OPINION
Beside the Mark
Truworths' CEO may finally retire - amid a duel for his job
Truworths' announcement that it has appointed not one, but two deputy CEOs to strengthen its executive team, has intrigued the market, with speculation growing there may finally soon be a successor to take over the top job from Michael Mark.
In recent years, there has been increasing agitation in analyst circles for Mark, who has been at the helm for more than 30 years, to retire. That is not to say that his contribution to the owner of Uzzi, Identity, Daniel Hechter and Naartjie is not appreciated. He is very much part of the DNA of the group. But for a company, especially one that is listed on the JSE, to continue growing and innovating, fresh blood with a fresh perspective is always welcome. And having such a long-serving CEO is considered an anomaly in the listed universe, where CEOs seldom serve terms longer than 10 years, even.
Mark, originally tipped to retire at the group’s November AGM, but asked by the board to remain on in his position, is clearly thinking about his retirement. Though he said in a statement that accompanied the announcement that the "timing of the appointment" of his successor has yet to be "decided by the board", the fact that he brought it up himself – albeit with no specific timeline – indicates that it is likely to happen sooner rather than later.
Bulking up the executive team like Truworths has done helps ensure there is depth to the board when it comes to any succession planning. And considering either Sarah Proudfoot or Emanuel "Mannie" Cristaudo, who take up their new positions as joint deputy CEOs from 1 October, as potential successors to Mark, is not a leap of logic.
The company itself noted in announcing the two deputy CEOs that, while Mark is expected to remain in his position as group CEO post the AGM, he would be "handing over an increasing number of operational responsibilities to Sarah and Mannie and the executive team".
The two of them also have a wealth of insider knowledge, having held key positions within the group in recent years. Cristaudo, himself, in separate stints at Truworths, has a career there dating back 25 years. He currently holds the COO and CFO jobs. Proudfoot has been MD of Truworths since 2021, after serving as the group’s director of ladieswear merchandise since 2016.
This should stand them both in good stead for the top job, as an insider as CEO is generally preferable to any outsider. Understanding the culture will help make the transfer of power seamless. Very successful retailers such as Shoprite have also looked within when it came to selecting new CEOs, the benefits of which have been seen in strong results.
Having joint CEOs or a deputy CEO seldom works as a long-term solution for listed companies. So, it is likely that Truworths may be considering either Proudfoot or Cristaudo for the top position.
The only question is which of the two will it be.
Ascendis Health CFO signs off
Solid entry
Ascendis Health is not a company famous for being the first to introduce memes into its corporate results presentations in a bid to take a bite out of a tense atmosphere. Instead, it's known for its share price crash, debt crisis, shareholder revolts, surprise board shakeups, and being on constantly on the brink of business rescue. One wonders how many high-achieving people are somewhat worried about its name on their CVs.
Outgoing CFO Cheryl-Jane Kujenga, known as CJ, has just signed off on the firm's 2022 results - which include warnings about possibly not being able to pay back lenders in November - but it's also possible the next report could give details about its net cash pile.
Despite ructions behind the scenes and brain-melting (for non-CFA's) financial reports, she appears to be exiting with a glowing reputation. Even dissident shareholders, when they were just dissident shareholders and not directors or board chairs, only had nice things to say about her. This includes new acting CEO Carl Neethling, who is now picking up her job, at least for now, as he looks to earn his R1 a month. (Neethling may get a performance-based incentive later.) Describing Kujenga to shareholders on Wednesday as a "mother hen to the staff, and an iron lady to the board", Neethling at least seems to think she's headed for bigger and better things, and Ascendis, possibly, is too.
Ascendis is now a fraction of the size it was when she began her role in December 2020. CJ, a former CFO at Adcorp, also fell into the role of acting CEO at Ascendis from February until earlier this month. The company, which at times couldn't sell its best businesses fast enough, is now too small for her, and its head office costs are too big for them. Head office costs in 2022 came in at about a fifth of its R475 million.
Although Ascendis is also known for capitalising words in SENS announcements it wants to emphasise, its praise of her didn't seem hyperbolic, and its clear they are impressed by her all-round ability to be the bigger person.
Accountant shenanigans
Back to boring for the Auditor-General's office, hopefully
The office of the Auditor-General South Africa has fired its head of human resources and in a statement on Thursday said it hopes the move brings a "very painful process" to an end. The saga is ending not with a whimper but with a bombshell: Not only did Mlungisi Mabaso try to blackmail Auditor-General Tsakani Maluleke, but the disciplinary process against him revealed shockers from his past. He lied on his CV: he wasn’t employed by the Swiss company Bühler Group from 2010 to 2016 – in fact he was the head of human capital for the engineering group Aurecon Africa and Middle East for at least half of that time. Even more disturbing, Aurecon launched a criminal case against him, and had instituted a claim for damages in the Labour Court.
This is an alarming indictment of the highest public accounting office in the land. How could such a crucial position be filled without basic background checking? A cursory enquiry to Bühler would have confirmed a discrepancy in Mabaso’s employment period – which would have set off alarm bells, and prevented the appointment of someone who would cause immense upheaval and reputational risk.
To be clear, Maluleke – a shining light in the public sector – emerges from the crisis largely unscathed. A legal opinion into Mabaso’s eight allegations against her cleared her completely in six of the instances, while there were minor issues with two findings related to interest payments to her predecessor and an appointment that did not meet a legal requirement. Still, reading through the opinion does leave one with the impression that more could have been done to tighten processes and get procedural clarity.
For it to crack the whip efficiently, the Auditor-General’s office must be immaculate. It must be held up to the most intense scrutiny. It can ill afford sensational headlines, and the hope is that after this dramatic chapter it’s back to more comfortable terrain for auditors: being boring.
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