Absa has removed Sipho Pityana as lead independent director with immediate effect, in a move that indicates a possible rift between him and the board over his decision to take the Reserve Bank’s Prudential Authority to court for allegedly unfairly blocking his candidacy as Absa’s chair.
In a Sens statement on Friday, Absa said the Absa Group and Absa Bank boards have resolved that Pityana will “cease” to be lead independent director and chair of the remuneration committee and, “as a consequence, member of the directors’ affairs committee with immediate effect”.
Absa did not give reasons for its decision. Pityana is still a member of the board, the bank said.
Pityana could not be reached for comment.
Ashburton chief investment officer Patrice Rassou said the reshuffle indicated that the working relationship between Pityana and the rest of the board had “clearly deteriorated quite severely”.
He said that while Absa says Pityana will remain on the board, there must be a “feeling from the rest of the board that he cannot be independent and that he cannot lead the committee he was in charge of”.
“That shows to me that there has been a breakdown in the relationship between himself and the rest of the board.”
Rassou said Absa lagged the rest of the big four banks because of the “constant management changes” and now is dealing with yet another leadership issue in relation to Pityana. He was referring to the fact that CFO Jason Quinn is currently acting CEO after Daniel Mminele stepped down in April this year over differences with the board about Absa’s strategy.
“The market always wants continuity and stability once a project has kicked off,” said Rassou.
Anchor Group CEO Peter Armitage said listed companies, “especially high-profile ones like Absa, have no desire to get involved in any public spats” and that could explain why the bank decided to remove Pityana from those positions — so that it could “take the appropriate action to get on with its business”.
He added: “The difficulty is that the public does not have the details, so it’s difficult to reach any hard conclusions. Shareholders have entrusted a board to make the right decision.”
That shows to me that there has been a breakdown in the relationship between himself and the rest of the board
— Ashburton chief investment officer Patrice Rassou on the move
Absa’s board decision comes two weeks after Pityana said he had no intention of resigning from the board and that his legal action should not affect the board’s functions or his relationship with colleagues.
He said at the time that his Absa board colleagues “initially unanimously supported my nomination [as chair] and proceeded to recommend my name, and it’s quite clear I have nothing but support from colleagues”.
Pityana acknowledged that some board members were unhappy about his decision to go to court.
He is accusing Reserve Bank deputy governor Kuben Naidoo of blocking his candidacy and possible appointment as Absa chair. Pityana joined the board in May 2019.
In his court papers, Pityana has asked for a declaratory order against the Prudential Authority, saying it had conducted an informal process that prevented his nomination to potentially become chair of Absa.
He said that through an “informal process” the Prudential Authority had conducted deliberations about him that involved external parties — in particular, his successor as chair of AngloGold Ashanti, Maria Ramos — concerning a “false and untrue allegation” of sexual harassment that was made against him in 2020.
This was allegedly raised by Ramos with Naidoo, who is head of the Prudential Authority, when Pityana’s name was put forward by Absa.
Upon being made aware of the sexual harassment allegations, Absa commissioned its own independent legal review of the AngloGold Ashanti investigation and findings and found that the mining group’s report was flawed. This was because the senior counsel tasked with investigating the matter, Heidi Barnes, had failed to fully consider material evidence presented to her and to obtain important corroborating evidence from independent sources.
Though Pityana said the Absa board had initially resolved to nominate him, it withdrew that decision after its own investigation when Naidoo said the regulator would object to it.
Pityana resigned from the AngloGold Ashanti board after the conclusion of the sexual harassment investigation.
He also accused Ramos of breaking a confidentiality agreement that he said AngloGold Ashanti had reached with him before he left the mining company.
AngloGold Ashanti has denied Pityana’s allegations against Ramos, describing them as baseless, and said there was no agreement between the parties.
“There was never any offer of a settlement, nor any settlement made” between the parties, AngloGold Ashanti said in a statement last week.
AngloGold said its board’s approach to disclosure was informed by disclosure regulations and primarily focused on the need to protect the victim.
The Prudential Authority is due to file its response to Pityana’s legal action this week.
