ANNOUNCING the “shock” departure of then group chief executive officer Nyasha Makuvise last year, CBZ Holdings board chairman Luxon Zembe told analysts that while the group regretted his resignation, leadership was like a relay where one had to pass on the baton.
Reports by Ndamu Sandu
“He [Makuvise] has worked well, we are proud and in fact, regret that a very good runner [is leaving] but in a relay, you are allowed to run up to a certain point and handover [the baton],” Zembe said.
Makuvise had been at the helm for nine years. His successor, John Mangudya had been an understudy and was his alternate in the board.
A year earlier Livingstone Gwata had stepped down as group CEO of FBC Holdings and the baton was passed to John Mushayavanhu.
Joe Mutizwa stepped down last year after a decade as CEO of Delta with the post filled by Pearson Gowero, a product of the company’s succession planning.
Despite the leadership renewal winds blowing through the private sector, a number of companies are still stuck with the same CEO, 15 years on or more.
While the long tenures should be a preserve of parastatals where one can lead “as long as the minister wishes”, the cancer has spread to the private sector, Zimbabwe Stock Exchange (ZSE) listed companies in particular.
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Standardbusiness gives a rundown of some of chief executives of listed and state-owned entities who have been in office for 15 years and above:
- Albert Nduna, Zimre Holdings Limited’s (ZHL) group CEO (29 years).
- Mike Ndudzo, Industrial Development Corporation (IDC) general manager (22 years).
- Elisha Mushayakarara, Zimbabwe Financial Holdings outgoing group CEO (20 years).
- Anthony Mandiwanza, Dairibord group CEO (17 years).
- Sydney Mutsambiwa, Hippo (15 years).
- Hilton Macklin, Powerspeed boss (15 years).
- Pattison Sithole former starafricacorporation CEO (15 years).
It has not been all rosy for these CEOs recording mixed fortunes.
Nduna has managed to get maximum value from the ZHL asset and as a result three companies — Fidelity, NicozDiamond and Zimre Property Investments — emerged and are listed on ZSE.
Mushayakarara, who is stepping down at the end of the month, built ZB Financial Holdings into one of the biggest players in the financial services group spanning across banking, insurance, asset management and stock broking sectors.
Sithole left starafricacorporation at its lowest ebb and the results are there for everyone to see.
Phillip Chigumira was CEO for Cairns Holding for 15 years. His tenure ended when he died in 2011. Two years later, Cairns was suspended from ZSE and is currently under judicial management.
Due to the failure by companies to renew leadership, questions are being asked on the credibility of its leaders and the board.
Are chief executive officers learning fast from Zimbabwean politicians who do not believe in passing the leadership baton? Does one need 15 years to groom a successor?
CEOs must groom their successors — Analysts
Analysts say the success of a CEO can be measured by virtue of grooming a successor.
“Developing tomorrow’s talent is one of the five core roles of leadership. Boards must take CEOs to task for failing to excel in that basic role. In fact, that role should be part of a CEO’s performance scorecard,” said Brett Chulu a strategic human resources consultant.
He said that Delta breached the US$1 billion market capitalisation benchmark within a short while of Mutizwa’s departure and that Gowero was a product of the company’s succession planning.
“Douglas Mboweni came through the bowels of Econet and has led Econet Zimbabwe to greater heights since the departure of Strive Masiyiwa. There is no greater legacy for a CEO than leaving a successor who will do better and achieve greater milestones,” he said.
Human resources expert Memory Nguwi weighed in: “In international companies it [grooming a successor] is a major requirement because it’s part of risk management.” What should be the tenure of a CEO?
Nguwi told Standardbusiness that in the developed world, chief executive officers “do not last more than 10 years on average because of the rigorous performance management systems employed.
“Others have unwritten term limits where a CEO is supposed to groom a pool of successors,” Nguwi said.
Nguwi said for non-performing organisations “you can rest assured that nothing new will come out when you have such a scenario”.
Chulu said while there was no standard tenure for chief executive officers, the trend, for the past 15 years in Sadc countries such as Botswana and South Africa has been the adoption of performance-based contracts.
He said the typical performance length of these performance-based contracts was five years at the CEO level and three years at mid-management levels. Chulu said in principle, some CEOs of quasi-government institutes locally were subjected to contract renewals every five years.
The Ministry of State Enterprises and Parastatals recently issued a directive that CEOs of state owned enterprises should have performance-based contracts which has been ignored.
“If the remuneration adjustment directives from the same ministry are being defied by some as widely reported, it casts a pall on the efficacy of performance-based contracts. You can’t have a performance culture if performance is not tied to remuneration,” Chulu said.
Chulu said if the board of directors was active and independent, it was inconceivable that a non-performing CEO could last even five years.
He said an independent and well-informed board of directors was supposed to monitor the performance of a CEO against an agreed performance scorecard. Savvy boards, Chulu said, also made sure a CEO’s remuneration is tied to well-defined performance outcomes, eliminating the risk of rewarding failure.
“Without a rigorous CEO performance scorecard, vigilantly monitored by a competent board of directors, coupled with excessive guaranteed pay, CEOs will not care much about performance and will adopt a “ndinofira ipapo” [I will die in office] or only-a-bulldozer-can-move-me- from-here mentality,” he said.
