Absa on the hunt for seventh CEO in less than seven years
Charles Russon will become interim CEO after incumbent Arrie Rautenbach takes early retirement
19 August 2024 - 07:59
UPDATED 19 August 2024 - 22:43
by Kabelo Khumalo and Jacqueline Mackenzie
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Absa is looking for yet another CEO with incumbent Arrie Rautenbach opting for early retirement after “discussions with the board” and weeks of speculation that he did not enjoy his executive team’s support.
He will serve as CEO and an executive director until October 15. Then there will be a six-month contractual notice period of garden leave. The board thanked “Arrie for his commitment and extensive contribution to Absa over a career spanning more than 27 years and wishes him well in his retirement.”
Charles Russon will become interim CEO of Absa Group and Absa Bank on October 15, subject to regulatory approval. He will also become an executive director of both. Russon becomes the sixth CEO, acting or permanent, of Absa, since 2019.
With its share price and financial performance trailing those of peers Absa is searching for its seventh CEO, permanent or acting, in only six years.
When Maria Ramos retired in 2019 after a decade in the role, she was replaced temporarily by René van Wyk, who acted in the role for a year. Then the lender roped in former Reserve Bank deputy governor Daniel Mminele as CEO. He lasted 16 months before differences between him and the board emerged over the strategic direction of the country’s third-biggest banking group by assets.
Respected banker Jason Quinn acted in the role until Rautenbach was confirmed as the new CEO in 2022. Rautenbach’s early retirement comes just months after Nedbank poached Quinn as its CEO, succeeding Mike Brown.
Leadership instability
The bank’s leadership instability is in stark contrast to its peers. Sim Tshabalala has been at the helm of Standard Bank for a decade. Brown led Nedbank for 14 years until his retirement this year. FirstRand is also under new leadership after Mary Vilakazi took over after a few years as COO.
Khaya Sithole, secretary-general of the Association of Black Securities and Investment Professionals, said the loss of another Absa CEO is the latest instalment of a concerning trend in succession.
“In recent years, Absa has struggled with the tension between internal succession planning — where transformation emerges as a glaring point of contention as experienced black executives tended to shuffle outwards rather than upwards — and the sourcing of executives from outside the bank — where strategy and culture fit seem to represent the fatal blow to external candidates,” he said.
“Rautenbach’s term was meant to be the stabilisation era where the board under new leadership would gradually move on from the trauma of the Sipho Pityana saga, and the executive team would finally embark on a proper succession planning mission that would avoid the musical chairs of recent years. Unfortunately, that stabilisation era has been cut short. Arrie’s exit means once again Absa has to decide what type of organisation it wants to be.”
The Sunday Times reported extensively on how Rautenbach lost his leadership team’s confidence, which the bank denied. Absa’s board, led by Sello Moloko, will now be on the hunt for Rautenbach’s replacement.
Black business bodies are pressing the board to appoint a black CEO. Black Business Council (BBC) CEO Kganki Matabane said it was concerning that Absa missed a chance to appoint a black executive as acting CEO, pointing to lack of succession planning. “The BBC calls on the board of Absa to ensure that the permanent replacement of Mr Rautenbach is not a white male or anyone from the groups that are overrepresented as per the employment equity report.” He bemoaned “the revolving door of white CEOs”.
Russon has been CEO of Absa’s Corporate and Investment Bank (CIB) since 2018 and a group executive committee member since 2014. Yasmin Masithela becomes interim CEO of Absa’s CIB on October 15. She has been managing executive: corporate transactional banking at CIB since May 2019 and previously served on the group executive committee as CEO strategic services and chief compliance officer.
Updated: August 19 2024 The story has been updated with new information.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Absa on the hunt for seventh CEO in less than seven years
Charles Russon will become interim CEO after incumbent Arrie Rautenbach takes early retirement
Absa is looking for yet another CEO with incumbent Arrie Rautenbach opting for early retirement after “discussions with the board” and weeks of speculation that he did not enjoy his executive team’s support.
He will serve as CEO and an executive director until October 15. Then there will be a six-month contractual notice period of garden leave. The board thanked “Arrie for his commitment and extensive contribution to Absa over a career spanning more than 27 years and wishes him well in his retirement.”
Charles Russon will become interim CEO of Absa Group and Absa Bank on October 15, subject to regulatory approval. He will also become an executive director of both. Russon becomes the sixth CEO, acting or permanent, of Absa, since 2019.
With its share price and financial performance trailing those of peers Absa is searching for its seventh CEO, permanent or acting, in only six years.
When Maria Ramos retired in 2019 after a decade in the role, she was replaced temporarily by René van Wyk, who acted in the role for a year. Then the lender roped in former Reserve Bank deputy governor Daniel Mminele as CEO. He lasted 16 months before differences between him and the board emerged over the strategic direction of the country’s third-biggest banking group by assets.
Respected banker Jason Quinn acted in the role until Rautenbach was confirmed as the new CEO in 2022. Rautenbach’s early retirement comes just months after Nedbank poached Quinn as its CEO, succeeding Mike Brown.
Leadership instability
The bank’s leadership instability is in stark contrast to its peers. Sim Tshabalala has been at the helm of Standard Bank for a decade. Brown led Nedbank for 14 years until his retirement this year. FirstRand is also under new leadership after Mary Vilakazi took over after a few years as COO.
Khaya Sithole, secretary-general of the Association of Black Securities and Investment Professionals, said the loss of another Absa CEO is the latest instalment of a concerning trend in succession.
“In recent years, Absa has struggled with the tension between internal succession planning — where transformation emerges as a glaring point of contention as experienced black executives tended to shuffle outwards rather than upwards — and the sourcing of executives from outside the bank — where strategy and culture fit seem to represent the fatal blow to external candidates,” he said.
“Rautenbach’s term was meant to be the stabilisation era where the board under new leadership would gradually move on from the trauma of the Sipho Pityana saga, and the executive team would finally embark on a proper succession planning mission that would avoid the musical chairs of recent years. Unfortunately, that stabilisation era has been cut short. Arrie’s exit means once again Absa has to decide what type of organisation it wants to be.”
The Sunday Times reported extensively on how Rautenbach lost his leadership team’s confidence, which the bank denied. Absa’s board, led by Sello Moloko, will now be on the hunt for Rautenbach’s replacement.
Black business bodies are pressing the board to appoint a black CEO. Black Business Council (BBC) CEO Kganki Matabane said it was concerning that Absa missed a chance to appoint a black executive as acting CEO, pointing to lack of succession planning. “The BBC calls on the board of Absa to ensure that the permanent replacement of Mr Rautenbach is not a white male or anyone from the groups that are overrepresented as per the employment equity report.” He bemoaned “the revolving door of white CEOs”.
Russon has been CEO of Absa’s Corporate and Investment Bank (CIB) since 2018 and a group executive committee member since 2014. Yasmin Masithela becomes interim CEO of Absa’s CIB on October 15. She has been managing executive: corporate transactional banking at CIB since May 2019 and previously served on the group executive committee as CEO strategic services and chief compliance officer.
Updated: August 19 2024
The story has been updated with new information.
khumalok@businesslive.co.za
mackenziej@arena.africa
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