Leadership: Are Premier Companies Doing Enough to Groom Leaders Organically?
Banking
Source: LinkedIn

Leadership in premier companies is an important aspect of the value creation process. The CEO sets the pace for executing the mandate of the board. The role requires that they live and breathe the strategy of the firm. Competitors will decode the signals from them when making choices of whether to compete or not. That is why we at FinInsight keep a close watch on the movements of CEOs in Zambian businesses because it gives us an indication of the management type and their preferred strategy.

 

Victoria Luby and Jane Stevenson in their 2016 Harvard Business Review (HBR) article “7 Tenets of a Good CEO Succession Process”, argued that choosing a CEO is a high-stakes proposition and it is the most important decision a board can ever make. They believe that although situations such as macro factors can demand outside successors, internal candidates remain the future CEOs-of-choice.

That is why it was no surprise that we stumbled upon circular number 03/2012 (Date 1 February 2012) from the Bank of Zambia website, signed by Dr Bwalya Ngandu (Deputy Governor Operations) aptly titled “ENGAGEMENT OF EXPATRAITES IN THE FINANCIAL SECTOR”.  An extract of the statement reads: “In line with the provisions of Section 31 of the Banking and Financial Services Act and in accordance with the designation procedures prescribed by Bank of Zambia under Sections 6 and 12(3) of the National Payment Systems Act, directors and other senior officers of a financial service provider, payment system and payment system business must satisfy the fit and proper test criteria before being appointed to take up a position in a financial service provider, payment system and payment system business

The statement further elaborates the criteria that should be used as part of the vetting process of acceptance of nomination of expatriates. It states that the employment of expatriate personnel shall be permitted only in specified categories of jobs and only expatriate personnel who meet the prescribed qualifications and or experience shall be eligible. Furthermore, expatriate personnel qualifying for such jobs shall be engaged for a period specified in their employment permits. Lastly, the categories of jobs in which expatriate personnel shall be permitted are those in which the country is at present deficient in local skill. Therefore, the employer of such expatriate personnel shall be required to carry out a genuine programme of training for replacement of such personnel by a local candidate within a period to be specified in the employment permit application.

The central banker clearly had homegrown talent in mind that would eventually take over the game of thrones of financial institutions. However, with the number of MNC (multination corps.) that are now domicile in Zambia, it has become apparent that the next generation of leadership must be harvest from the internal ecosystem. Although the central banker indicated that all new engagements and renewals of contracts for expatriate persons to operate in the financial sector will require BoZ approval prior to submission of an application for a work permit to the DoI, closer scrutiny on the grooming policies must be made.

In our next article, we will assess how regional central banks are handling the issue of skills transfer and how their profile of CEO compares with Zambia.

 

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