On Rational Radio this week, forthright money manager Piet Viljoen of RECM opined that the fragmentation of ownership in public companies and shareholder complacency can be destructive. This lack of accountability encourages some public company managers to run businesses to suit themselves – and their corporate political agendas.
I saw this during my short spell in banking where, appointed on recruitment to the executive committee because of the perceived importance of the role, a few months later that ended when Exco was trimmed from a baker’s dozen to half that. I left a few months later after another political machination: although clueless about my work, the new Exco successfully lobbied to insert one of them into my reporting line to the CEO.
Such politically-instigated reporting lines are commonplace. Like the managerial structure at Discovery’s UK operation, Vitality. In a geography where executive salaries could feed a village back home, Discovery has split its UK business between two CEOs – Neville Koopowitz running VitalityHealth and Herschel Mayers VitalityLife.
At its AGM yesterday, the group announced that the roles have now been combined into the responsibility of a single CEO. Koopowitz will run the combined operation creating “a single point of accountability”. Reason: Mayers is stepping down from all his executive roles “after a period of medical leave.” Proves Viljoen’s point, doesn’t it?
