The Public Investment Corporation (PIC) has criticised banking group Absa for appointing Arrie Rautenbach as its new CEO.
In a statement on Friday (1 April), the PIC expressed its “downright disappointment,” adding that Absa had missed an opportunity to show its commitment to transformation.
PIC on Absa’s new CEO appointment
The appointment was also a missed opportunity to promote diversity, inclusivity, and racial and gender equity across Absa’s most senior levels, Africa’s largest fund manager added.
“The PIC expected that the [Absa] board would have placed the required focus on transformation in the process to recruit a new CEO,” it said.
“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.
“Transformation should be a core strategy of the bank, driven from board level. This should incorporate a clear commitment, with clear targets for all levels of management.”
The PIC, which owns 5.41 percent of Absa, said it has requested an urgent meeting with the group’s board, which should “present its transformation strategy and plan.”
Absa announced Rautenbach’s appointment via a statement issued on Thursday (31 March). He is the first internally appointed CEO at the group since 2006 and was Chief Executive: Retail and Business Banking before his promotion.
“He joined Absa in 1997 and has held several senior roles over the years, including Chief Risk Officer, Chief Executive: Retail Banking South Africa, Managing Executive: Absa Card and Managing Executive: Branch Network, Absa Bank,” the bank said.
The previous CEO, Daniel Mminele, resigned in April last year, citing differences with the board in views and approaches in implementing strategies.
His resignation drew concerns from various stakeholders, including the PIC, which similarly expressed “disappointment” at executive-level “instability” at Absa.
President Cyril Ramaphosa has since appointed Mminele as head of the Presidential Climate Finance Task Team where he is expected to lead South Africa’s efforts to mobilise finance for a just transition.