The Public Investment Corporation (PIC) has voiced its disappointment with the Absa Group board for appointing a white man, Arrie Rautenbach, as its new chief executive.
Earlier this week, Absa announced the promotion of Rautenbach. He has worked for the company for 25 years and held the position of head of retail and business in the bank.
According to the PIC, in its correspondence with the Absa Group board, it said the appointment was a missed opportunity for the board to publicly demonstrate its commitment to "purposefully transform the banking group and advance diversity, inclusivity, and racial and gender equity, at the most senior levels of organisation".
"As a significant shareholder, the PIC had previously recorded its disappointment to the board about the apparent instability at the executive level, following the departure of its former CEO (Daniel Mminele) in April 2021 – a long-awaited, black senior hire, who, purportedly, had divergent professional views and approaches to that of the board," it said.
Mminele was with the bank from January 15, 2020, until April 20, 2021. He was the first black chief executive to serve in that role.
The PIC said it had expected that the board would have placed the required focus on transformation in the process to recruit a new CEO.
"This should be a key business risk for the board, considering the nature and breadth of services Absa provides to South African society," the PIC said.
"The PIC wants initiatives to advance transformation in large corporations should expressly be linked to incentive structures of the organisation, with a significant weight accorded to the executive and senior management, to ensure that the requisite commitment and accountability take full effect in practice.
"The PIC has requested an urgent meeting with the Absa board and for it to present its transformation strategy and plan. Transformation should be a core strategy of the bank, driven from the board level. This should incorporate a clear commitment, with clear targets for all levels of management," it said.
BUSINESS REPORT ONLINE