Let us, for a moment, put aside the issue of whether Absa Group CEO Arrie Rautenbach “broke down” while addressing his top managers. Apparently, tears are a thing for CEOs. They’re a weepy lot.
The real issue at Absa is whether Rautenbach allowed his reported friend Cowyk Fox, a former CEO of Everyday Banking reporting to him, to work from his new home in the US after becoming an American citizen without contributing to the US social security and tax authorities. We all are wondering how a group CEO allowed his friendship to blind him to crucial compliance issues that have now put the bank in a bind. If the bank can’t trust Rautenbach to be alive to his fiduciary responsibilities, who must nanny the boss? We may well now ask if he is the best person to look after other people’s investments. The company’s results say otherwise.
A meeting meant to rally senior managers to get behind the embattled CEO reportedly backfired. The scandal appears to be an unprecedented development for a JSE-listed company, and even more so for a bank. It’s one thing for your juniors to lose confidence in you, but it must be soul-crushing to be told this in front of 200 executives.
The core issue is not the teary episode with the bank’s top managers. The crux of the matter is contained in certain crucial documents. It’s not a case of a source said this or that. After the reports were published, the bank could not even claim the documents were false or inaccurate. The best it could do was cast aspersions on whether the CEO was a crybaby. “Absa refutes the portrayal of the proceedings of the high-level leadership conference. The article’s representation of proceedings is a malicious and sensational distortion of the true nature of this private event, which was an internal and constructive deliberation among the senior leadership group.”
Some leaders cry because they’re managing painful developments such as pandemics ... That’s fine. It is, in fact, encouraged. Leaders must show they too are human
Fair. Nothing stopped Absa from saying it is not true that Rautenbach tried to get the bank to pay Fox his six months’ gardening leave in a memo to the remuneration committee, which request was rejected by his juniors, who seemed to know better. It could not say it is not now seized with compliance issues relating to the CEO dropping the ball.
In any case, the issue of weepy leaders is in itself sensational. Some leaders cry because they’re managing painful developments such as pandemics. Others, such as Tedros Ghebreyesus of the World Health Organisation, weep because they are overwhelmed by emotion — for example, when he described the “hellish” situation in Gaza in January. That’s fine. It is, in fact, encouraged. Leaders must show they too are human. Authentic leaders do occasionally breakdown.
But others cry simply because they messed up. Tears of this kind are a poor attempt at manipulation. These ones cry, not because of their fragility and humanity, but merely because they got caught. They are tears of regret. Remember Hansie Cronjé, the cricket crybaby who fell from grace in the wake of the match-fixing scandal? "Oh, the Devil made me do it!" Ahem!
The tears are a sideshow. They distract us from the real issue of leaders who drop the ball. And, of course, tears don’t fix what is broken. Rautenbach’s tears seem a stratagem similar to the one used by last week’s Mampara, embattled Joburg mayor Kabelo Gwamanda, who called himself a poor “African child”. He discovered his “African child-ness” when it became clear his days as a pretender mayor were over. He’s more an overgrown “child”, if you ask me.
But society’s eyes are appropriately fixed on Absa board chair Sello Moloko. What would be his justification for keeping Rautenbach? For context, Absa let go of Daniel Mminele on a no-fault basis and paid him about R30m after the bank returned profitable results under his leadership. There was supposedly something wrong with his strategy that gave him such splendid results. He was the first black African to become group CEO. Oh, poor African child!
Absa then got its new star performer with the right strategy — Rautenbach. The results have been poor on his watch. He was stopped by the board from firing a performing black executive, Saviour Chibiya, responsible for African operations. He is now in trouble for not paying the US’s Internal Revenue Service when he allowed Fox to work on US soil without paying US tax and social security. Not quite a wrecking ball, but something close. For a banking CEO, that’s even worse.
Again, if Absa sent Mminele packing while he got results and there was no fault against him, why keep near-wrecking-ball Rautenbach? If he was black, he would have been called an embarrassment, a dud.
But perhaps the tears worked on Moloko. Or perhaps he is too busy explaining to the FBI why Absa forgot to pay amounts due to the US authorities.
At the end of the day, tears or no tears, Absa must pay attention to the message it wants to send to society. Through action or omission, the message seems loud and clear. Black people are easily dispensable (at a fee of R30m for a group CEO), and they don’t have to get anything wrong to be shown the door. But if you are Rautenbach, you can ride a wrecking ball, try to fire performing people, violate tax laws and still live to see many more opportunities after a tear or two — thanks to Moloko’s board. Must be nice, as they say on social media.
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