Absa Bank, SA’s fourth-largest bank by market capitalization, has pledged to make significant advances in senior-level race and gender reassignment over the next 18 to 24 months.
At its first annual general meeting as Chairman, Am Friday, Sello Moloko said that while the bank had “made progress on multiple levels in the organization,” there was “work to be done on race and gender reassignment.”
“We have engaged with key stakeholders , including several black business organizations, explaining our need for transformation, how important it is to the board and senior management, and our approach to ensure we meet this particular challenge.”
Moloko said so in In his engagements with these organizations and other stakeholders, Absa had “declared our commitment to make significant progress over the next 18 to 24 months to be able to demonstrate steps at management level”. As the board would consider raising race and gender transformation goals, he said, “The issue of transformation has been an ongoing issue, and the issue of diversity and inclusion is something that we are bringing seriously from the board level down into the organization.”
Regarding the departure of key women from the board like Wendy Lucas-Bull and Punki Modise, Moloko said, “We know we’ve taken a step backwards and it’s a question of how we refresh the board , we will continue to look into this and watch and make sure we remain appropriately representative and within the company as well. It’s imperative.”
Lucas-Bull resigned as Chair at the end of March after completing the nine-year maximum tenure for the position.
Modise was a member of the Board of Directors interim CFO after CFO Jason Quinn was named interim CEO when Daniel Mminele stepped down as CEO last April.
She resigned from the board in late March after Quinn returned to his post when Arrie Rautenbach became permanent CEO.
When Absa announced the appointment of Rautenbach in March this year, The Public Investment Corporation (PIC), which owns more than 5% of Absa stock, said it was “downright ‘ disappointed with the bank and missed an opportunity to engage in transformation.
Said Absa at the time it ‘took PIC’s concerns seriously’ and ‘would continue to engage with them constructively ‘, but also defended Rautenbach’s appointment, citing his track record nz in terms of business performance and its ability to meet corporate goals.
Meanwhile, independent analyst Jimmy Moyaha said Absa has been slow to transform and for the longest time has struggled with internal nurturing and succession planning.
Moyaha said before hiring Rautenbach it was a really good opportunity for them to advertise along the transformation lines.
“One can’t help but wonder if they’re being forced into it , through things like mandates and government laws that force their hands more than they really want,” Moyaha said.
Farai Mapfinya, Chief Investment Officer at Aequalis Asset Managers, said that Banking is a very competitive segment of the market and “we think there is a lack of skills.”
“What bothers us is the scale of Absa’s departures to competitors. It reflects some internal shortcomings in terms of organizational culture and leadership.
“However, we must also be careful not to accept a token appointment in order to achieve transformation goals. A number of banks have done this successfully, and succession planning is a long-term and evolving game that Absa hasn’t been able to get right for a while,” Mapfinya said.
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