South African financial institutions have been slammed for their failure to prioritise succession planning, relying heavily on current personnel.
Some South African financial institutions are not prioritizing succession planning for critical roles, leaving banks and insurance companies overly dependent on current personnel, according to an industry regulator.
For some large banks, the risks increase as board members retire, leaving lenders without “ready now” successors, according to Prudential Authority. Smaller banks and insurers are losing talent to bigger rivals who can pay more for scarce skills while also grappling with rising emigration that limits their ability to retain and attract expertise, the regulator says.
“In certain instances, there was insufficient coverage of successors across the boards, executive committees and other key roles, giving rise to key person dependency,” the agency said in its annual report for 2022-23. “In addition, some of the identified successors were already occupying other senior roles or had been identified as successors for other positions.”
The report comes months after South Africa’s fourth biggest lender Nedbank said it’s searching for a successor for Chief Executive Officer Mike Brown. Smaller but more niche bank Investec is also scouting for a replacement for Richard Wainwright, head of its South African business, when he steps down in 2024.
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