- Spar has announced that CEO Brett Botten will step down at the end of January, while former Chairman Graham O’Connor will do so in February.
- This is part of a board shakeup that includes the appointment of two new independent directors and the departure of a veteran board member.
- Spar was hit by a wave of negative publicity in 2022, including accusations that it had manipulated store values, but also scrutiny from its government.
- For more financial news, go to News24 Business Cover.
Retail group Spar said on Tuesday that CEO Brett Botten will retire at the end of January as part of a shakeup that will also see former chairman Graham O’Connor leave the board after the group’s annual meeting in February.
Phumla Mnganga will step down as independent non-executive director after the February 14 meeting after serving for 17 years, the group said, while it has also appointed two new independent directors with immediate effect.
O’Connor resigned as chairman in December, following a series of negative publicity for the group, including accusations that he inflated the price of a store in Johannesburg.
Criminal complaints were also filed against senior Spar executives, including O’Connor, in December amid allegations that the grocer falsely claimed in 2019 that he was owed money to gain control of certain supermarkets.
Additionally, News24 reported that two “fictitious” loans were discovered in a report compiled on behalf of Spar’s board, which was investigating allegations of unfair treatment and racism. The company’s governance has also come under fire in some quarters after O’Connor became Spar’s chairman in March 2021, a month after retiring as chief executive, contradicting the King’s Code recommendation of a interruption of at least three years.
Spar has defended the independence of the board, saying it had previously extensively debated the merits of appointing the former chief executive as head of the board, while also saying the negative publicity came from a small minority of its store owners.
A network of independent retailers trading under the Spar brand and voluntarily sourcing through its distribution centres, serving over 2,500 stores across southern Africa.
board pressure
Jean Pierre Verster, CEO of Protea Capital Asset Management, said Tuesday’s announcements that both the CEO and the previous chairman would be leaving Spar indicated the retailer was “cleaning house after some recent revelations about corporate governance concerns.”
FNB’s portfolio manager, Wayne McCurrie, agreed that Spar had faced a fair amount of bad press recently.
It said there were also “allegations of discrimination by Spar towards certain franchisees based on race and location.” Although Spar had retained a law firm to investigate the matter, McCurrie said, he was unable to find any systematic evidence of discrimination based on race and location. However, by the grocer’s own admission, McCurry said, he had admitted that there were flaws in the way he conducted his business and he would seek to fix them.
While he did not specify what these flaws were, he said such admissions did not bode well for the group, which had also questioned the independence of its president.
He said that the ongoing media scrutiny had likely created a lot of pressure for both O’Conner and Botten, adding that this had “clearly been too much for them”.
“I have no doubt that we will hear more about why they are leaving. There will be an announcement, probably very soon, from Spar, because this does not happen normally: that the CEO is leaving at the end of the month and [the] the president does not run for re-election. Clearly, both were under pressure.”
new appointments
The group said on Tuesday that it had appointed Shirley Zinn and Pedro da Silva as independent directors effective at the annual meeting.
Da Silva has held numerous senior executive leadership positions around the world, including as CEO of Pick n Pay Retail SA, while Zinn’s previous roles include head of human resources at Woolworths and Standard Bank SA.
Zinn is also on the boards of Sanlam and Sanlam Life Insurance, as well as Spur and MTN SA.
