BUSTING THE BANK
Absa fires Sipho Pityana as lead independent director, souring relations further
Absa has fired Sipho Pityana as the bank’s lead independent director. Pityana remains an ordinary board member. Absa’s move comes two weeks after Pityana dragged SA’s regulator of banks to court, citing Absa for allegedly blocking his candidacy as the bank’s board chair.
Sipho Pityana, who serves on the Absa board, never expected the relationship with his colleagues to break down after he dragged SA’s banking regulator to court for allegedly blocking his appointment as the bank’s chair.
After taking this extraordinary step in late October 2021, Pityana said he had no intention of stepping down from the Absa board until the conclusion of his court case. Pityana also told Business Times that he didn’t see his legal action affecting the Absa board’s functions or his relationship with colleagues.
But there are signs that Pityana’s relationship with Absa is starting to break down as his powers and responsibilities on the board have been stripped.
As investors were winding down for the weekend, Absa announced on Friday just before 5pm that its board had decided to remove Pityana from his positions as a lead independent director and chair of the remuneration committee, and therefore from the board’s directors’ affairs committee.
As a lead independent director, Pityana was responsible for giving a voice to the concerns of other Absa directors on matters ranging from executive remuneration to the bank’s strategy on corporate governance. He joined the Absa board in May 2019.
There was no suggestion in Absa’s late Friday announcement that Pityana might also step down from the board, even though he has cited the bank in his court case against the Reserve Bank’s Prudential Authority (PA). So, Pityana now remains an ordinary Absa board member. The PA is a regulator of banks in SA and vets and approves the nomination of board appointments and other key executives to ensure that candidates are qualified and experienced.
In essence, Pityana claims that the head of the PA, Kuben Naidoo, was influenced by former Absa CEO Maria Ramos to block and sink his appointment as the bank’s chair.
According to Pityana, Ramos brought Naidoo’s attention to an adverse finding against Pityana in a sexual harassment investigation in 2020 when he was the chair of AngloGold Ashanti. AngloGold launched an investigation, which found Pityana was responsible for wrongdoing. But Absa subsequently obtained a legal opinion that questioned the thoroughness and findings of the investigation. This allegedly paved the way for Naidoo to not support Pityana’s nomination as the Absa board chair to replace Wendy Lucas-Bull, who plans to step down in March 2022.
Pityana doesn’t seek relief against Absa, but wants the PA’s conduct to be declared “unlawful” and in contravention of the Banks Act. His court case is yet to be heard at the High Court in Pretoria.
In the interim, Absa didn’t give reasons for downgrading Pityana’s position to an ordinary board member. Pityana referred a request for comment to Absa, which in turn was disinclined to respond to Business Maverick’s list of questions, among them, whether the bank had asked Pityana to step down from all board responsibilities until his court case is concluded.
Absa said: “We have no further comment on this matter. But it must be noted that the decisions and actions of the Absa boards are always informed by the best interest of Absa and its stakeholders as well as the responsibilities and fiduciary duties of the directors of the board.”
A Johannesburg-based analyst said Pityana’s removal from his position as the lead independent director is a sure sign that his relationship with the rest of the board has quickly deteriorated.
“It must be tense when Pityana walks in at Absa Towers in Joburg CBD for board meetings after he has effectively attacked the integrity of the bank, its former CEO and regulator. These meetings will be awkward for many weeks to come.”
The analyst also questioned why the board downgraded Pityana’s position at Absa a full two weeks after he launched his legal action.
“His independence as a director might have been compromised as soon as he cited the bank in his court case, and made serious allegations against the former CEO and the banking regulator’s head. Pityana’s court case might be a distraction for the board and executive management. There are already ructions at an executive level.”
The “ructions” at an executive management level refers to the fact that Absa has no permanent CEO after Daniel Mminele abruptly stepped down in April 2021, citing a difference with the board about the bank’s future strategy. CFO Jason Quinn is acting CEO. DM/BM
- An earlier version of this story erroneously stated the AngloGold report had cleared Pityana. Apologies for the error.