Daniel Mminele, formerly a deputy governor of the South African Reserve Bank, will be the second banking CEO to leave his role in unhappy circumstances in the space of a few months. Absa’s share price dropped 4%, compared to a decline in the financial sector of around 1%.
The Absa Group Board confirmed that the Group Chief Executive will be leaving the group with effect from 30 April 2021. “The parties have not managed to achieve alignment in relation to the group’s strategy and the culture transformation journey,“ the bank said in a statement.
Absa Group Chair Wendy Lucas-Bull said the board was very excited about Mminele’s appointment and the positive role he was going to play at Absa. “It is a matter of considerable regret that we reached this position. The parting of ways merely reflects divergent professional views and approaches, and is on a “no fault” basis. The board has conveyed to Mr Mminele its continued high regard for his competence and integrity. The parties believe that this course is in the best interests of the company and Mr Mminele. This was a very difficult decision that was not reached lightly,” she said .
Mminele said “it is indeed regrettable that we should have had to part ways so soon on our journey. It is, however, important for the Chief Executive to be in complete alignment with the board on critical issues such as strategy and culture”.
Mminele took over in January 2020 from René van Wyk, who led the bank on an interim basis after Maria Ramos retired in February 2019.
At the end of January, African Bank announced the resignation of its CEO, Basani Maluleke, saying she will be pursuing other career opportunities. However, speculation that she was pushed has never been put to bed.
How fast things change. On 1 April, Absa’s CEO was granted 117,702 Absa shares worth an estimated R14,999,942.88. The shares are only awarded – in equal tranches – on the third, fourth and fifth anniversary of the date on which they were granted.
Receiving the shares is subject to the achievement of performance targets, and importantly, continued employment, and forms part of Absa’s long-term performance plan for executive directors and prescribed officers.
At the time of his appointment, some 16 months ago, the appointment of Mminele was seen as a coup for Absa. “We are delighted to welcome Daniel to the Absa family. He brings with him a deep understanding of the financial services industry both in South Africa and abroad,” said Wendy Lucas-Bull, chairperson of the Absa Group Board. “His unique skillset and global perspective make him a suitable leader to drive our bank’s focus on long-term growth that is digitally-led across our markets.”
Absa Group launched its new growth strategy on 1 March 2018 as it separated from Barclays PLC. The strategy at the time prioritised cultural transformation as well as restoring a leadership position in the group’s core business areas. The board oversaw the reconfiguration of the operating model and made changes to its executive committee to set up the business for implementation of the strategy.
“In terms of his starting point, Daniel will want to assess where we are in implementing that strategy and assess how he can play a role in strengthening the team’s ability to continue on that journey. As a leader, he will make his own assessment of what is required, but he has a complete open mandate as the Group CE to lead this organisation,” Lucas-Bull said. DM/BM