THE BOTTOM LINE
Flushed with success, not flushed into the void
Amazing that Alexander Forbes, reeling from the exodus of seven execs, is still standing, never mind thriving
The exodus of seven executives in the space of less than three months would, in any other company, be regarded as a crisis – with the share price tanking as investors try to establish what is going on.
But in the case of Alexander Forbes, the share is down only 4.6% since the first executive departure, the unceremonious axing of former CEO Andrew Darfoor. Analysts attribute this to the financial services group’s “stability”, saying it has a lot of potential if well managed.
What probably helped limit share price movement during the recent departures is that the Alexander Forbes board is being proactive in managing the executive team. It can be seen in the swift appointment of Dawie de Villers only a month after Darfoor, and the recent installation of an executive committee to look after the business units that have been left without their heads.
The situation might have been different if the board was exclusively reacting to unexpected resignations, one analyst said. “While the governance issues are evident I would not consider this a crisis as certain changes were necessary,” said Warwick Bam, head of research at Avior Capital Markets.
He agreed, though, that the disruption caused by appointing a new executive team cannot be underestimated.