For some of SA’s largest and most influential companies, 2024 will be a defining year as they welcome new leaders at the helm.
The CEOs will have to contend with a host challenges, both internal and external, as they seek to steer their organisations through a complex and uncertain environment. They will have to balance the demands of shareholders, customers, employees, regulators and society at large, while adapting to rapid changes brought about by technology, climate change and geopolitics.
Some of the changes in leadership represent a generational shift, as younger and more diverse executives take over from long-serving predecessors. For example, Nedbank and FirstRand, two of the country biggest banks, have appointed new CEOs who are both in their 40s.
Jason Quinn, who is taking over from Mike Brown at Nedbank, and Mary Vilakazi, who is succeeding Alan Pullinger at FirstRand, will have to build on the strong foundations laid by their predecessors and take the lenders to the next level.
Other changes in leadership signal a need for a turnaround strategy, as some companies struggle to cope with the energy crisis, and regulatory pressures. Sasol named Simon Baloyi as its CEO, replacing Fleetwood Grobler. Baloyi will need to convince shareholders, activists and regulators that Sasol can deliver on its ambitious decarbonisation targets, while also navigating a challenging macroeconomic environment and maintaining profitability.
He will have to balance the need to invest in low-carbon technologies and projects while managing Sasol’s debt and cash flow. That is not an easy task for any CEO, let alone for one who is under sharper scrutiny from civil society groups, which accuse Sasol of not being transparent and accountable enough on its climate performance.
Similarly, Pick n Pay, the country’s second-largest grocery retailer, whose share price is at levels last seen almost two decades ago, has drafted in Sean Summers, 70, who plans to show investors that the company can stay in the game.
The Cape Town-headquartered retailer has the thinnest profit margins in the industry. It barely makes 3% after paying for its costs, about half what its closest rival, Shoprite grinds out every year, leaving it little room to compete in a market in which debt-laden, cash-strapped consumers are hunting for bargains.
Investors have already given the new boss at Tiger Brands a vote of confidence, sending shares in SA’s largest consumer foods maker soaring more than one-third since Tjaart Kruger’s appointment last October. The former boss of Premier Foods will have to reposition the company in the consumer foods market, where it has lost ground to nimbler rivals such as AVI, Libstar and PepsiCo.
Aside from dealing with internal, sometimes self-inflicted challenges, the new CEOs, alongside the rest of corporate SA, will also have to contend with familiar themes that will shape the outlook for corporate SA in 2024.
First, persistent power cuts by Eskom have been a huge drag on the economy and a source of frustration for businesses and households. The state-owned utility has warned that load-shedding will continue until at least 2027 as it struggles to maintain its ageing and unreliable fleet of coal-fired power stations. Businesses will have to invest in other sources of energy, such as solar, wind and gas, to reduce their dependence on Eskom and lower their carbon footprint.
Second, Transnet is also likely to be the source of the depressed mood in corporate boardrooms in 2024. The inefficiency and dysfunction of the country’s ports, railways and roads have hampered economic activity and competitiveness. The costs of the economy, and businesses such as mining companies, are known but there is an increasing risk that SA’s reputation as a reliable trading partner could be in irreversible decline after bottlenecks at the ports late last year.
Other themes that will shape the outlook for business include softer commodity prices, which have prompted companies such as Anglo American, Sibanye and ArcelorMittal to embark on punishing cost cuts that have the potential to set up a showdown with unions in a country with more than 30% unemployment rate.
Business leaders, new and old, will have to navigate these challenges, while addressing the specific issues facing their respective companies. They will have to demonstrate strategic vision, operational excellence and agility. This year will test their leadership and resilience, as well as present opportunities to make a positive and lasting difference.
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