With South Africa's major financial institutions ushering in changes at C-suite and board levels, the Reserve Bank’s Prudential Authority (PA) — which regulates the sector — says succession planning is key to stability.
Speaking to journalists in Johannesburg this week after the release of the authority's latest annual report, CEO Fundi Tshazibana said the PA was having “robust” discussions with financial institutions on their succession plans.
“Succession planning is a very important anchor of stability because we have found in some organisations there are key man dependencies, and we always have to plan around the inevitable. People get ill, sometimes people pass on, so these are dynamics in the organisations and we need to make sure there is critical mass,” she said.
Banks are keeping their executives on board for longer by extending the retirement age in an effort to attract and retain skills and talent in a competitive environment.
Standard Bank announced it had lifted the retirement age of its executives to 63 from January 2026, and Nedbank is set to make the same move in August.
Nedbank Group CEO Jason Quinn is 50. This week, the bank added 41-year-old Andiswa Bata to its C-suite as MD for business and commercial banking. She is being poached from FNB, where she is CEO of the business segment.
Capitec CEO Gerrie Fourie, 61, will retire following the group’s annual meeting on Friday, after 11 years at the helm. He will be succeeded by the group executive of the personal bank division, Graham Lee. Capitec's retirement age is 65.
First Rand appointed Mary Vilakazi as the first woman CEO in 2023. It also appointed Harry Kellan as CEO of FNB after the departure of Jacques Cilliers.
Absa has appointed Kenny Fihla, 54, as Group CEO.
Tshazibana said when the PA meets the boards and their chairs, it inquires about skills gaps and individual capabilities. “You have the chairs of different committees; if something happens to that individual, who is the chair of that committee, who can take over when they are not there?”
Tshazibana said they can spot gaps when boards inform them that they have a single specialised person who can chair a specific technical committee, and they flag this as a concern.
When it comes to the C-suite, the conversation is more “nuanced” because of the structure. She said the PA asks about “emergency cover”, in the event something happens to the CEO.
We spend a lot more time speaking to institutions about their broader talent management
— PA CEO Fundi Tshazibana
“Some institutions may say we have one person, at which point it tells us they need to hire more people at that leadership layer. We spend a lot more time speaking to institutions about their broader talent management.
“Our preference in the PA is that an institution that knows its CEO is going to leave needs to plan, because when you are changing senior leadership in an organisation it's really not just about the people, it is also about the culture that you are hiring into.”
An analyst said more needs to be done to nurture new talent at executive management and board level.
Radebe Sipamla, co-portfolio manager at Mergence Investment Managers, said recycling talent at C-suite and board level was common, leaving many companies unable to unearth fresh talent despite leaders being in their mid to late 50s.
“Evidence of this is clear in companies that have leadership instability at both board and executive level, which culminates in revolving C-suite doors. This ultimately impacts the ability to craft and execute on long-term operational strategies and on financial performance.”
He said FirstRand had demonstrated an effective succession plan after its leadership shake-up, which had no negative impact on operations or staff morale.
“Corporates need to be intentional about recruiting, retaining, and grooming exceptional leadership talent and driving transformation of the economy to better reflect the country’s demographics. Otherwise corporate South Africa will face serious challenges over the coming years when the current C-suites and boards cohort retires, as they would not have invested adequately in granular succession planning,” Sipamla said.
Meanwhile, the PA said it would appeal a Pretoria high court judgment which found that it acted unlawfully and exceeded its powers when it objected to Sipho Pityana's nomination as chair of the Absa board.
Pityana was tipped to replace Wendy Lucas-Bull as chair but was withdrawn from the list after the PA’s former deputy governor, Kuben Naidoo, approached then Absa chair Maria Ramos to inquire into the circumstances of Pityana’s resignation from AngloGold Ashanti.
Pityana, formerly chair at AngloGold Ashanti, faced accusations of sexual harassment, but steadfastly denied these claims.
Tshazibana confirmed they were taking the matter on appeal.
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.