- The Public Investment Corporation (PIC) has lashed out at Absa after the banking group appointed a white CEO, Arrie Rautenbach.
- The PIC believes this is “another missed opportunity” for the Absa board to publicly demonstrate its commitment to transformation.
- The state-owned asset manager says it has requested an urgent meeting with the Absa board.
The Public Investment Corporation (PIC) has lashed out at Absa after the banking group appointed a white CEO, Arrie Rautenbach.
In a statement on Friday, the PIC said it contacted the Absa board to express its “downright disappointment” with the board’s appointment of Rautenbach.
“The PIC believes this is yet another missed opportunity for the Absa board to publicly demonstrate its commitment to purposefully transform the banking group and to advance diversity, inclusivity, and racial and gender equity, at the most senior levels of organisation.”
The state-owned asset manager – which has over R1.9 trillion in assets under management, including civil servant pensions – owns more than 5% of Absa.
“The PIC had previously recorded its disappointment to the board about the apparent instability at executive level following the departure of its former CEO in April 2021 – a long-awaited, black senior hire, who purportedly, had divergent professional views and approaches to that of the board,” it said in a statement.
A year ago, former deputy governor of the SA Reserve Bank, Daniel Mminele, quit as Absa CEO following clashes with the board on how to implement the bank’s strategy. At the time, Absa chair Wendy Lucas-Bull said Absa’s leadership team also didn’t see eye-to-eye with Mminele on how to do things.
“The PIC expected that the board would have placed the required focus on transformation in the process to recruit a new CEO. This should be a key business risk for the board, considering the nature and breadth of services Absa provides to South African society,” the PIC said on Friday.
“Initiatives to advance transformation in large corporations should expressly be linked to incentive structures of the organisation, with a significant weight accorded to the executive and senior management, to ensure that the requisite commitment and accountability take full effect in practice.”
The PIC says it has requested an urgent meeting with the Absa board and for it to present its transformation strategy and plan.
Rautenbach was Absa’s head of retail and business banking before his appointment as CEO this week.
He has been with Absa since 1997 and has held several senior roles, including chief risk officer, as well as head of its card and branch network divisions.
“His extensive experience in the banking sector, his in-depth knowledge of Absa through several executive roles over the years, and his experience and strengths in strategy development and execution for the group, positions him ideally to lead the group at this time,” the bank said.
In November last year, the board axed Absa director Sipho Pityana after he took the Reserve Bank’s Prudential Authority to court for allegedly blocking his appointment to become chairman of Absa.
He is currently engaged in a legal battle with Absa to take him back or compensate him.
Former Momentum Metropolitan chair Sello Moloko has been appointed to replace Lucas-Bull as Absa chairman.