Standard Bank CEO Jacko Maree. Picture: FINANCIAL MAIL
Standard Bank CEO Jacko Maree. Picture: FINANCIAL MAIL

IT SHOULD not be a shock to the market if banking CEOs Jacko Maree, Stephen Koseff and even Michael Jordaan decide to step down from their roles in the near future, judging by the years they have spent in their respective positions.

Mr Maree and Mr Koseff have been CEOs of Standard Bank and Investec for 13 and 15 years, respectively. They have both contributed immensely to the growth of their businesses.

Mr Jordaan has been CEO of FNB for nine years, and under his tenure FNB has been named a top innovative bank globally.

Leon Kirkinis of African Bank Investments, South Africa’s largest unsecured lender, has been at the helm since 1997. He helped to start the bank with Gordon Schachat.

His rival in unsecured lending, Capitec CEO Riaan Stassen, has been CEO since 2004.

Although there is no prescribed period for how long banking CEOs should stay in their posts, these executives undoubtedly have served their banks for a while.

Is it wrong for a bank’s CEO to serve for more than a decade?

For Nigeria’s Sanusi Lamido Sanusi, who was named the central bank governor of the year in 2011 by The Banker, an industry magazine, this is too long.

Two years ago, Mr Sanusi limited the tenure for Nigeria’s banking CEOs to 10 years to prevent a banking crisis in that country.

However, South Africa is not Nigeria.

South Africa’s banking sector is far more competitive and not a single bank needed a bail-out in the 2008-09 financial crisis.

The 2012-13 World Economic Forum Global Competitiveness Report ranked South Africa’s banking sector second for its soundness.

"The Banks Act 1990 does not prescribe the tenure of bank CEO’s. This resides in the domain of the banking institution, its board and shareholders," says the Reserve Bank’s head of group communications, Hlengani Mathebula.

Tom Wixley, a corporate governance expert, concurs, saying that the tenure of a CEO depends on the "individual company and its needs".

Prof Mervyn King, author of the pioneering King codes of corporate governance, says: "You can’t lay down a time period. It depends on the circumstances of each executive. Each company has to weigh up the special circumstances in existence at that moment and make a decision in the business interest of the company about the continuation of the CEO."

FNB, which had to reiterate last week that Mr Jordaan remained CEO amid talk of his planned departure, said when asked what the circumstances were that kept him going as CEO, said: "FNB doesn’t have a set timeline for its CEO’s tenure. These have varied from CEO to CEO over the years. In the instance of Dr Jordaan, it’s his passion for innovation and his vision of building a great company. He loves his job and is proud to be the CEO of the most innovative bank in the world."

In reply to the same question Nedbank, which appointed its CEO in 2010, said: "Nedbank wants to build Africa’s most admired bank — by staff, clients, shareholders, regulators and communities. Quite simply Mike (Brown) enjoys the challenges of his job that allow him to grow and develop as a leader and he is motivated by the culture of Nedbank, the people he works with and the desire to leave behind a sustainably better Nedbank than the one he inherited.

"He enjoys what he does and the people he works with together with a strong desire to help Nedbank achieve her vision of building Africa’s most admired bank and in so doing contribute meaningfully to the development of our staff, the success of our clients, the wealth of our shareholders and the wellbeing and financial services needs of our communities."

Nedbank agrees with corporate governance experts that the CEO role should be determined by the needs of the organisation and the ability to continue making a positive contribution to the bank.

Asked what the advantages and disadvantages of a long-serving CEO were, Nedbank said: "The continuity and stability that comes with a longer tenure allows for the implementation of longer-term strategies and allows for delivery to be measured through economic cycles. Depending on the individual CEO and culture of the organisation, a disadvantage could be a lack of new ideas and a loss of talent who aspire to the CEO role."

Some banks regard executives who were part of the team that started the bank, as different from those who joined later.

"Riaan was part of the team of architects that created Capitec Bank. It is thus different from someone that comes and tries to build or maintain someone else’s dream," says Capitec spokesman Charl Nel.

"Secondly, Capitec Bank has a close-knit management team and middle management team that have been working together for years, not only at Capitec, but also at previous firms in the financial and liquor industries.

"To lose any insights gathered through years of experience by any member would not be in the interest of our business."

Another argument could be that if the likes of Mr Koseff had left Investec after 10 years, the bank would have been hammered by the 2008 financial crisis.