Peter Moyo, former Old Mutual CEO. Picture: SUPPLIED
Peter Moyo, former Old Mutual CEO. Picture: SUPPLIED

So frequently is the term “onerous fiduciary duties” drummed at retirement fund trustees that it beats with a hollow monotony. Sure, trustees and service providers will say, they’ve complied, and usually they have or at least can produce defences that they had. But every now and then unusual events occur that will challenge more than an ability to tick boxes.

Two recent high-profile situations are extraordinarily tricky. One arises from the inquiry of the judge-led commission into the Public Investment Corp (PIC). The other is in the contentious dismissal by Old Mutual of CEO Peter Moyo.

Start with the PIC.

The commission’s terms of reference were confined to investigations into allegations of irregularities. OK, so a whole series was investigated. Then what?

Some people will lose their jobs. Perhaps there’ll be recommendations on the future governance of the PIC, its hitherto confidential mandate from the Government Employees Pension Fund (GEPF) as its major client, and maybe proposals for reductions in duplicated activities in what was thought previously to be a model of the relationship between client and asset manager.

Until fairly recently, the PIC was the powerhouse for stakeholder activism. It had the muscle with the GEPF to cause shakes in investee companies and shivers on directors’ boards. No longer, unless an outcome of the commission is to restore the credibility of the PIC as a moralist for others.

The immediate fillip is in the appointment of a new 14-member PIC interim board. Chaired by the redoubtable Reuel Khoza and including the forceful Maria Ramos, neither of whom were government lickspittles during the Jacob Zuma years, among these nonexecutive directors are senior officials of three large trade unions.

Therein lies a potential conflict. The unionists were nominated to represent the interests of workers who contribute their savings, but once appointed as directors it’s impermissible that they do anything of the kind. Their fiduciary duty is to the retirement fund client and their accountability is not to the unions that sought representation. Were they to think otherwise, as many unions still erroneously do, the GEPF should quickly put them right; that is, if it has the gumption to tell them.

Then, without anticipating particular findings of the PIC commission, from the mountains of evidence there emerged a number of practices that might politely be described as questionable. Accordingly, to be asked is whether prejudice arose from the irregularities; if so, who was culpable for the prejudice and in what amounts?

If there was prejudice, the GEPF, as the PIC’s major client, would have been the major victim. Logically, therefore, the GEPF is obliged by fiduciary duty to sue for recovery. It acts either against respective individuals for pocketing gains irregularly received, or against the PIC, in which case the GEPF would be refunded from its own assets unless the new PIC board itself claws back from the individual beneficiaries (be they people or companies).

Strange days indeed. They’re made no less complex by the oversight of the PIC that the GEPF investment committee presumably had a duty to exercise.

Especially welcome is that the PIC board is now cleansed of incumbent politicians. The directors are nonexecutives, whereas the shenanigans appear largely have taken place in the ranks of executives. This happened even when the board was chaired by the angelic Mcebisi Jonas, then in his capacity as deputy finance minister, illustrating lacklustre controls.

The new board, assisted by the commission’s revelations, will need to dig a lot deeper into the organisation and get a much tighter grip than suited previous regimes.

Meanwhile, there’s the situation at Old Mutual.

It’s trite that directors owe a fiduciary duty to the company. Individuals, such as dismissed directors, don’t.

Peter Moyo, sacked as CEO by a unanimous decision of the Old Mutual board which Trevor Manuel chairs, must be well aware of it. The more airtime Moyo gets over the scrap – and he’s getting plenty – the better his chances for a golden handshake.

The board dare not succumb to supplementation of the R50m that Moyo picked up last year. So egregious was this amount that even the Old Mutual Investment Group (OMIG) had voted against the remuneration policy of its parent. Now, were Mutual to top up Moyo, it would not only be hoisting itself by the petard of its own remuneration policy but exemplifying that something akin to ransom is acceptable.

Between the rock of embarrassment and the hard place of payment, the lesser of two evils is that Mutual remains steadfast in telling Moyo to take a hike. Had the board not fired a senior executive in whom it had lost trust and confidence, thus impacting negatively on his workplace role, it stood to be accused of fiduciary breach at a cost to stakeholders.

It isn’t obvious how disciplinary proceedings might have repaired a loss of trust and confidence; for example, if the breakdown related primarily to a leadership style too divisive for large teams. Likeability, it’s said, was insufficient.

Moyo wants the board fired. The proper place is at the AGM when directors come up for re-election.

There he can vote without fiduciary constraint. So too can such other shareholders as OMIG and the asset managers of umbrella funds that Mutual sponsors, but which are respectively obliged by their fiduciary duties to clients and fund members in the exercise of independent discretion.

At issue is whether it’s in the better financial interests of clients and fund members, as well as policyholders and shareholders, that Mutual gives Moyo additional pay to go away. If it does, then voting by fiduciaries at the general meeting could be more contentious than the usual formality.

What a mess. What tests await fiduciary theories in their practical application.


  • Allan Greenblo is editorial director of Today’s Trustee (, a quarterly magazine mainly for principal officers and trustees of retirement funds