Spar and SAA lose their captains while becalmed in treacherous waters

While there are a few indications that a company is in trouble, there is one obvious situation in which you know the ship is about to founder on the rocks. 

Financial statements and numbers contain some of the indications that the fathoms below the keel are running scarce. Particularly if the moat that surrounds the company has been breached.

But the real-for-sure way of knowing a firm may be holed below the waterline is when one or more individuals are fired, or there is a sudden spate, or steady stream of resignations.

If the captains of the ship are fighting and have bust-ups over the compass readings and the correct course, you know it’s taking on water.

And may not have the space to pump it all out.

SAA and Spar are clearly two of those firms.

On Monday, the Stock Exchange News Service carried an announcement that both the chairperson and the deputy chairperson of Spar have resigned. Mike Bosman and Shirley Zinn are both leaving immediately.

There is something curious about the phrasing that suggests something is very odd here.

The statement reads that “While Mr Bosman and Dr Zinn continue to have the full support of the Board, taking into consideration the context of the period that both these directors and the Board have recently experienced” they have both “separately concluded that stepping down” is the right decision for them, and for the company.

There is the usual blah-blah about the board thanking them for their “dedication, professionalism and the meaningful legacy” they leave etc. 

But there are no real answers to the only question that always matters: Who navigated us to this spot?

It’s true, as the statement points out, that Bosman found himself not just chairperson but executive chairperson for a while, he actually had to run the company when the previous CEO resigned suddenly. And when you actually have to captain on a minute-by-minute basis rather than just provide overall leadership as a commodore, that must be very difficult.

But to leave the bridge now, when your board backed you so publicly back in May creates so many questions.

The problems the group faces are well known; its franchise model has suddenly become a weakness when Shoprite can leverage its direct ownership of its stores to drive its delivery business, and Spar’s backroom logistics operations have been a disaster in KwaZulu-Natal (some estimates suggest it lost about R1.5-billion in turnover as a result).

All of this means it is really battling to recover at a time when the retail model is changing around it. And for the moment, I can’t see an easy way out of this reef.

While two high-profile board resignations are one thing, the suspension of a CEO can be even worse. 

And when it’s an interim CEO, a captain who was brought in to stabilise the ship, well it all looks like a bad comic opera.

Which is exactly what’s happened at SAA. The board there suspended “interim CEO” Matshela Seshibe on Friday, 14 August.

The Sunday Times suggested it might be because of something that had happened at his previous job at the plastic-encased chicken-or-beef provider Air Chefs.

As always happens with these things is that there is now a process to determine whether he can stay or not.

Considering Seshibe’s reputation has already been besmirched, rightly or wrongly, by what happened at Daybreak Farms (the chicken producer that didn’t feed its animals), this is surely his last chance.

Which means he will fight hard to retain his job, and thus his ability to work again.

And that means there must be at least a chance he could be reinstated. Can imagine the atmosphere in the room when he attends his first board meeting after that?

This kind of problem might well be becoming a little more common.

Just six months ago Kennedy Bungane resigned with immediate effect as CEO of the good ship African Bank after what must have been a huge bust-up with the board in the officers’ wardroom.

It seems the real problem was the difficulties they were having in melding the three newish units of their businesses together, after they had bought three separate financial institutions.

Looking at it now, one can have some sympathy for him. After all, the same board that clearly wanted him off the bridge must have chosen the compass bearings that got them here.

They must have signed off on each and every one of the transactions that led to that situation. And yet he was the one who had to walk the plank.

Navigating out of a reef is incredibly difficult, it requires amazing captaincy and a board who are excellent navigators themselves.

Spar and SAA are now in those treacherous waters. 

It will require excellent seamanship and a strong group of officers to get back on the right heading. DM