EDITORIAL: Ms Botha, chairing a bank is not a side hustle
The Capitec board leader ought not to have so many distractions.
If the 2008/2009 global financial crisis has taught regulators anything about systemic risk, it is that chairing the board of a systemically important bank is a full-time job.
From a regulatory perspective, there is a compelling argument to discourage board chairs from taking on demanding jobs elsewhere because they simply would not have time to take on reinforced oversight duties in the management of the custodians of the nation’s savings.
David Walker, former chair of Morgan Stanley, who is considered to be an expert in corporate governance best practice, is even more specific about how much time a bank chair should devote to the role. The chair of a major bank should be expected to commit a substantial proportion of his or her time, probably around two-thirds, to the business of the entity, with a clear understanding from the outset that, in the event of need, the role would have priority over any other commitment.
No wonder the Reserve Bank’s bank supervision unit, the Prudential Authority, is said to have urged Sello Moloko — one the biggest names in SA business leadership circles — to leave his post as chair of Telkom to focus his attention on Absa, a banking giant deeply embedded in the economy and the financial system.
Headed by deputy governor Fundi Tshazibana, the Prudential Authority got its way towards the end of November 2022 when Moloko left his post at Telkom. That is a good thing. The Soweto-born mathematics graduate must now have more time on his hands to provide meaningful oversight of Absa at a time when the industry is looking for new income streams beyond basic financial services, and to fend off competition from nimbler app-only banks.
The same thing could be said about Nonkululeko Nyembezi, who left her position as chair of JSE Ltd for Phuthuma Nhleko to take up a similar role at Standard Bank, and Mpho Makwana, who resigned as chair of Nedbank as he already had too much on his plate in the shape of Eskom. Rodger Jardine will probably tell you that being chair of FirstRand is his main hustle since being promoted to the role in 2018.
We cannot say the same about Santie Botha, the chair of Capitec. Alongside oversight of the biggest unsecured credit lender in pursuit of new business in commercial banking, Botha leads the board of Famous Brands, which runs the biggest fast food chains network, and Curro Holdings, a company that is mounting an aggressive challenge to established businesses in private education. She is the busiest of all board leaders in the SA banking industry, and probably too busy.
If the reasons for Moloko’s departure, as reported by Business Day, are any guide, the banking regulator should be uncomfortable that this financial institution is led by someone so distracted. Capitec is a relatively new bank, offering few commercial products for corporates and none in the vast mortgage market, but it is a stock market behemoth. It boasts a market capitalisation that makes it the second-largest lender after Standard Bank, and with 19-million customers Capitec is the country’s biggest lender by that measure.
It is too big to fail — big enough for the Prudential Authority to nudge Botha into relinquishing some of her responsibilities, as it did with Moloko.
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