Sunday, September 26, 2021

BPOPF – who is fooling who?

Weeks after firing its Chief Executive Officer, Ephraim Letebele, the Botswana Public Officers Pension Fund (BPOPF) is looking for a replacement less qualified by its own standards. The deadline for the post, which was advertised internally, fell on Friday.

In 2007, a human resources consultancy, called EOH Consulting, drew up the CEO job profile which specified that the right person must have a degree in commerce, economics or finance plus membership of an internationally recognised institution of professional accountants, like ACCA, CIMA and CIS.

In terms of relevant experience, the CEO had to have 10 years pensions experience. With regard to the category of “superior operating skills and financial acumen”, the right candidate is supposed to have technical/professional expertise in pension administration and investment management and business awareness of current regulatory practices and policies in the pensions area.

However, in the internal vacancy advertisment for the CEO position, the bar has been set lower than what EOH Consulting (which was reportedly paid around P2 million pula to develop the job profiles) recommended. This advert says that candidates must have the said type of degrees “or relevant discipline, and/or an internationally recognised professional qualification of a recognised institution.” A source says that “relevant discipline” broadens the field to such extent that candidates with little knowledge of finance would qualify. EOH was also specific about the right person being a member of an internationally recognised institution of professional accountants like ACCA, CIMA and CIS. Conversely, the internal ad is not as precise about the professional qualification.

In terms of EOH specifications, the CEO should be someone with a minimum 10 years pensions experience. On the other hand, the BPOPF ad calls for “a minimum 10 years pensions or related experience.”

This variation has set off a torrent of speculation among some that the internal ad has been tailor-made (someone says “cooked”) for a particular individual who does not have the right qualifications but wants to be CEO. A source familiar with BPOPF operations says that this is the first time that EOH’s job profiles, which were approved by the Board of Trustees, have been so explicitly altered since the Fund started using them five years ago. A trustee says that the irony of it all is that this alteration has discouraged those who qualify to apply because it is clear to them that the target is someone who is not qualified.

Pensions management is a highly specialised area of high finance and EOH’s job profile for BPOPF CEO reflects this fact. Among the principal accountabilities of the BPOPF CEO set out in the job profile are the following: “direct and lead the development and implementation of the Fund’s strategic plan, and monitor and control implementation thereof in order to achieve the Fund’s mandate, vision and mission; support operations and administration of the board by advising trustees and giving professional advice, interacting between trustees and staff and supporting the board’s governance role; ensuring effective investment management, managing risk and maximising the growth of the Fund’s assets; and , ensure evaluation of national and international market trends to facilitate and timeously adjust investment policies to ensure maximum return on investment.”

The trustee source says that it is going to be extremely difficult for a CEO with no strong background in finance to give professional advice and ensure effective investment management when s/he has no professional qualification in that field.

To their credit though, those who varied the job profile copied out the key performance areas” segment in the exact form EOH crafted it. It comprises of strategic focus, effective investment management, financial resource management, human capital management and stakeholder management. That notwithstanding, the source points out that all those areas should be undergirded by deep understanding of finance and the requisite palette of experience. The former CEO, Letebele, is an economist.

At this point in time, those who might have shed light on this issue, in the acting CEO, Lesedi Moakofhi, and the chairman of the Board of Trustees, Rapula Okaile, are away in London where they are said to be “checking up on” the Fund’s asset managers. From London, they will go to New York for similar purpose.

The 10-day trip itself is not without controversy. Sunday Standard has been made to understand that when these trips would be undertaken under Letebele’s administration, only the CEO and the investment committee would go. In addition to Moakofhi and Okaile, the London delegation includes all chairpersons of the five sub-committees (Audit, Investment, Benefits, Human Resources and Communications) as well as the in-house investment manager. This is reportedly the first time that a group this large has gone overseas to meet asset managers. Under Letebele, these trips are said to have been made at two-year intervals and the last such trip was undertaken last October. A source says that it is too soon to be making another trip, especially that the cost of overseas travel is prohibitive. The delegation is flying business class and the total cost of the trip (which includes per diem) is estimated to be close to P1 million. There is also concern that duties performed during these trips fall outside the mandate of non-investment committee members. Citing one example, the trustee source says that the chairperson of the communications committee, a village headman from Tswapong, stands to benefit nothing from a trip that will be dealing not with matters of communication but high finance all the way through.

Normally ensconced a safe distance from bad spotlight, BPOPF finds itself the subject of controversial focus after it fired Letebele and suspended two other employees. Of the latter, one is back at work while the other, Musa Nleya, who is the legal services manager, has brought an urgent application before the Gaborone Industrial Court alleging unfairness on the part of his employer.
Speculation has been rife in the press that the misfortune that befell the trio might have something to do with an asset consultancy contract that was recently awarded to a South African company called Novare Actuaries over Alexander Forbes Asset Consulting. This happened despite the fact that the latter scored higher marks than Novare during the tender evaluation stage. The powers-that-be allegedly overruled BPOPF’s executive management who preferred Alexander Forbes Asset Consulting for the reason that it was the best performer.

Sunday Standard learns that some trustees are not happy with this decision and one from a disciplined forces institution wrote a letter to distance himself from this decision. He did this to prevent having to assume personal liability in the event the Board is found culpable and its members sued in their individual capacity. The Companies Act makes provision for this sort of legal action.
A tender awarded under this set of circumstances usually prompts the party that lost unfairly to approach the courts to seek recourse. However, in this particular case there is a complication because even if a hand feeds you a morsel, it is still good policy to not bite it. It so happens that a sister company to Alexander Forbes Asset Consulting called Alexander Forbes Financial Services, is still BPOPF’s fund administrator. Burning bridges would clearly not be in its best interests of the group.

The largest pension fund in the country, BPOPF, is valued at around P34 billion.

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