‘Nedbank most transformed in Africa’

2009-09-25 13:14

ARTICLES by one of your reporters and by an external columnist in City Press over the past two weekends contained several factual inaccuracies relating to the Nedbank Group. I have highlighted a few of these statements and would like to take the opportunity to set out the facts:

  • “Raisibe Morathi has been stripped of the powers previous chief financial officers (CFOs) had, including finance and balance sheet management.”

This is most certainly not the case and it would be inconceivable to ­appoint a CFO who did not hold ­responsibility for managing the ­finance portfolio. When Mike Brown was appointed CFO he was given additional ­responsibility to his predecessors because of his depth of banking experience. Prior to Brown’s appointment the CFOs in Nedbank Group had the same responsibilities that Morathi now has, which includes direct responsibility for finance.

At an early stage of discussions with Morathi, she stressed that she did not yet have the experience to manage some bank-specific functions such as the ­Basel?II risk management programme and the asset/liability management function. As part of the restructure these functions were assigned to other Exco members. In designing the new ­Exco structure it was necessary to ­reduce the number of executives reporting to Brown, and the position of chief operating officer was created. The group is extremely pleased to have been able to attract a person of Morathi’s ability and the structure allows her to focus on the key function of finance while gaining experience in other elements of managing a large banking group. Her functions are the same as those offered to her at the time of her ­acceptance.  "Nedbank formed an all-powerful white, male-dominated executive with a sprinkling of blacks stripped of all responsibilities.”

The 12-person Exco, excluding myself as I will retire in February next year, comprises five black executives and three women. The number of black Exco members is likely to increase once further positions are filled. This makes our Exco one of the most transformed of the listed companies on the JSE and certainly the most transformed of the large banks in South Africa.

  • “Nedbank ... violates the requirements of the JSE on the duties and responsibilities of listed companies’ CFOs.” The JSE listings requirements state in section 3.84 (h) “the audit committee must consider, on a yearly basis, and satisfy itself of the appropriateness of the expertise and experience of the financial director and the applicant issuer must confirm this by reporting to shareholders in its yearly report that the audit committee has executed this responsibility. All applicant issuers must have a financial director.”

Nedbank has complied in all ­respects with this requirement.

  • The articles question aspects of Dr Reuel Khoza’s chairpersonship of Nedbank Group. A bank chairperson is an onerous position and Khoza spends about two days of every week at Nedbank, and I and my Exco colleagues, who all meet with him regularly, gain tremendous insight from his experience. He is certainly not a “token chairperson”.

The concept of a senior independent non-executive director is certainly a fairly new position, but one that has been included in the Combined Code in the UK and in the King?III as part of good governance where the chairperson is not classified as independent. In Nedbank Group’s case the chairperson is a black economic empowerment partner and a director of parent company Old Mutual plc, and therefore in governance terms is not classified as an independent director. This in no way affects his ability to act and think independently and certainly has nothing to do with being black.

The Nedbank Group has moved from being one of the least empowered of the large banks in South Africa to the most empowered in a few short years. The 2009 Top Empowerment Companies survey rated the Nedbank Group as the most empowered financial institution and the third most empowered in all sectors.

We are proud of what we have achieved and are committed to furthering transformation and empowerment within the group.

Tom Boardman
Chief executive, Nedbank Group

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