Profiles

Exit of Britam CEO raises more questions

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Britam Holdings Plc group managing director Tavaziva Madzinga. PHOTO | DIANA NGILA | NMG

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Summary

  • Mr Madzinga announced his exit barely 10 months after he took over from Benson Wairegi who had served 40 years.
  • The Zimbabwean is headed for South African insurer Santam and one wonders whether he really ‘settled in’ at Britam where his few months at the helm has seen heads rolling in one of Kenyans biggest corporate shake-ups.
  • In many firms, CEOs hold on for a while due to a mix of factors, including being founders of the companies.

Britam #ticker:BRIT managing director Tavaziva Madzinga’s short stint at the insurer shows how difficult it is to replace forever CEOs.

Mr Madzinga announced his exit barely 10 months after he took over from Benson Wairegi who had served 40 years.

The Zimbabwean is headed for South African insurer Santam and one wonders whether he really ‘settled in’ at Britam where his few months at the helm has seen heads rolling in one of Kenyans biggest corporate shake-ups.

The actuarial scientist was brought into a company that had entrenched interests, and decades of an executive team built around his predecessor.

To him, the top of the tree weighed heavily on the company, roles overlapped, duplications were all over the business and contractual agreements skewed towards some contractors.

Britam acknowledges that he saved the company Sh500 million in annual expenses through the Voluntary Early Retirement (VER) programme trimming the executive team and re-evaluating contractual arrangements with value chain partners such as vendors and other service providers.

The sudden exit after being head-hunted from Old Mutual remains a puzzle. To many firms, CEOs hold on for a while due to a mix of factors, including being founders of the companies, being credited with the success of the firms and a policy of not arbitrarily limiting CEOs’ terms.

A recent story showed at least seven CEOs of Nairobi Securities Exchange-listed firms have served for more than 15 years and are expected to extend their tenure in a market where on average top managers don’t serve more than a decade.

Among the long-serving CEOs are Flame Tree founder Heril Bangera, who has served for 32 years, followed by Car & General’s Vijay Gidoomal and TPS Eastern Africa’s Mahmud Jan Mohamed, who have served for 25 and 24 years respectively.

Others are DTB Group’s Nasim Devji (20 years), Co-operative Bank’s Gideon Muriuki (20 years), Equity Group’s James Mwangi (17 years) and Crown Paints’ Rakesh Rao (16 years).

Mr Madzinga has more than 20 years of experience in the insurance industry and has served in various capacities, including as chief executive of Swiss Re (UK & Ireland).

He holds a Bachelor of Science Degree from the University of Cape Town and has attended INSEAD Business School, France and Harvard Business School.

When he was picked to replace Mr Wairegi, Britam announced that his extensive experience in multiple insurance markets would help him manage Britam, whose operations have grown more complex in recent years.

His previous stint as chief executive of Old Mutual in Kenya was an added advantage as it handed him familiarity with the local business environment.  

Mr Madzinga is set to quit Britam in April 2022. While announcing his exit, acting chairman Mohamed Said Karama said Mr Madzinga has overseen the insurer’s return to profitability, initiated the transformation of Britam to a client-centric organisation with the development of the 2021-2025 strategy.

In the short stint, he instituted one of the most radical shake-ups at Britam in recent times eliminating nine top executive positions or nearly half of its management team.

The insurer now has a team of 11 managers from the previous 19 with having scrapped several positions including the principal executive director, chief of staff, group chief operating officer, actuary and product development manager, commercial director and Britam asset management unit.

Mr Madzinga also offered workers an early retirement package targeting about 138 workers or 10 to 15 percent of its total workforce which stood at 923 in December 2019.

“Britam is grateful to have benefited from Mr Madzinga’s global experience in repositioning the Group for the future. Mr Madzinga is committed to continue with the implementation of the 2021-2025 strategy and to also oversee a smooth succession planning and transition,” said Mr Karama.

In South Africa, Mr Madzinga is replacing Lizé Lambrechts who had planned to retire next year from the Johannesburg Stocks Exchange-listed insurer.

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