Vodacom Group Limited’s new CEO to be, Shameel Aziz Joosub, will navigate the South African mobile phone company through transition in the coming years. He’ll likely pay more attention to the needs of the company’s majority owner, U.K.-based Vodafone Group Plc., than other investors.
Joosub was formerly CEO of Vodafone’s Spanish unit. But now Petrus Johannes Uys, who joined Vodacom in 1993 and moved up the ranks to become CEO in October 2008, has resigned. The two men will become co-CEOs in September. Then in March 2013 Uys will leave Vodacom and Joosub will take full leadership, according to news reports.
This isn’t the first recent executive shuffle for Vodacom. On June 15 Ivan Dittrich joined the company as its CFO and executive director, after having previously been CFO at the information communications technology networking firm Datatec since May 2008; his predecessor, Rob Shuter, is now CEO of Vodafone’s unit in the Netherlands. Meanwhile David Hugh Brown, the CEO of the miner Impala Platinum Holdings Limited, became Vodacom’s non-executive independent director in January.
The new managers must steer a company that is bracing itself for intensifying competition, at the same time its customers remain bogged down by rising food and fuel prices. Meanwhile Uys said in May that Vodacom is on the hunt for small acquisitions in the $100 million range, in an attempt to expand into countries such as Angola, Ethiopia and Uganda, according to Dow Jones Newswires.
As Vodacom’s new managers transform the company, they could have more checks and balances in place to ensure that they play fair. Five Vodafone representatives serve on the company’s ten person board, including Paolo Bertoluzzo, the CEO of Vodafone’s Italian unit, and Nicholas Jonathan Read, its CEO for Africa, the Middle East and the Asia Pacific region. Meanwhile, since Vodafone owns 65% of Vodacom’s stock, it controls any vote put to shareholders. In part due to such problems, GMI gives Vodacom a D on its corporate governance overall.
Also, Vodacom doesn’t give its investors as much information as it could. For example, its board doesn’t provide formal documentation evaluating its own performance on a regular basis. The company also fails to detail its process for giving the nod to business deals with familiar parties. It’s not even clear what rights Vodacom’s shareholders have to approve mergers and acquisitions. Vodacom’s disclosure is so limited that GMI can’t calculate an AGR score comparing the company’s accounting risk to peers.
Of course, none of this means Vodacom is doing anything wrong. But when a far flung company contributes to the earnings of a global giant such as Vodafone, which earned $6.96 billion in the year ended March 31, investors would benefit from more clarity. The recent transformations in the company’s management merely add to the confusion.
Region: All Other
Sector: Telecommunications Services
Industry: Wireless Telecommunications Services
Market Cap: ZAR 139,108.8mm (Large Cap)
ESG Rating: D