Why South Africa’s top CEOs are leaving

A record number of top South African chief executive officers have left their posts in recent weeks, sparking questions about what’s behind the mass exodus.

In May, Eskom, Old Mutual, Massmart, and Comair’s chief executives all announced that they would step down from their roles.

Speaking to CNBC Africa, director of the Chairman’s Institute and of Portfolio & Co Johann Redelinghuys, said that the outflow of CEOs is ‘unprecedented’.

“The interesting this that it’s not just CEOs leaving, but also CEOs that are leaving after a very short space of time,” he said.

Redelinghuys said that there is a combination of factors that lead to these types of departures, including:

  • The CEO goes into the job without a clear mandate;
  • There is a disagreement between the board and the CEO due to communication issues;
  • The disagreements are often down to the personality, character and integrity of the CEOs rather than the actual facts of the matter.

“I don’t think we have a leadership crisis, but I do think we have a communication crisis,” Redelinghuys said.

“The communication between the chief executive and the board/chairman is often lacking in content and the ability to see things through.”

Redelinghuys said that the often cited ‘lack of trust’ is simply due to poor communications lines.

“They keep talking about a lack of trust, but as in any relationship, a lack of trust is a lack of communication. I really do believe that in many of these cases, communication is at fault,” he said.

Old Mutual

Redelinghuys cited the most recent case of Old Mutual CEO, Peter Moyo, who last week parted ways with the insurer.

Before taking up the position, Moyo claims that he disclosed that he had outside interests. However, he was suspended after a disagreement over how the company should engage with an investment firm he founded.

Moyo told Reuters by phone that his suspension related to ‘how different parties thought Old Mutual should engage with NMT Capital, which he founded and in which an Old Mutual subsidiary is an investor’.

“That relationship has always been there from the day I started and it was properly disclosed,” he told Reuters by phone, emphasising the suspension was the result of differences on the approach to engagement rather than the relationship itself.

“There is actually absolutely no wrongdoing on my part,” he said.

Redelinghuys questioned the ongoing spat between Moyo and Old Mutual’s board. “The board keeps saying that (his resignation) has nothing to do with his performance or his ability. So if it was disclosed beforehand, and if it’s not about his ability, then what’s the story?

“A lack of trust often occurs just because of a lack of communication. I’m sure in a case like this and Arcelor Mittal and the Alexander Forbes case, it’s exactly the same thing.

“There needs to be very careful communication, and it’s the skill of the chairman that comes under the spotlight in a case like this,” Redelinghuys said.

A number of Alexander Forbes executives have resigned from the insurance-services provider, extending a management exodus following the ousting of former CEO Andrew Darfoor in September.

Bloomberg reported that Alexander Forbes was midway through a turnaround programme when Darfoor was ousted after his strategy was questioned by the company’s second-largest shareholder, African Rainbow Capital Investments.


Read: Old Mutual explains why it suspended CEO Peter Moyo – as shares dip

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Why South Africa’s top CEOs are leaving