I had the gut feeling that the deposed but reinstated Managing Director of Botswana Building Society (BBS) Limited Rre Pius Molefe and Head of Marketing and Communications and Company Secretary Rre Sipho Showa would successfully argue against their dismissals. This on the basis that the BBS Limited Board led by its Chairperson Mme Pelani Siwawa-Ndai appeared to be dealing with Rre Molefe and Rre Showa in bad faith underpinned by some sheer air of vindictiveness, power and authority over them. Like the quote in last week’s edition, ‘A rogue board member is on who uses their authority outside the jurisdiction of the board as a whole Often, their actions do not serve the better good of the organisation but instead are based on a personal agenda’
In my last week’s column, I wrote that ‘Good corporate governance or lack thereof at the centre of BBS standoff’. It has since emerged from the judgement of Justice Tebogo Tau though not explicitly expressed, that the decision of Mme Pelani-Siwawa-Ndai to terminate the contracts of employment of both Rre Molefe and Rre Showa is invalid. The Board Chairperson failed to comply with the very Constitution of the organisation she leads in that and according to Justice Tau, ‘….Notice was not issued in terms of Clause 75.2 of the Constitution which requires that 7 days’ notice be given to every Director who is in Botswana and that such notice must include the matters to be discussed.’ On a good corporate principle, it is unpardonable that the Board Chairperson dismally failed to comply with the said Clause. The only conclusion I can reach on this failure is bad faith and vindictiveness. The Honourable Judge says at paragraph 28 that ‘It follows therefore, that the decision which was taken during the meeting which was invalidly constituted was invalid. The resolution which was passed at that meeting was also invalid. As the decision to terminate the contracts of the Respondents stem from an invalid resolution it is automatically null and void.’ I argued last week that if the Board Chairperson felt there were valid reasons to dismiss Rre Molefe and Rre Showa, she was expected to know the procedure to do so instead of ‘cutting corners’ as it has emerged.
It is fair to question the integrity of other board members in this matter. Did any of them apply their open and sober minds to the legal opinion proffered by the lawyers of the organisation with respect to the Board decision to extend its tenure independent of the shareholders endorsement? Were they not aware of the procedure to terminate the contracts of employment of the duo? I believe the respective board members should have asked themselves these hard but pertinent questions and in the process, answered them on the basis that it is expected of them to know them and, on the legal advice so proffered by BBS Limited lawyers. There is no excuse. Some of the board members if not all of them, are Chief Executive Officers of their respective organisations in their own right whereat they are accountable to their own boards by virtue of their positions together as executive board members just like Rre Molefe. By acting in the manner they did as BBS Limited board members, it should send a chilling message to their respective organisations’ boards that their good corporate governance credentials are questionable.
Why do I say Rre Molefe and Rre Showa may have won the battle but not the war? The Justice Tau judgement has far reaching implications for the BBS Limited board members and the shareholders. The egos of the board members and all that goes with it are bruised to the point that they won’t leave the judgement unchallenged. Firstly, there is all the possibility that this judgement will be appealed as a starting point and more as a face saving measure. Or will the Board take the short route of convening a quorate meeting where a dismissal board resolution is taken? Secondly, the professional relationship between the Board and the duo should be broken down irretrievably consequent to the court victory by them such that the transaction of the BBS Limited business will inevitably, be compromised. The shareholders will be well aware that their business cannot be effectively and efficiently undertaken under the atmosphere of a broken down relationship between the Managing Director, Company Secretary and the Board. One of the two parties would have to vacate BBS Limited. The shareholders are well aware that their business suffered a massive financial loss consequent to the temporary delisting by the Botswana Stock Exchange. One of the two parties have to be held responsible for this massive financial loss. As it stands and consequent to the Justice Tau judgement, the Board is responsible owing to its reckless and unlawful decision to terminate the contracts of employment of the duo. Had it not been for this reckless and unlawful decision the shareholders will argue, their company wouldn’t have incurred the massive financial loss. I do not know if the shareholders will seek compensation for the loss from those it deems responsible.
It is almost a given that the Board will try to congregate somewhere in order to come up with a resolution to dismiss Rre Molefe and Rre Showa. One is not aware of the contract of employment clause(s) under which both of them could be dismissed. That said, there will have to be a valid reason why the Board would want to dismiss them. It has since emerged the Board wanted to dismiss them for failure to carry out what amounts to an unlawful instruction with respect to in part, the extension of the Board tenure. Whether the Board will come out with a new reason to dismiss them or will revert to the original one remains anybody’s guess.
At the end of it all, Rre Molefe and Rre Showa have scored a victory over their Board Chairperson via Justice Tau’s judgement. The battle has been won but not the war. Whether this victory is hollow and therefore bound to be short lived will be determined by the next course of action of the Board. One thing is certain: the Board has been terribly rubbed the wrong way and would do anything in its power to avenge the pain so painfully and publicly inflicted on them. In the same vein and unless the duo decide to leave, we could be awaiting a fierce battle. Will the upcoming shareholders meeting be the final arbiter to the standoff? Only time will tell as I continue to expect more drama from the unfolding BBS Limited movie. I am prepared to be persuaded otherwise as always. Judge for Yourself!
Covid-19 remains our immediate threat as it has been for the last year or so. Let us religiously wear our masks, social distance, frequently wash our hands with clean water or sanitise.
