Wednesday, May 29, 2024

BIHL chief executive officer’s post still vacant …post could be delocalized as citizens develop cold feet

Botswana Insurance Holdings Limited (BIHL) has not yet filled the post of chief executive officer four months after the departure of Regina Sikalesele-Vaka.

Indications also abound that the post could be delocalized as citizens who had initially shown interest have since developed cold feet in taking up the position.

Following Vaka’s departure, the Botswana Stock Exchange-listed company advertised the post and Sunday Standard is reliable informed that the post could be delocalized as most citizens who had applied are not eager to accept the job.

Investigations turned up by this newspaper are that the blue chip company had identified a citizen banker who is managing director of one of the local commercial banks to take up the post.

The candidate who had been identified had since reneged on his initial intention to join the group leading to speculation that the board could be forced to look outside the country for Vaka’s replacement.

Approached for comment, the banker said the matter is between two people (employer and potential candidate) adding that he has a long road that he wanted to walk with his current employer.

Asked whether he had applied for the job, he simply said that whether he had applied or not is immaterial.

“I still remain employed with my current employer. What you are telling me is not a fact. There is no truth. I want to make my mark with the bank. There are a lot of people out there who can take job”, said the banker.

However, there are indications that locals could be developing cold feet in taking up the post on the back of Vaka’s onslaught against BIHL at the time of her departure.

Vaka’s departure from the plum post was unceremonious as she felt hard done by BIHL’s majority shareholder, Sanlam, which owns 53 percent of the company.

In a no blows barred speech at her farewell party, Vaka did not mince her words in expressing disappointment at the way in which the company was run and how Sanlam overshadowed the BIHL board.

She added that with her views opposed to those of Sanlam, she was once invited by Sanlam representatives to remove herself from her job as it was clear that she did not support their vision and that at the time she declined the invitation because she believed herself to be employed by BIHL and that the blue chip mother company needed her to work for it.

“My corporate journey continued to BIHL where I quickly learnt that Sanlam, like any majority shareholder, have views of their investment in BIHL. What was vastly different was the manner in which the views were expressed and how they were managed by the board. Over the years, I was locked in some very provoking philosophical debates with Sanlam representatives regarding their strategies,” she said.

Vaka’s complaints included, among others, issues surrounding capital management as she decried that the Sanlam strategy was to manage capital in the Sanlam Group from Cape Town with capital in the subsidiaries being distributed to shareholders.

“BIHL has accumulated excess capital in the region of P1 billion and, in light of this, Sanlam requirement the BIHL board has approved the systematic release of excess liquidity by declaring special dividends. This fulfils the immediate gain to all shareholders but in my view it is not consistent with building a sustainable company,” lamented Vaka.

She maintained that the removal of capital would weaken the balance sheet of BIHL and ultimately weaken it as a company, particularly that once the money was removed from BIHL, it was not easy to get it back from the shareholders for future opportunities if there was a requirement to do so.

Her other gripe was that as a responsible corporate citizen, BIHL should participate in stimulating the economic growth of Botswana instead of releasing capital for the development of other economies, especially that the profits were derived from Botswana citizens.

She maintained that BIHL was highly concentrated in the Botswana market and should therefore implement strategies that ensured growth of the BIHL group instead of focusing on short term gains given that BIHL’s contribution to the Sanlam Developing Markets was significant and ought to be treated as a serious partner with appropriate rights instead of the proverbial “cash cow”.

Vaka also bemoaned that Sanlam did not allow its subsidiaries to expand into the rest of Africa as it (BIHL) would be in direct competition with Sanlam and, as such, expansions would be done by Sanlam through appropriate partnerships to prevent leakage to minorities.

“Sanlam gave BIHL an undertaking to establish a vehicle for regional expansion in 2008, but despite that, Salam has expanded into Malawi, Uganda, Nigeria and has plans to expand into several other countries in Africa,” said Vaka.

She said that given the market dominance of the main subsidiaries of BIHL, Bifm and Botswana Life, a restriction to expand outside Botswana greatly curtailed future growth opportunities and had a negative impact on the sustainability of the BIHL group which had already expanded into Zambia long before Sanlam acquired it.

“It is my view that BIHL is being used to fund the Sanlam African strategy at its own expense and to this I object. In a couple of years, Sanlam will have entered most potential markets in Africa thereby relegating BIHL to Botswana forever. Whilst the Sanlam expansion is gaining momentum, the BIHL board has directed management to focus on setting up a Greenfield short term insurance and unit Trusts both of which BIHL has no skills. These new subsidiaries will have limited overall impact on future growth,” said Vaka.

It is the views that were expressed by Vaka that appear to be cowering citizens from succeeding her given the limited expansion scope of the company as espoused by the majority shareholder.

BIHL board chairperson, Batsho Dambe-Groth, said the appointment process of a substantive group chief executive officer is ongoing.

“It would not be professional for the BIHL Group to comment on any specific individual but it is confident that they are capable Batswana from which a suitable candidate can be identified to take up the role,” said Dambe-Groth. “Further, although the process has taken a while, an announcement will be made at the appropriate time.”


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