lawsuit. And yet he remains on its board, having been named as lead independent director in June 2020.  

This shows that leadership is still a real problem for an institution that has now had three CEOs since Ramos retired in February 2019. Even that departure was not the best managed, with the bank citing the fact that she had turned 60 years old. But it had clearly not planned for this eventuality and would be run by an interim CEO until the end of that year.  

The reason given was that it had the “right man” in mind all along and it had waited until it landed him. Daniel Mminele, who had had a distinguished two-decade career at the central bank, arrived in January 2020, but he did not last. In an organisation notorious for alleged cliques and fiefdoms, Mminele parted ways with the bank in April 2021 over differences with the board, then led by Pityana and Lucas-Bull, and senior staff members on the implementation of its strategy. The latter cited concerns about a potential loss of talent for the decision.  

We can only wish Moloko well as he will walk into an environment that is in need of fundamental change. And his most important job will be to pick a CEO. Will he be brave enough to assert his authority, pick a leader from the outside and then back them to do what is needed?