Joint CEOs applauded

2013-03-10 10:01

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Organisations lobbying for the development of black professionals have welcomed the extraordinary step by Standard Bank to appoint Sim Tshabalala and Ben Kruger as joint chief executives this week.

While the secretary of the Black Business Council, Sandile Zungu, told City Press it would be surprising and “bizarre” if the appointments were not an interim or short-term arrangement, the managing director of the Black Management Forum (BMF), Nicholas Maweni, said the move was a step in the right direction for transformation in the commercial-banking sector.

Zungu said Tshabalala should ascend to the CEO position within the next two reporting periods and believed the appointments were made to avoid ostracising Kruger.

“If that’s the intention, then this bizarre arrangement can be forgiven. Otherwise this is the surest way of destroying shareholder value as two senior leaders and their followers will?either vie for glory or duck for cover,” said Zungu.

Zungu called Standard Bank, Africa’s biggest bank, South Africa’s “aorta of banking”.

Organisationally, said Zungu, the Standard Bank board was better placed to assess the suitability, or otherwise, of both Tshabalala and Kruger, and to anticipate the impact of the joint appointments.

“This arrangement may be good (on the) inside, but it looks strange from the outside,” said Zungu, who felt that the move was not patronising to either man.

“I doubt if Sim Tshabalala would feel he needs any validation. He is an organic banker with unrivalled experience. Other than Sizwe Nxasana, very few, if any, black professionals, or any banker for that matter, enjoy more respect than Sim in the commercial banking space in South Africa today. He can bat and spin bowl,” said Zungu.

According to Zungu, Tshabalala also had no reason to be concerned about his standing within the bank and he gave credit to Kruger for being a great banker in his own right.

He said: “Clearly he (Kruger) is most respected internally. I suspect he and Sim will work out a smart arrangement that will enable Sim to benefit from his know-how.”

Maweni said the forum was delighted that the career of a “young individual”, Tshabalala, who is also a BMF member, was growing within the bank.

“I do not see anything wrong with the sharing of the roles and responsibilities. The chat I’ve had with Tshabalala is interesting because they (Tshabalala and Kruger) have been approached by the board and they fully understand this process and are happy. They endorse it.

They both believe that it is the best way to have both of them there,” said Maweni.

He said the appointments were “understandable” since the banking industry had undergone massive changes over the past 13 years, during which Jacko Maree – who retired this week – was at the helm.

“To run a financial services corporation that is global, like Standard Bank, is complex. I can’t see any pitfalls in any way, especially since they understand their dual responsibilities. Many companies have done these arrangements through another layer under the CEO or by appointing chief operating officers or deputy CEOs. This makes perfect sense, since they have clear roles and responsibilities, and the board considered all factors before making these appointments,” said Maweni.

The Black Business Executive Circle (BBEC) also welcomed Tshabalala’s appointment, describing it as “a step in the right direction, demonstrating that business is not only paying lip service to economic transformation. (Standard Bank) acts on its commitment to the principles of a viable democracy by appointing black leaders into key leadership positions of significant influence”.

The BBEC’s chairman, Hlengani Mathebula, said: “Tshabala’s appointment will surely go a long way towards restoring confidence in big business for ordinary citizens and civil society as the debate on issues, including lack of progress in employment equity and on the economic-transformation front, continues to rage on.”

What Saki had to say

Did the bank act politically correct?

Not at all. Standard Bank is a sytemically critical component of the South African and African financial architecture.

The board is painfully aware of its responsibility not to play games with this institution and to do the right thing at all times.

That does not mean we would act in a politically stupid way. The decision moves the bank forward.

Some people will say this shows corporate SA does not yet trust that black people are ready to run big institutions?

We did expect some to say that.

I believe that the place, role and track record of Standard Bank in South Africa speaks volumes in its defence in this regard.

Sim is competent to run any institution in South Africa at any time.

It is the view of the board that the current business conjuncture requires that we use the talents of two individuals.

One happens to be black, the other happens to be white. In the end, there are many who can argue that Ben alone should have been given the job and that this is affirmative action gone too far. They, too, are wrong.

Can it damage their reputations?

Not at all. The most concerning issue would be their reputations in the organisation – whether they are seen as credible leaders or not.

We have no such concern at all. Both men are accomplished enough and respected enough as bankers that any concerns will soon disappear like mist in a rising sun.

Can they work together?

Sim, Ben and Peter Wharton-Hood have been working together as deputy CEOs and as partners in the delivery of their respective parts of the profits of the bank. That part we know works because of the empirical evidence and experience that we have.

If we had any doubt on this score, we would have abandoned the idea right at the beginning.

We had to convince the regulators that they can work and have worked together for years. We have had to demonstrate that there are no grey areas in their responsibilities.

We have also made sure that both understand that they are jointly and severally responsible for the success of the bank.

The chairman will be at hand to provide advice when necessary, but the responsibility is theirs.

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