UNDICTATED: Behind Nedbank’s CEO-securing raid for ABSA’s Mighty Quinn

This episode of UNDICTATED features an interview with Nedbank’s chairman, Daniel Mminele, about the notable appointment of a competitor bank’s esteemed professional as Nedbank’s new chief executive, succeeding the iconic Mike Brown. We aim to uncover the rationale behind this decision. Currently, Jason Quinn is 49 and serves as ABSA’s financial director. He was their interim CEO for about a year until March 2022. When ABSA chose Arrie Rautenbach as CEO, Quinn remained with the bank. His high regard within ABSA, which he joined in 2008, is well-known, and he also worked closely with Mminele when Nedbank’s relatively freshly minted head of the directorate was ABSA Group CEO. Mminele discussed this and other issues with BizNews editor Alec Hogg.

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Relevant timestamps from the interview

00:08 – Introductions
02:19 – Daniel Mminele on the appointment Jason Quinn from ABSA to Nedbank
03:43 – What gave Jason Quinn the edge
05:50 – The importance of succession planning
07:37 – How to ensure that ambitious people like Jason Quinn don’t depart
09:04 – His background at Reserve Bank
10:31 – The Nedbank share price
14:35 – How will a Mminele/Quinn partnership drive Nedbank into the future
15:41 – Remembering Mike Brown’s time as CEO
19:25 – Conclusions

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An edited transcript of Alec Hogg’s interview with Nedbank chairman Daniel Mminele

Alec Hogg: Reflecting on my time on ABSA’s executive committee two decades ago, I understand the internal dynamics of banking. Daniel, by recruiting Quinn, a standout figure from ABSA, to Nedbank, you’ve made a significant move in the banking sector. Given your recent brief tenure as CEO at ABSA, some might view this as retribution.

Daniel Mminele: None of that, Alec, and thank you for having me on your program. Regarding the appointment, I must acknowledge the responsibility that comes with my role. However, it’s crucial to note that this was a collective board decision guided by well-defined criteria for the ideal candidate. Jason Quinn’s selection as the top choice was facilitated by a reputable international search firm, which followed our detailed CEO success profile. This rigorous and disciplined process led to Quinn being chosen over other external and internal candidates, dismissing any notion of a strategic raid.

Alec Hogg: Knowing people in ABSA, I know Quinn’s high regard within the organisation. From Nedbank’s perspective, what made him the preferred choice?

Daniel Mminele: Quinn’s exceptional reputation inside and outside ABSA and his proven track record in South Africa and other regions made him a standout candidate. His skills, experience, and alignment with our strategic goals and cultural values were crucial. It was imperative that the CEO candidate resonates with Nedbank’s values and positive culture, and Quinn’s values and motivations aligned well with ours.

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Alec Hogg: Nedbank has a history of appointing external candidates as CEO. Given your recent appointment as chairman, how do you perceive Nedbank’s approach to succession planning?

Daniel Mminele: Nedbank has a commendable record in succession planning and management. Recent appointments to our Executive Committee have predominantly been internal promotions, demonstrating our ability to develop talent internally. However, it’s also important to benchmark internal candidates against external talent, ensuring a comprehensive assessment. The selection of an external candidate like Quinn does not detract from the quality of our internal candidates, as evidenced by our strong lineup of internal and external contenders on the shortlist.

Alec Hogg: Discussing the future of Nedbank’s internal candidates, I wonder what becomes of them with Jason Quinn, at 49, likely set for a lengthy tenure akin to his predecessor, Mike Brown. This could mean a pause or end to their aspirations for the CEO role, which might lead to their departure from the company. Is there a strategy to prevent this?

Daniel Mminele: Alec, first and foremost, the board has recognised these individuals as highly competent and valued members of the Nedbank family and Executive Committee. When the board’s decision was communicated, there was some initial disappointment among them, especially as no internal or transformation candidate was chosen. However, the executive committee supported the board’s decision and a willingness to welcome and work with Jason Quinn. They currently hold significant roles within the bank and are expected to continue with their usual commitment and dedication.

Alec Hogg: Reflecting on your extensive experience at the Reserve Bank and ABSA, did you interact with Jason Quinn? This would be relevant now as you prepare to work closely with him at Nedbank.

Daniel Mminele: Yes, I know Jason Quinn well from our time at ABSA, where I was the Group CEO, and he was the Group Financial Director. Our roles naturally led to a close working relationship. Besides the crucial relationship between a board chair and a chief executive, the connection between a chief executive and a group financial director is significant, especially when the latter is also an executive director of the bank. Our prior collaboration has established a solid foundation for our upcoming professional interaction at Nedbank.

Alec Hogg: Considering shareholder interests, Nedbank’s share price hasn’t changed in a decade. As of November 2013, it was 213 Rand per share, which remains the same today. Will improving this be part of Jason Quinn’s key performance areas?

Daniel Mminele: Our strategic priorities encompass continuity and change, Alec. Jason Quinn’s role will involve various aspects, including managing and optimizing our balance sheet, improving positioning and returns, especially in retail banking, and leveraging recent technology infrastructure investments. Additionally, there are areas requiring significant shifts, such as digitisation, technology-led solutions, talent attraction and retention, organisational agility, entrepreneurial approaches, and articulating our Sub-Saharan Africa strategy for growth. While share price fluctuations over the past decade reflect various factors, they don’t necessarily indicate stagnation within the bank.

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Alec Hogg: While Nedbank’s balance sheet and size have grown over the last decade, its share price hasn’t, perplexing investors. International investors often focus more on the situation in South Africa before considering the bank itself. Is this still the case?

Daniel Mminele: Indeed, the banking industry is deeply intertwined with macroeconomic conditions, making it natural for people to evaluate a bank’s prospects within the country’s economic environment. This approach hasn’t changed significantly over time.

Alec Hogg: Considering the future of Nedbank under the Mminele-Quinn leadership, investors generally prioritise trust and stability over dramatic changes in banking. Are you planning to maintain this stability, or do you have more ambitious changes in mind?

Daniel Mminele: Given our complex and rapidly changing operating environment, we must adapt our strategies continuously. While stability in leadership and operations is essential, we must remain agile and responsive to the fast-evolving industry. This balance is critical to staying relevant and successful.

Alec Hogg: With Mike Brown’s impressive 14-year tenure as CEO nearing its end, are there plans for a significant farewell?

Daniel Mminele: Mike Brown has been an exceptional leader for Nedbank, with numerous achievements and accolades. He isn’t leaving yet, so we’re not at the point of a formal farewell. There will be many opportunities to honour his legacy over the coming period. He will remain until Jason Quinn formally assumes the CEO role and will assist in ensuring a smooth transition. We’ll celebrate Mike’s substantial contributions and the strong foundation he’s set for Jason and the team to build upon.

Alec Hogg: When is Jason Quinn expected to join Nedbank?

Daniel Mminele: Jason Quinn has just resigned from ABSA and is serving a six-month notice period, so he’s still with ABSA for the next six months. After this period, he will join Nedbank as Chief Executive Designate. Following our AGM on the 31st of May, Mike Brown will step down, and Jason will then assume the role of Chief Executive. Mike will be available for a while after that to ensure a smooth handover.

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Alec Hogg: This transition process at Nedbank contrasts with the immediate changeover at Naspers, South Africa’s largest company by market cap. Does this difference reflect something about the companies or the industries you operate in?

Daniel Mminele: It’s hard to comment on Naspers’ approach as I’m not privy to their decision-making. I can only speak to what we at Nedbank consider the most appropriate way to handle this transition.

Alec Hogg: Considering the inevitability of internal politics, especially during leadership changes, how do you plan to manage these dynamics?

Daniel Mminele: In my view, the key to managing internal dynamics is transparency, communication, and understanding people’s concerns and expectations. Open and constructive engagement, coupled with the right level of transparency, helps to keep these issues in check.