Absa Group’s CEO and board chair strongly defended the banking giant’s transformation credentials to shareholders at an AGM this week.
Group CEO Arrie Rautenbach said hiring and promotion practices at Absa were geared towards improving diversity. He was reacting to shareholder activist organisation Just Share, which raised questions about female representation at executive level.
“If you look at the hiring and promotion ratios across the different levels of our organisation you will see Africans, Indians and coloureds hired at a senior management level sitting at 83%, and of that 47% were women appointments and promotions,” Rautenbach said.
Business Times reported in May that Absa was caught up in another transformation storm after senior black executives confronted Rautenbach over critical senior appointments and the planned removal of the head of the group’s Africa operations.
This was after the banking group announced that Deon Raju, previously group chief risk officer and a former group treasurer, would assume the role of group financial director. Rajal Vaidya was named interim group chief risk officer, while Christine Wu replaced Cowyk Fox as CEO of the Everyday Banking business unit.
However, the appointments caused ructions as some senior black executives believed proper processes were not followed and that the changes were a setback to transformation. At the AGM on Monday, Rautenbach defended the bank’s transformation record, saying the group’s female executive representation was better than five years ago.
Our executive [female] representation is now sitting at 29%, which is well up against the five-year average you indicated,” Rautenbach said in response to questions from Kwanele Ngogela, a Just Share senior inequality analyst.
Rautenbach said 87% of middle management appointments were people of colour, and 47% of them women. At junior management level, the promotion ratio was 96% blacks, Indians and coloureds, 77% of them women. “We measure our organisation against key inputs, and what is encouraging for us is we are seeing all those inputs moving in the right direction with the intensity and speed we are looking for,” he added.
Absa board chair Sello Moloko said the group can “always do bette” when it comes to transformation and women representation at management and executive levels. “Have we done very well? We can always do better, and it is a point of focus of the board,” he told shareholders.
Moloko said Absa had made progress and “would like to do more” to improve female leadership representation as it pushes for diversity and inclusion. “In the time I have been on this board, we have made some progress to this end. Certainly, we would like to do more.”
He described the appointment of Wu as head of Everday Banking as a win for female representation, saying it reflects the group’s focus on having women leading its commercial units.
“When you look across the group and across the markets in which it operates, you find very strong representation of women across the senior management level. Certainly, in South Africa, we do have a level of involvement of women in senior management positions.”
Ngogela of Just Share had asked why female representation on Absa’s executive committee averaged only 19% over the last five years and senior management had seen only a 3.8% increase over the same period.
Prabashni Naidoo, group chief internal auditor; Jeanett Modise, group chief people officer; and Punki Modise, group chief strategy and sustainability officer, were the only three women members of the group's executive committee, according to Absa’s 2023 annual report.
Moloko said succession planning remains an ongoing consideration at board and executive level to ensure transformation, diversity, inclusion and promotion across all management levels.
“We are committed to investing in our talent to deepen our pool of potential leaders. Succession is a number one priority of this board. Through our integrated approach to talent management practices, coupled with the targeted investment in developing critical and scarce skills, we continue to strengthen our succession whilst sustaining a culture where everyone belongs at Absa,” he said.
Moloko said the group was also making a concerted effort to address the employee pay gap. This was in response to another question from Just Share on pay disparities.
“We do invest a lot of time in looking at matters of that nature; we have taken certain actions in the past to address the pay gap, especially at the lower levels. We have made a concerted effort to ensure we do not have those kinds of anomalies in the business.
“We have gone a long way between 2022 and 2023 to address these anomalies and spent a quite a bit of money to address these anomalies. Cleary there may be circumstances where some of these anomalies are justified based on performance-related issues.”
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