Opinionista Johann Redelinghuys 22 July 2019

Finding the real reasons for boardroom battles

When boardroom clashes occur, watch not for the stated reasons. It may look like a battle about dividends, not pay or character issues which have suddenly appeared, casting doubt about the integrity of the key players. Or it may be that the board questions whether it made the right appointment in the first place.

In boardroom battles, instead of all the lobbing of accusations and the preoccupation with financial matters, look rather for the personality issues. What is the nature of the individuals concerned and how are their personalities playing out?

Old Mutual, like several major listed companies in the past few years, has parted company with its CEO. Not content to deal with the matter internally, it has allowed it to escalate into an unseemly public squabble. There is reputational damage all round and the only ones clapping hands are the lawyers.

The poisonous conflict between the dismissed CEO, Peter Moyo, and Trevor Manuel, the chair of Old Mutual, is not really about the dividends of NMT Capital not having been paid to preference shareholders. It is also not about Moyo having “a conflict of interest” in the matter of payments. Further, it is not about Moyo’s recent attack of Manuel over the chair’s conflict of interest for staying on as chairman of Rothschild which has earned fees for the restructuring of Old Mutual Plc, and it is not about who paid whose legal fees.

Then what is the conflict all about? Like any bitter divorce, when the chips are down and the parties have to give reasons for their decisions to separate, there is usually no end to the meanness and fault-finding, with character assassinations top of the agenda.

But, as we have said, it is not about the stated reasons that they have been fighting in the Old Mutual boardroom. It is, I submit M’lord, about the personal likes and dislikes of the dramatis personae. It is about their personalities. Forget for a moment who was “gunning” for whom. Or why.

These two guys simply don’t like each other. Now they have to find credible reasons to part ways.

Moyo, perhaps sensing that he is on a roll, is expanding his attack and has submitted that the 13 non-executive directors are delinquent and should be barred from serving on the board of Old Mutual. This is presumably because they were not alert enough to have picked up the stated conflict of interest of the chairman in his setting up a business mandate for Rothschild, a company he chairs, doing a lucrative consulting assignment with Old Mutual, the company he also chairs.

There have been a number of other such boardroom battles in recent times, including within the boards of Alexander Forbes, MTN, Sasol, Arcelor Mittal, Group 5 and Liberty. Most often it is about the board losing confidence in the CEO whose behaviour has not been acceptable. Inevitably there is an ensuing loss of trust

Some boards have managed the separation process in a more courteous manner. Alexander Forbes when it fired Andrew Darfoor in 2018 agreed to say the minimum about the matter, and not to encourage any public debate. The matter was dealt with internally and in an exemplary manner.

Now Old Mutual says it is “looking forward” to challenging Moyo in court and Moyo has filed papers in the High Court wanting an urgent interdict to have himself reinstated while the whole thing gears up for the final court denouement. What a pity it has got to this, and there is never going to be a satisfactory ending

The two key players in this contest are both highly competitive individuals who don’t like losing; each an admired captain of industry. It is impossible, on every board of directors to like everyone and to maintain the collegial atmosphere that chairmen and board members work keenly to achieve. Some dislikes must surely occur.

But the best advice must be to deal with it internally as far as possible, and not to let such feelings develop into a Moyo-Manuel slug-fest. BM

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