Times Of Swaziland: SANDILE’S LIDWALA CEO APPOINTMENT WRONG - EXPERT

SANDILE’S LIDWALA CEO APPOINTMENT WRONG - EXPERT
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BY WELCOME DLAMINI on 12/01/2020 00:57:00


MBABANE – A corporate governance expert has weighed in on the appointment of
Sandile ‘Chief’ Dlamini as CEO of Lidwala Insurance; his opinion is not a
rosy one.
Hardly a month after retiring as Registrar of Insurance and Retirement Funds,
Dlamini was announced as Chief Executive Officer of Lidwala – a major player
in the industry he had just been regulating.
Dlamini’s other title was that of CEO of the Financial Services Regulatory
Authority (FSRA), which incorporated the insurance and retirement funds.
The Times SUNDAY approached the corporate governance guru to find out how he
viewed Dlamini’s appointment.
He did not mince any words: “The appointment is certainly not the best
practice in governance. It’s unfair to the other insurance industry players
and compromises the integrity of FSRA.
‘‘It raises questions on when did Sandile become interested in Lidwala and
how did this influence his interaction with Lidwala’s competitors whom he was
at liberty to investigate.”
When he was registrar, Dlamini’s functions included supervising and exercising
control over the activities of insurers and retirement funds in terms of the
Insurance Act and any other law of the Kingdom of Eswatini.
Dlamini had access to privileged and confidential information of all insurance
companies but was compelled by the Act not to divulge same in public.
He even had the powers to, any time without launching an investigation, order
persons to appear before him at a stated time and place to answer questions on
any matter pertaining to their businesses that he was empowered to supervise in
terms of the Insurance Act or any other Act.
intricate information
It is therefore, feared that Dlamini knows intricate information about all
insurance companies in the country, which he would now consider to be his
competitors.
There are suggestions that in the spirit of good corporate governance, he should
have observed a cooling off period before assuming the Lidwala CEO position.
A paper written by two Germans; Patrick Velte and Markus Stiglbauer, addressed
the question of whether a cooling off period was necessary, especially when
switching from a managing to a monitoring position.
It concluded that a cooling-off period may help to reduce the problem that is
encountered when a person monitors processes and strategies which he himself has
formerly developed and implemented.
In Nigeria, there is the Nigerian Code of Corporate Governance, which
discourages the transition of managing directors, chief executive officers and
executive directors to the role of chairman and mandates a three-year cooling
off period where this is the case.
“This will assist to minimise potential conflicts of interests. During the
cooling off period, it is advisable that such directors continuously update
their skills, knowledge and experience, remain informed on key changes in their
industry and regulatory landscape to ensure that they remain relevant,” reads
the code.
conditions of employment
Last year in neighbouring South Africa, a similar situation unfolded when former
Reserve Bank Deputy Governor Daniel Mminele was appointed CEO of Absa Group Ltd.
Having left the Reserve Bank in June 2019, Mminele will only join Absa on
January 15 after a six-month cooling period.
A high-ranking government official who is conversant with Dlamini’s role at
FSRA said there was no cooling-off period in his terms and conditions of
employment.
He said Dlamini was therefore definitely within his right to look for employment
immediately after leaving his position as registrar.
“Government doesn’t have any kind of restraint of trade or a cooling off
period in the contracts it enters into with these people,” said the official.
He said with the former Reserve Bank Deputy Governor, you might find that there
was such a clause in the contract “yet we don’t have the same at FSRA nor in
government. May be we now need to get there.”
He said in Sandile’s case, one needed to look at the fact that he was 60 years
old and out of a job yet very able and smart and, therefore, if he can find a
job then good for him.
Meanwhile, the corporate affairs expert opined that Sandile “still has
influence at FSRA and will certainly capitalise on this. I could say more but
emaSwati don’t seem to care much about good governance. Instead of focusing on
governance violation, they will say we are a jealous lot.”
On the other hand, the senior government official somehow concurred with the
expert.
“Obviously, there is a point here because government hasn’t been looking at
such possibilities. Sandile was a very prominent figure at FSRA, not only as a
CEO.
‘‘Now being the CEO of one of the biggest insurance companies does give that
insurance company somehow an upper hand on the one side,” he said.
But he also said there was another side of the coin: “On the other side, you
might find that other FSRA employees are not going to give him the respect as
their former boss but will turn to say we are now your bosses.
‘‘The advantage is somehow neutralised by the disadvantage of now having to
go ask from your previous juniors for something at FSRA. I am not sure if
Lidwala as an institution is better off with or without him.”
The official added that this case was an eye opener.
When Dlamini was contacted, he said he was in South Africa and could not respond
but told the Times SUNDAY to ask from his former employers if he had a
cooling-off period in his contract.
“But for now I ask not to say anything until my return to the country next
week,” he said.
refrain from commenting
Minister of Finance Neal Rijkenberg said he preferred to refrain from commenting
on the issue.
A questionnaire was sent to Lidwala Insurance company’s founding CEO Isheunesu
Makuzwa but he had not responded to it by the time of going to put the paper to
bed yesterday.
On Thursday, Makuzwa announced during a press briefing that Dlamini had been
given a five-year contract.
He said Dlamini brought with him a wealth of experience in the industry and was
definitely a man who understood security of an insurance company.
“His acceptance of this appointment tells a big story about the state of the
company. With him at the helm, our clients can derive further confidence that
Lidwala is a secure insurer and under his stewardship, it can only get
better,” Makuzwa was quoted saying.
Dlamini told the media that Lidwala was giving him an opportunity to implement
what he had all along been encouraging financial institution supervised by FSRA
to consider doing.
When stepping down from FSRA, Dlamini exited with a bang when he said a simple
solution to combat corruption in the country would be to get rid of Dlaminism.
He said this during his farewell function that was held at Royal Villas. He said
if combating corruption could start with Dlaminis, the rest of the citizens
could shape up with little effort.