Nedbank goes through all the right motions

2009-09-12 12:38

BARELY two weeks after assuming her new role as Nedbank’s first black chief financial officer (CFO), Raisibe Morathi has found herself embroiled in a race row following allegations that she had been “stripped” of the responsibilities her white predecessor had.

The matter was on the agenda at a meeting between the bank and ­Department of Labour director­general Jimmy Manyi.

On Friday Nedbank’s top brass – including chief executive Tom Boardman, Morathi and the bank’s chairman, Reuel Khoza – met with Manyi to review the bank’s progress regarding transformation.

“The meeting was part of the DG’s review, which is aimed at assisting companies implement acceptable transformation,” said Manyi.

“The responsibilities of the new CFO came up as a new issue and the bank’s representatives have promised to consult all the role-players involved in the appointment and to come back to me before the end of October.”

The latest storm at the lender was triggered by allegations from Sello Rasethaba, chairman of the Lobbying Corporation of South Africa, that Nedbank had usurped Morathi’s powers and created an executive structure that transferred her responsibilities to Graham Dempster, Nedbank’s new chief operating officer (COO).

As Nebank’s financial tsar, Morathi reports to Dempster, who is in charge of finance, balance sheet management, information technology, strategic planning, human resources, marketing and corporate affairs.

The COO position was created after Morathi accepted the CFO role, and effectively means that Dempster is second-in-command to Mike Brown, who will take over as Nedbank chief executive officer (CEO) when Boardman retires in March 2010. Morathi replaces Brown, who has been CFO for the past five years.

“Morathi is a CFO stripped of all the functions that previous CFOs had, including finance and balance sheet management.

“The question is, what is it that Morathi is going to do? One is led to conclude that Nedbank is making a mockery of what black economic empowerment seeks to achieve and also violates the requirements of the JSE on the duties and responsibilities of listed companies’ CFOs,” ­Rasethaba said.

The Association of Black Securities and Investment Professionals, a mouthpiece for black professionals in the financial services industry, also questioned why Morathi was not reporting directly to the CEO in Nedbank’s new executive structure.

“The decision to change the management structure and reporting lines of any organisation is one that is made by the CEO with the support or buy-in of the board.

“Interestingly, a quick perusal of the annual reports of Standard Bank, Absa, FirstRand and Investec reflect a structure where the CFOs report directly to the CEOs,” said Absip CEO Masedi Molosiwa.

“We will engage individually with Nedbank and Raisibe to understand the executive structure. A key element of advancing the transformation agenda is the opening up of real opportunities with meaningful roles for black talent where there is a direct link between the title and the scope of work,” he said.

After the meeting, Khoza said Morathi had assumed 70% to 80% of Brown’s previous functions, excluding balance sheet management and risk management. The lender’s balance sheet was worth R557 billion at the end of June this year.

“When we interviewed her (Morathi), she was strong in about 70% to 80% of what was required for the CFO position. By her own admission, she said she would like to ramp up on Basel II and risk management.

“We never imposed any responsibilities on her and when she believes she has ramped up sufficiently on Basel II and risk management, it will be her call to assume back the remaining responsibilities,” Khoza said.

Basel II is a set of world-class recommendations on banking laws, first published in 2004, which stipulate how much capital banks need to put aside to guard against the ­financial and operational risks they are faced with.

Khoza said Morathi was appointed ahead of experienced white candidates to darken the pigmentation of Nedbank’s top executive, 43% of whom are now black.

“There were candidates that we interviewed for the job who were stronger than Raisibe in terms of ­experience, but they were all white. We insisted on appointing her because transformation is imperative for us and we were not prepared to budge on it,” Khoza said.

Attempts to get hold of Morathi on Friday were unsuccessful.

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