Absa to be a captainless ship for 10 months
CEO Maria Ramos steps down at end of February and successor to be announced in August
Absa could be without a permanent CEO for up to 10 months after Maria Ramos steps down at the end of February, according to group chairman Wendy Lucas-Bull.
While Ramos’s retirement has been expected for some time, analysts say her swift exit suggests that the board was caught unaware and that it did not have a firm succession plan in place.
The lender said on Tuesday that Ramos, who will have led the company for exactly a decade when she departs, would retire in just a month’s time, when she turns 60.
René van Wyk, a nonexecutive director at Absa since February 2017 and a former registrar of banks at the SA Reserve Bank, will take over in the interim.
Lucas-Bull told Business Day that Absa planned to announce Ramos’s permanent replacement when it published interim results in August, and her successor would probably take over from the beginning of 2020.
“We’re essentially talking about a one-year interim period,” she said.
Ramos’s decision to step down followed the conclusion of a number of strategic actions triggered by Absa’s separation from erstwhile parent Barclays.
When Barclays announced that it planned to sell its majority stake in Absa in 2016, Ramos agreed to stay on to negotiate a settlement with its parent, to plan what work needed to be done and to start the separation process.
“That also triggered a rethink of the strategy in terms of what it means to be a standalone financial institution rather than a 62% subsidiary of Barclays plc, and and a rethink of the brand. So we agreed with Maria, that with all of those things hitting us unexpectedly, we absolutely needed continuity of leadership,” Lucas-Bell said.
The process was completed when Absa announced a new strategy in December 2018. “And the February date was coming up, so the combination of those triggered where we are now,” Lucas-Bull said.
The board, which was in talks with candidates for the role, was looking for a person who would stay in the job for five-seven years, “so obviously they’ve got to be of an age that gives you that runway”.
The replacement should also be “a respected financial-services executive”.
FNB Wealth & Investments’s Wayne McCurrie said the suddenness of Ramos exit suggested “it wasn’t Absa’s plan for Maria to leave now — but I think she’s just tired, as I would be”, after gruelling years managing the separation.
“Appointing an interim CEO shows that this has caught the board a little unawares — there clearly wasn’t an internal succession plan in place to cope with her leaving now,” McCurrie said.
He said that an external appointment would be preferable as “everyone at Absa who’s been there 10 years has been so internally focused on trying to sort out the mess Barclays left them with”.
Lonwabo Maqubela, head of research at Perpetua Investment Managers, agreed that the board was seemingly “caught off guard” by Ramos’s departure.
Maqubela said appointing a CEO with “fresh eyes, with a good local understanding and a steady hand, would be first prize”.
The board, which has seen a number of changes in recent years, should also be strengthened, he said.