• Wednesday, February 28, 2024
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BusinessDay

Sim Tshabalala: Standard’s first black CEO

When asked how his first year at the helm of Standard Bank, Africa’s largest, has been, Sim Tshabalala’s initial instinct is to delve into the bank’s financials.

In typical banker-speak, he talks of the target of getting return-on-equity from 14 per cent to between 15 per cent and 18 per cent by 2016, while saying there is “momentum in the execution of strategy”. It is only when asked directly about his personal experiences that the jargon disappears to be replaced with a refreshingly candid description of the pressures the chief executive post has brought with it.

“It does take some getting used to,” he says. “The buck stops with you.”

There is a smile as he speaks and he is quick to add that his is a “fantastic” role. But he is acutely aware of the responsibility that goes with running the 153-year-old bank, which boasts assets of about $166bn.

“There’s a lot of scrutiny and in that you’ve got to learn to accept the comments and criticisms and not take them personally,” Mr Tshabalala says. “It feels like you’re a steward and you’re standing on the shoulders of the great men that have come before you. But the pressure is huge because you’ve got an obligation to nurture and leave this thing in better shape than you found it.”

Given the circumstances, such sentiments are not so surprising. When Mr Tshabalala was appointed in March 2013, he replaced Jacko Maree, who was stepping down after more than 13 years in the post and who is often described as the doyen of South African banking.

Other factors merely increased the level of scrutiny. In replacing Mr Maree, Standard took the unusual decision of naming joint chief executives: Mr Tshabalala shares the role with Ben Kruger.

Both men have long experience at the bank: Mr Tshabalala had been head of the group’s South Africa operations, while Mr Kruger had led corporate and investment banking. But by appointing both rather than choosing a single candidate, the group, which is 20 per cent owned by China’s ICBC, raised eyebrows.

sim-tshabalala
Sim Tshabalala

In addition, Mr Tshabalala stands out as being Standard’s first black chief executive, and only the second among South Africa’s dominant big four banks, following on from Sizwe Nxasana, the CEO of FirstRand.

The affable and youthful looking 47 year old has been at Standard Bank since 2000. But race and the racial transformation of an economy still dominated by minority whites remains a highly sensitive issue 20 years after the first democratic election marked the end of apartheid. It is not something Mr Tshabalala shirks away from. Rather, he confronts the complexities that face South Africa as it continues to grapple with the challenges of rolling back the legacies of decades of oppressive discrimination and segregation. In the measured, steady tone he employs throughout the interview, he acknowledges that the “top echelons” of Standard Bank “reflect the history of apartheid”.

In other words, most of the bank’s senior executives are white.

“It’s complicated isn’t it?” Mr Tshabalala says. “It’s just where we come from. They reflect the distribution of knowledge, skill and talent, with emphasis on skill because of the history of our education system.”

It is a South Africa-wide issue. Whites represent about 11 per cent of the country’s economically active population but fill 63 per cent of top management positions, while majority blacks account for just 20 per cent of the posts, according to the government’s Commission for Employment Equity.

In part, the slow pace of transformation can be blamed on the legacy of a highly discriminatory education system – known as Bantu education – implemented under apartheid. But the corporate sector is also at times accused of dragging its feet on the issue. “The pace of transformation is not fast enough, but I don’t think that there’s an accelerator button you press,” Mr Tshabalala says. “There has to be a systematic process of making sure that we’re producing people with maths and literacy skills; that universities are producing the right talent.”

His own rise to the top is an example of black South Africans of his generation having to overcome numerous hurdles to succeed. The eldest of three children, Mr Tshabalala grew up in Soweto, the sprawling Johannesburg township that was at the heart of urban black culture, politics and activism during apartheid.

His father ran a fried chicken outlet and his parents scraped together the money to send their eldest son to a Roman Catholic school outside the township, where he was one of only a handful of black pupils.

At the time, South Africa was enduring one of its most tumultuous periods as the apartheid regime desperately sought to cling to power in the face of rising protests. Reflecting on those years, Mr Tshabalala says: “I suppose I’ve spent a large chunk of my life being an outsider, and living in conflict. In the 1980s, you can imagine, the country was aflame,” he says. “You’d get to school, and you were an outsider, because you’re a black kid amongst white kids, and . . . then at home, in Soweto, being an outsider, because you were going to school in the suburbs.”

From school he made it to Rhodes University where he earned a law degree, becoming the first in his family to graduate from university. He later gained a masters from the University of Notre Dame, Indiana.

But after a few years at a law firm he decided he was not cut out for the lawyer’s life. His country was rapidly changing and in 1994 – the year South Africa finally made the historic transition to democracy – he entered the financial world by joining Real Africa Durolink, a financial services boutique. Six years later he was recruited by Standard Bank, where he headed up structured finance.

An unabashed optimist on South Africa and Africa, he and Mr Kruger now have the responsibility of completing the bank’s refocus back to its fast-growing home continent as Standard has streamlined its international operations.

“The broad drivers of change and development [in Africa] – they’re all headed in the right direction,” Mr Tshabalala says. “There will be blips from time to time, but they’re all headed in the right direction.”

He and Mr Kruger have divided their responsibilities, with heads of international operations reporting to the latter, and heads of Africa units reporting to Mr Tshabalala. The pair work closely – literally. In the bank’s swanky, new glass-fronted office in Johannesburg’s Rosebank suburb, they sit opposite each other on plain, wood-veneered desks that replicate the open-plan character of the building. At its older, more traditional HQ in the city’s downtown area, their offices are linked by a dividing door and the two clearly get on.

“We’ve got similar values and similar cultural backgrounds even though he’s an Afrikaans man and I’m a Zulu man,” Mr Tshabalala says. “For me, we represent everything that is beautiful and positive about South Africa and the African continent.”

And while schmoozing among the corporate and political elite of Africa’s most developed economy, he retains links to Soweto, where his parents still live.

So does he still feel like an outsider? “I’m an insider-outsider,” he says with a chuckle.

(Culled from FT)