Can a black CEO colour Absa’s performance?

Arrie Rautenbach, the outgoing CEO of Absa, is set to step down in less than a week, marking the sixth CEO change at the South African lender in as many years. The leadership shake-up has reignited the debate on transformation, with proponents arguing that Absa has a chance to embrace greater inclusion following the abrupt departure of its first black CEO in 2021. However, others suggest that Absa's recent underperformance may reflect underlying issues beyond just the color of its top executive. Rautenbach's early retirement announcement caught many by surprise, including his successor, Jason Quinn, who was called in over the weekend to step into the position. Rautenbach, a seasoned banker with a 27-year tenure at the bank, took over from Daniel Menele, Absa's first black CEO, who left due to strategy misalignment with the board. Prior to Rautenbach's appointment, Absa's chair identified the need for a leader with relevant banking experience and continuity to drive the bank's strategic aspirations. Despite ticking the boxes, Absa has struggled with underperformance in recent years compared to its peers in the banking sector. The bank's share price has lagged, with concerns raised over its strategy and leadership consistency. The absorption of Absa by Barclay in 2012 brought about significant changes that impacted the bank's culture, credit criteria, and systems. The sudden departure of Rautenbach, who was pivotal in defining Absa's post-Barclays identity, has raised concerns about governance and strategy at the bank. Questions around compliance lapses and governance have also emerged, further clouding Absa's leadership stability. The debate on transformation at Absa goes beyond race, with activists highlighting gender representation at the senior leadership level. While the focus has been on appointing a black CEO, gender diversity at the executive committee level remains a crucial issue. With only three women out of 14 members in Absa's executive committee, concerns have been raised about broader inclusion in the bank's leadership. The revolving CEO door at Absa has raised questions about the board's role in selecting the right candidate. With five CEO changes in a short period, scrutiny has shifted towards the board's decision-making and succession planning. Charles Roussan, set to take over as interim CEO, has emphasized the importance of building trust with stakeholders and delivering on promises. As Absa navigates through this leadership transition, all eyes are on the bank's ability to address transformation challenges, enhance performance, and rebuild stakeholder confidence.