Customs Street Advisors

This week on Street Talking in NEXT, I discuss the importance of providing fora of visibility for those in the succession line at companies on the Nigerian Stock Exchange.

For an institution long considered key man-captive, UBA has proven the pundits wrong. Less than forty-eight hours after the new Central Bank of Nigeria rule on the tenure of bank chief executives, UBA, without skipping a heartbeat, announced that Phillips Oduoza would replace Tony Elumelu its helm. Three words rush to mind in describing the first phase of the transition: seamless, smooth, style. Up to that point, it was flawless.

Over the weekend, the departing CEO granted a rare media interview to expound on his vision for the bank and supreme confidence in its future. In his account of the legacy he will leave behind and his plans for the next phase of life, there was scarcely a hint of hesitation on the caliber of institution he will bequeath. Julie Covington’s melancholic rendition of ‘Don’t cry for me Argentina’ was the farthest thing from the reader’s mind.

Rather, TOE, as he is affectionately called, displayed the stoicism of Jacques in William Shakespeare’s play, As You Like It, with his ‘All the world’s a stage’ speech. Indeed, if this was a theatre performance, at that point, the audience would rise to its feet and give him a standing ovation. Alas! This is no swan song. It is about a public company that should continue to thrive long after he leaves 57, Marina on July 31. And this is where I picked an issue.

If the goal of the interview was to assure the bank’s employees, customers, partners and shareholders that the institution will be in capable hands after the current CEO steps down then UBA could have done better. The deficit was not because the incumbent did not have high words of praise for his successor. Instead, the entire interview, without prejudice to the diverse subjects covered, was at a fundamental level really about a single individual, Tony Elumelu, and not about the leadership he has groomed to fill his big shoes or the future direction of the bank in the hands of the incoming leadership. If it was, the interviewees should have been both the current CEO, and his dauphin. A joint interview session would have provided a far richer personal and institutional fabric on the frictionlessness of the transition.

Since the announcement of his appointment, no one is better qualified to speak in frames of accountability about the future of UBA. While it may not rate as a grievous error, it was more than a trifling oversight that the CEO-designate was not part of the interview. Given the circumstances of his appointment, even if an individual interview is organized for him in the coming weeks, and I hope it will, a dual interview would have offered readers a more informative view on the dynamics between the two leaders. Probably, the thinking at UBA is that until his departure, Tony Elumelu remains the CEO. It is uncontested that there can only be one captain on a ship. Of course, this makes the faulty assumption that the visibility of senior executives is a latent threat to the primacy of a CEO.

This week, Weber Shandwick, the multi-specialist PR agency, released the results of its two year survey on C-suite participation at premier global fora titled ‘Five-Star Conference’. According to the study, ‘CEOs [increasingly] recognize that speaking opportunities serve as platforms for senior executives to further amplify corporate messages to key stakeholders and increase mind share and market share. By sharing responsibility for getting the company’s message in front of the right audiences, CEOs and executives are providing assurances to key stakeholders that they are not only well-led but that they have worthy successors in place.’

The new Central Bank of Nigeria rule on tenure has shone the klieg lights on the succession conveyor belt at all public companies and not just at the banks. Companies on the Nigerian Stock Exchange are now challenged to put succession plans in place and provide visibility windows for those in the frontline of succession.

Ironically, the NSE itself has come under scrutiny over its own successor selection process. In what seems to have become an unbecoming trademark of its corporate communications department, it issued a combative press release with the inelegant title, ‘Absolutely no Crisis of Succession at the Nigerian Stock Exchange’. Considering the NSE’s demutualization ambitions, the issue of succession is not simply one of academic interest.

It is not unthinkable that going forward public company investors will demand a succession discount on companies without a deep bench of potential candidates after a seven year stay of an incumbent. Regardless of the growing global trend to hire external candidates as CEOs, by demonstrating that it has a first, second, third and fourth bench of candidates for future leadership from the C-suite to the assistant general manager cadre, companies can command a premium in the emerging arithmetic of discounted personnel flow (DCP). The key man is dead! Long live the key men!

The original article may be read here on the NEXT website.

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