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Picture: 123RF/sophiejames
Picture: 123RF/sophiejames

A growing number of respected black corporate executives are  locked in protracted legal battles with former employers. These legal skirmishes are playing themselves out in the public domain, with no sign that there will ever be outright victors or amicable resolutions.  

Former Dimension Data (Didata) chair Andile Ngcaba and former Old Mutual CEO Peter Moyo are pursuing their former employers after boardroom squabbles spilt over into the courtrooms. In June Ngcaba was in court to demand R440m from Didata, an amount he believes he could have earned during his 12-year stint at the IT giant from 2004 to 2017 had he been paid the same as his white colleagues.

Moyo has been in the trenches with Old Mutual, the 176-year-old financial services group, since 2019 after the termination of his employment contract by the company. He wants the entire Old Mutual board, which is chaired by former finance minister Trevor Manuel, to be arrested for failing to obey a high court in Johannesburg ruling that reinstated him after he challenged his dismissal.

Both Ngcaba and Moyo are represented by advocate Dali Mpofu, an abrasive lawyer with political clout as a senior member of SA’s third-largest political party, the EFF. Mpofu does not hesitate to represent leaders of the governing ANC who have fallen on the wrong side of the law, including former president Jacob Zuma, who is facing arms corruption charges.

Just as we were watching these interesting legal duels unfold, an extremely unhappy Sipho Pityana, an Absa board director, burst into the headlines with his own employment-related troubles. Two weeks ago he launched a media blitz claiming that an allegation of sexual harassment against him had been “weaponised” to block his chances of ascending to Absa’s chairmanship role.

At the time the story broke Pityana, a respected business figure who once led Business Unity SA, was Absa’s lead independent director, a senior role in the board that is just one notch below that of the chair. 

Pityana revealed that he was taking legal action against the SA Reserve Bank’s Prudential Authority (PA) for blocking his nomination as Absa’s chair. According to Pityana, the PA had “informally” dug into his background and discovered that he was accused of sexual harassment by a female manager in 2020 when he chaired AngloGold Ashanti. Pityana denies the sexual harassment allegation against him.

Since the events of two weeks ago Pityana has been removed from his role as lead independent director of Absa and from another role as chair of the bank’s remuneration committee. But he remains a board member.

Some people have questioned why Pityana is still on the Absa board despite the controversy surrounding him, which has tarnished his reputation and by extension that of Absa. Directors are expected to be squeaky clean and strict adherents to good corporate governance.

However, Pityana cannot just be booted off the Absa board willy-nilly, applying the laws of the jungle. In SA section 71 of the Companies Act provides a pathway for removing  directors, who can be removed from boards for a number of reasons, including dereliction of duty, lack of performance, negligence, incapacity or disqualification.

Assuming the intention is to kick Pityana off the Absa board, under section 71 this can be achieved in two ways, either by Absa’s shareholders or by the board itself. Shareholders lean on section 71(1) to remove a director, while fellow directors must apply section 71(3) to achieve the same outcome.

Once a removal process has been determined, (I assume Pityana will be slapped with section 71 (3)), Absa will have to draft a resolution and statement setting out why it intends to remove him from its board.

A copy of the resolution and the statement will be sent to him to give him sufficient time to prepare his response or defence. Other board members will also be sent the resolution and statement and given a date for a specially convened board meeting, where the resolution will be put to a vote.

At the meeting Pityana would have the option of either representing himself or electing a representative to defend him, before voting commences. If removed from the board through a no-confidence vote he may approach the courts within 20 business days to ask that the board’s decision be overturned.

For a lack of a better comparison, section 71 is similar to an HR disciplinary hearing, with the shareholders or fellow board members as the complainants and with the wayward director as the respondent.

The skirmishes involving Moyo, Ngcaba and Pityana are likely to rumble on for months to come, providing intrigue, entertainment, sorrow, grief, gossip and conspiracy theories. But it is worth considering why they are becoming more frequent, when in the past such public spats were rare.

They involve executives who were once the darlings of SA’s corporate sector and financial media, people whose names and pictures were splashed across newspapers and television screens after they were appointed to the boards or executive managements of large listed companies.

Many were propelled to these roles as SA companies implemented broad-based BEE legislation, which was meant to atone for apartheid injustices.

The question therefore arises: is it all normal, just a matter of directors and executives battling it out in the boardroom over ethics, corporate governance, strategy, executive remuneration, profits and dividends? Or have these men fallen out of favour given the ANC’s declining power? 

• Ntingi is founder of GetBiz.


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