Alexander Forbes restructures its executive

Newly-appointed Alexander Forbes chief executive Andrew Darfoor unveils a new group structure.

Johannesburg - Newly-appointed Alexander Forbes chief executive Andrew Darfoor yesterday announced a new group structure that would report directly to him.

Darfoor said the specialised financial services group decided on restructuring its executive to nine people to ensure that it had an optimal leadership structure. He said the new executive and the restructuring marked the beginning of a new chapter in Alexander Forbes and a focus on co-ordinated strategic activities while ensuring collaboration between the various divisions and shared services functions.

“We are determined to build on the excellent franchises and the dedicated people of Alexander Forbes to meet the needs of our clients and accelerate our execution delivery capability, while promoting enhanced collaboration,” Darfoor said.

“As part of this announcement, our Lane Clark & Peacock (LCP) business headquartered in the (UK) will have direct oversight from me,” he said.

Darfoor said the four cluster committees (Institutional, Retail, Optec and Shared Services) would remain in place and their mandate would be the implementation of strategy and the overseeing of operations and value proposition to clients.

Debt reduction

In June, the group reported a 143 percent rise in after-tax profits to R874 million for the year to March, attributing the results partly to the restructuring and debt reduction.

Mergence Investment Managers analyst Nolwandle Mthombeni said the restructuring was a standard practice by companies to adopt new long-term focused strategies.

Mthombeni said companies wanted to evolve along with the changing macroenvironment and to effect what facilitated long-term growth and sustainability. “In Alexander Forbes’ case, it’s not only facing regulatory pressure on the back of retirement reform and retail distribution review, which will be introduced over the next few years, but there is also increased competition as competitors become more aggressive in capturing more market share,” Mthombeni said.

“As the operating environment changes, a company needs to be able to adapt in order to remain relevant and this is why the group has adopted this new approach.”

However, Mthombeni warned that the executive was too big for the size of the company.

“While listed companies do have many members on their executive committee, at an R8.8 billion market capitalisation and R1bn in operating profit, 13 is too many for Alexander Forbes. It is a larger number than some of its peers that are more than triple its size in terms of market (capitalisation). As a result there has been a duplication of duties, as evidenced in the 2016 integrated annual report.”

Shares declined 0.16 percent yesterday to R6.37.

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