Monday Bruise: Who's chairing Bidvest?

Monday Bruise: Who's chairing Bidvest?

2005-10-24 07:39

BLACK economic empowerment icon Cyril Ramaphosa has not exactly been diligent (or enthusiastic) about attending board meetings at industrial services powerhouse, Bidvest.

Last year in June, Ramaphosa was appointed non-executive chairperson at Bidvest - a move welcomed by the market as it finally split the functions of chairperson and CEO at the group.

Bidvest founder and dealmaking genius Brian Joffe (now CEO) had previously enjoyed a dual role as both executive chairperson and CEO - a leadership structure that flaunted recommendations contained in the King II report on corporate governance.

The role of a non-executive chairperson is a critical one, and a high calibre businessman like Ramaphosa seemed an inspired choice at Bidvest.

Certainly Ramaphosa - a seasoned politician and former labour movement leader - should have the guts (and acumen) to stand up and be counted in the board room.

Not only would Ramaphosa be overseeing key transformation issues at Bidvest, but also - as a member of the Dinatla consortium - ensuring that mutual benefits arise from recent empowerment efforts.

Just one meeting

In fact Bidvest published the following at the time of Ramaphosa's appointment to the chair: "Mr Cyril Ramaphosa's extensive experience in South African civil society and the business sector will add significant value to the Bidvest board of directors.

"His appointment adds further impetus to Bidvest's successful black economic empowerment strategy and will formalise and entrench a long-standing relationship between Mr Ramaphosa and Bidvest."

In this light it's a tad worrying that an attendance register for board meetings in Bidvest's latest annual report shows Ramaphosa attending just one board meeting in the year to end June 30 2005.

The annual report does note that "certain directors were not able to attend all meetings as meeting dates were changed at short notice".

Fair enough. But attending one of five board meetings at Bidvest is simply not good enough for a non-executive chairperson of one of SA's biggest conglomerates.

If Ramaphosa - whose other directorships include MTN, Johnnic, Standard Bank, MacSteel, Alexander Forbes and SABMiller - is finding his schedule too arduous to accommodate a few changes to board meetings then can he really add value and serve shareholders at Bidvest?

Paid R360 000 for 'services'

Board meetings are after all very important. Business proposals, policy decisions and strategy all have to be discussed by the board, not to mention the odd instance when a disaffected voice is heard.

Some observers may also find it ridiculous that Ramaphosa was paid R360 000 for his "services" as non-executive chairperson.

That's more than double the fees earned by Ramaphosa's fellow non-executives like Joe Pamensky (who must be breathing easier after the LeisureNet court rulings last week), Doug Band and Donald Masson.

Interestingly Masson (who serves on the boards of Cashbuild, Faritec and Pamodzi) and Pamensky (Stonehenge Financial Services, Enviroserv, Schindler Lifts and Worldwide African Investments) managed to attend all five Bidvest board meetings, while Band (Standard bank, Supersport, Tiger Brands and MTN) attended three.

Investec's Stephen Koseff managed two board meetings.

An important question around corporate governance at Bidvest is who chaired the meetings in Ramaphosa's absence? Last year Bidvest discontinued the role of deputy chairperson when Fani Titi stepped down to concentrate on building the Tiso empowerment business.

Degree of risk

Shareholder activist Theo Botha asks whether that means the Bidvest board meetings were chaired by Joffe. That would reinforce the old board structure with Joffe effectively serving as chairperson and CEO.

With the LeisureNet debacle once again raised in the public consciousness Ramaphosa's role as an effective non-executive becomes all the more important.

I am not disputing the argument that Bidvest is the most inspired company on the local corporate landscape. And I am not saying there is any degree of risk for corporate shenanigans at Bidvest.

Joffe, after all, says in the latest annual report that "corporate governance is a way of life and merely a set of rules". Surely he's not just paying lip service?

But LeisureNet - and Joffe can ask fellow board member Pamensky for a first hand account - showed just what can happen when ineffectual non-executive directors don't keep a rein on the dynamic (read: head strong) and entrepreneurial (read: prone to risk taking) founders of a business.

If Ramaphosa is finding it difficult to occupy the hot seat at Bidvest, he should make way for an executive with the time to look out for shareholders.