South Africa’s most powerful investor has lashed out at the country’s third-biggest bank for choosing a White man as its chief executive officer.
The Public Investment Corp., which manages $160 billion, expressed “downright disappointment” with the March 29 appointment of Arrie Rautenbach as CEO of Absa Group Ltd., almost a year after Daniel Mminele, the bank’s first Black CEO, quit unexpectedly.
The PIC, which mainly manages the pensions of South African government workers, said it had previously expressed dissatisfaction over Mminele’s departure, which it said created instability as he had “divergent professional views and approaches to that of the board.”
South African companies have been under pressure to appoint more Black executives since the end of apartheid in 1994 but have made limited progress. Mminele, a former deputy central bank governor, was only the third Black executive to lead one of South Africa’s four biggest banks. Of the 10 largest local companies by market value, only two currently have Black CEOs in a country where four out of five people are Black, according to data compiled by Bloomberg.
“The PIC expected that the board would have placed the required focus on transformation in the process to recruit a new CEO,” it said in a statement on Friday. “The PIC has requested an urgent meeting with the Absa board.
Absa defended the decision, saying both the executive and the board are aligned on the principle of driving transformation across all levels within the Group. It added that Rautenbach was right for the job, citing his leadership in the turnaround of the retail and business banking unit.
“The PIC is an important stakeholder not only to Absa but to the wider society,” the lender said in an emailed response to questions. “We take their concerns seriously and will continue to engage them constructively.”
The PIC, which is several times larger than its nearest South African competitor, owns 6.7% of Absa, second only to Barclays Plc, according to data compiled by Bloomberg. Absa lags behind only Standard Bank Group Ltd. and FirstRand Ltd. in terms of assets.
