Just days after indicating that the Shoprite board will discuss the future of Christo Wiese as chair of the company in coming months, Prof Shirley Zinn, the lead independent director of Shoprite, resigned.
At Shoprite's AGM on Monday Zinn indicated that a succession plan was actually already in place regarding Wiese's position as chair.
Late on Wednesday afternoon, Shoprite issued a statement to advise shareholders that Zinn had tabled her resignation from the board and all relevant board committees with immediate effect. The process to appoint a replacement for Zinn has started, Shoprite said.
The board expressed its gratitude towards Zinn for her contribution.
Netwerk24 reported on Tuesday that shareholders holding more than 61% of ordinary Shoprite shares voted against Wiese's re-appointment as a director of the company.
Wiese, however, managed to retain his seat on the board due to his control of 42% of the voting rights in the Shoprite group.
Zinn was appointed to the Shoprite board just months ago, as a replacement of Edward Kieswetter, who now heads SARS. She is also an MTN director, and was previously an HR executive at Woolworths, Standard Bank, Nedbank and SARS.
Shane Watkins, investment head of All Weather Capital, told Netwerk24 on Wednesday evening that Zinn's resignation came as a shock.
When a lead independent director resigns unexpectedly, it usually relates to their reservations whether they can conduct their responsibilities as lead independent director, he added.
This announcement today of the sudden and immediate resignation of Shoprite’s lead independent non-exec director, Shirley Zinn - with no reason provided and no replacement, leaves us with no choice but to surmise what the breakdowns must have been on that Board. Hmmm....?? https://t.co/yl9YGHWOHY
— Delphine Govender (@Delphine_DG) November 6, 2019
Quite the boardroom battle at Shoprite Holdings! ?? Highly-regarded independent director Prof Shirley Zinn has resigned *with immediate effect*. Highly unusual. And she only joined the board last August!— Hilton Tarrant (@hiltontarrant) November 6, 2019
Penny for Christo Wiese’s thoughts? ??
Zinn also chaired Shoprite's remuneration committee, and was supposed to lead a project to fundamentally overhaul the company's remuneration policy in coming months.
Wiese told Netwerk24 that he doesn't believe the vote results demonstrated distrust in him.
In his view, it was part of a growing trend among institutional shareholders who increasingly demand independent chairpersons.
Asked whether investors may not have as much confidence in him following the Steinhoff crisis, Wiese said it's their confidence in the Shoprite management team that counts, as well as how he collaborates with that team.
Wiese was a close associate of disgraced former Steinhoff CEO Markus Jooste. He lost more than R23bn after Steinhoff all but collapsed in 2017 amid extensive corporate fraud.
The Shoprite group recently reported turnover growth of more than 7% in the three months to September. In South Africa, its turnover rose by 10.3%, with prices at its shops rising by 3.0% over the period.