First Thing, Daily Maverick's flagship newsletter

Join the 230 000 South Africans who read First Thing newsletter.

We'd like our readers to start paying for Daily Maverick

More specifically, we'd like those who can afford to pay to start paying. What it comes down to is whether or not you value Daily Maverick. Think of us in terms of your daily cappuccino from your favourite coffee shop. It costs around R35. That’s R1,050 per month on frothy milk. Don’t get us wrong, we’re almost exclusively fuelled by coffee. BUT maybe R200 of that R1,050 could go to the journalism that’s fighting for the country?

We don’t dictate how much we’d like our readers to contribute. After all, how much you value our work is subjective (and frankly, every amount helps). At R200, you get it back in Uber Eats and ride vouchers every month, but that’s just a suggestion. A little less than a week’s worth of cappuccinos.

We can't survive on hope and our own determination. Our country is going to be considerably worse off if we don’t have a strong, sustainable news media. If you’re rejigging your budgets, and it comes to choosing between frothy milk and Daily Maverick, we hope you might reconsider that cappuccino.

We need your help. And we’re not ashamed to ask for it.

Our mission is to Defend Truth. Join Maverick Insider.

Support Daily Maverick→
Payment options

As CEO Daniel Mminele departs, you’ve got to wonder i...

Defend Truth

Opinionista

As CEO Daniel Mminele departs, you’ve got to wonder if Absa knows what it really is

mm

Sasha Planting is a seasoned financial journalist and Associate Business Editor at Daily Maverick Business.

Is it possible for a company to stumble because it’s having an existential crisis about who and what it really is? I think that is the problem with Absa, whose CEO, Daniel Mminele, is leaving after a mere 16 months.

First published in the Daily Maverick 168 weekly newspaper.

That Absa has a competent board with diverse skills and a healthy racial and gender mix is a given. That the board has the interests of all of Absa’s stakeholders at heart is also a given. This is a board that invested thousands of hours to navigate the group through its complex exit from Barclays and chart a new strategic direction for Absa – both processes that cannot be underestimated.

And this is a board that believed it had found the best possible CEO in Daniel Mminele, wooing him and selecting him ahead of internal candidates and waiting for him to complete his six months of gardening leave. Indeed, Mminele’s credentials are impeccable. As a deputy governor of the SA Reserve Bank, where he had been for 20 years, he has a deep and intimate understanding of South Africa’s banking landscape. He also has some commercial experience, having completed stints at Germany’s Commerzbank and the UK’s African Merchant Bank early in his career. And as regulator he oversaw the bailout and rehabilitation of African Bank after its collapse in 2014 – so he knows what things look like when they go wrong.

If both the board and the CEO are competent, one must ask whether Mminele was the best possible fit for Absa, whether Absa was the best possible fit for him and, if not, why neither of them knew it.

This brings me back to my original question – does Absa really know who it is? It strikes me that by appointing the cerebral Mminele, the board has a certain view of Absa, who its clients are and what needs to be done. Has the board noticed that the battle is actually out there in the trenches, where the five big banks are constantly elbowing each other and challenger banks are hungry for market share? Clients – companies, individuals and investors – are under pressure and are demanding service from their banks. Today’s market conditions require an incumbent who would need to roll up their sleeves and get their hands dirty (in the gardening sense). Was Mminele, who is on first-name terms with Nobel prizewinning economists and others in the world of global high finance, really the candidate for the job? And if he was, why did the board not back him?

In any organisational setting, relationships are critical. But, for sustained organisational success, there must be alignment between the board, the CEO and the executive team on the strategic direction of the business – which it appears there was not.

When there is no alignment, it’s usually the CEO who goes. In January African Bank CEO Basani Maluleke resigned, ostensibly following disagreements with board chair Thabo Dloti. A few years back Alexander

Forbes CEO Andrew Darfoor was ousted after disagreements with the board. And, giving away my age, the resignation of BHP Billiton’s CEO, Brian Gilbertson, in 2003, only 18 months into a four-year contract, attracted much speculation and many column centimetres following a dispute with the board over the company’s strategic direction.

Absa might need to adjust its strategy and its culture, but it is a rocksolid organisation with 100 years of history. It is not facing the same sort of existential crisis as Cell C, whose new strategy will determine its future. The bank has an asset base of R1.5trillion (the thirdlargest of the banks), a market capitalisation of R102billion and a workforce of 37,000 operating across 14 countries.

At the same time, when an organisation that is at the heart of South Africa’s economy gets such a critical appointment wrong, questions must be asked of the board.

It’s dithering with strategy and palace politics, but its competitors know exactly what they are doing and where they are going.

Just this week FNB, known for its digital innovation, unveiled a new set of tools enabling individual and business customers to manage and update their information securely via its financial services platform.

Capitec, with 15.8million clients, up from 13.9million a year ago, has an equally ambitious digital strategy. This week it launched an app feature that makes it possible to open an account from anywhere, anytime, using facial biometrics. Also, Capitec, which acquired Mercantile Bank last year, is quietly moving in on the SME market, a heartland for Absa.

Nedbank too is focused on providing services to small businesses, among other digital offerings. This week, in partnership with Mastercard and local fintech player Ukheshe, it launched a tool that allows clients to make payments to businesses via messaging platform WhatsApp. Called Money Message, it has been specifically developed to process payments for merchants and small businesses.

Standard Bank, with an almost 25% market share, just keeps on doing what it does under the leadership of Sim Tshabalala. Appointed as joint CEO with Ben Kruger in 2013, Tshabalala has kept the ship steady since 2017 – which is what a good banker is meant to do. Arguably, the stability and market share has allowed the “big blue” to become a tad complacent, allowing its customer satisfaction rankings to slide. With this in mind, the bank has revamped its management structure, chivvied up its business units and digitised its systems to better meet the needs of customers.

Absa cannot afford to get it wrong again. So, when it is assessing prospective candidates, perhaps the board needs to introspect about what type of person would really suit the job – not the person they want to suit the job.

When an organisation that is at the heart of South Africa’s economy gets such a critical appointment wrong, questions must be asked of the board. DM168

This story first appeared in our weekly Daily Maverick 168 newspaper which is available for free to Pick n Pay Smart Shoppers at these Pick n Pay stores.

Gallery

Comments - share your knowledge and experience

Please note you must be a Maverick Insider to comment. Sign up here or sign in if you are already an Insider.

Everybody has an opinion but not everyone has the knowledge and the experience to contribute meaningfully to a discussion. That’s what we want from our members. Help us learn with your expertise and insights on articles that we publish. We encourage different, respectful viewpoints to further our understanding of the world. View our comments policy here.

All Comments 1

  • … but it is a rocksolid organisation with 100 years of history.
    It does NOT have “100 years of history”! Being a mixture of Allied Bank, Trustbank, Volkskas (who else?) not even 50 years ago to become one of the worst banks to have an account.

Please peer review 3 community comments before your comment can be posted