FirstBank's Change of Guards; Adeduntan Passes Baton to Shobo

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Wednesday, April 28, 2021 / 07.27PM / TheAnalyst, Proshare Research / Header Image Credit: Ecographics

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The erstwhile managing director of First Bank of Nigeria (FBN), Dr. Adesola Adeduntan, has stepped down as the chief executive of Nigeria's oldest bank and handed it over to his former deputy, Mr. Gbenga Shobo. The decision was taken at the bank's Board of Directors meeting held on 28 April 2021. The decision was subject to all regulatory approvals.


A few analysts had speculated about a possible board disagreement, but this had no validation based on Proshare inquiries (Adedutan was actually re-elected Director of FBN Holdings in a non-executive capacity). According to bank insiders, the 127-year-old financial institution had introduced the position of deputy managing director (DMD) during the tenure of Mr. Bisi Onasanya, who was managing director between 2010 and 2015.


The position of DMD was designed to improve the bank's succession planning and improve its corporate governance. The appointment of Shobo was, therefore considered to be an indication of the triumph of the bank's new corporate management template. According to the bank's Chairperson, Mrs. Ibukun Awosika, "we are proud to announce Gbenga Shobo as new MD/CEO. His appointment as Deputy proved the resilience of our succession planning mechanisms and the value, we place on our longstanding corporate governance practices, which underpin the institution's enduring sustainability".

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The Onasanya-Adeduntan-Shobo Succession Shift

It would be recalled that Adedutan was deputy managing director under Bisi Onasanya, who spent a single term of five years as chief executive officer of the bank and who was pioneer MD of FBN when the financial structure of the institution was changed to a holding company (Holdco) with UK Eke being promoted to the then-new position of group MD of the Holdco. The ascension of Shobo to the leadership of the bank is, therefore, consistent with the new succession framework of the institution which has seen the upgrading of Abdullahi Ibrahim as the new deputy managing director (DMD), with Mr. Inu Ebong, Mr. Segun Alebiosu, Mr. Seyi Oyefeso, and Mrs. Basirat Odunewu appointed as executive directors (EDs) (see illustration 1 below). 


Illustration 1: FBN; The New Chaps on the Block

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Awosika noted the need to "thank Sola [Adeduntan] for his dedication and effort during his helm at the bank, and before as CFO. The board and I are grateful for his leadership of the bank over the last five and a half years and believe that the strong foundations created during his term will provide an excellent basis for our continued success. We wish him well in his future endevours outside the FirstBank Group".


The bank's succession plan appears to have solved the previous problems of fractious in-fighting and political broadsides that characterized the process of appointing a new chief executive officer of the venerable institution in the past. Nevertheless, the new culture may have its drawbacks as it limits the bank search for superior talent unaffected by existing culture doorstops and institutional biases, indeed managerial 'inbreeding' has its downsides.


However, so far, in-house succession planning at the bank is alive and well and may compensate for the challenges of bringing in an outsider who would spend time understanding the bank's culture and deciding how best to pursue its growth agenda and corporate purpose.

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The Handicap Avoided

A major problem with corporate sustainability is the disruption caused by failed succession plans. Organizations that do not create clear pathways to succession usually end up finding their noses in the dust when star corporate employees leave for other opportunities or by natural administrative progression.


At the heart of corporate sustainability is the capacity to ensure smooth transitions between administrations while locking into the arrangement a coherent and consistent cultural core and corporate plan. The good thing about FBN's recent succession is that it retains institutional knowledge at top management and removes a transitionary learning experience which could set the bank back in a period of general business uncertainty and operational risks.


The B.O.A.R.D.

The bank's new helmspersons will have their jobs cut out over the as they establish a fresh perspective to an old game plan. Five critical considerations would be to do the following (see illustration 2 below):

  • Build authentic purpose from which staff would derive inspiration to excel and provide superior service value to all stakeholders
  • Own purpose in board actions, the board must be environment, society, and governance (ESG) compliant by adopting the best-in-class global corporate governance practices
  • Assess purpose commitment by ensuring that set targets are met within measurable frameworks that are reassessed at fixed intervals. Ensuring accountability at all levels
  • Reinforce purpose mandates in core board decisions, purpose can be used to evaluate strategy and tactics in maneuvering the bank past evolving market situations
  • Drive organizational accountability at every level of business activity from the shop floor to the boardroom, this would permeate measurement, evaluation, and decision-making


Illustration 2: FBN; Getting on B.OA.R.D.

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The new board of the bank will have to prepare for a dynamic and intensely competitive financial services environment form 2021 as market share acquisition, continental M&As and fintech partnerships reshape the service delivery promise to a younger generation of service users, the Shobo era will face challenges the Adedutan epoch, fortunately, never had to handle.


Performance management would have to be scaled up over the next five years and focus lenses on the bank's service user's experience and interactions must be used as tools for improving quality and delivery time. The bank's board will have to drive the B.O.A.R.D.

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Looking Ahead

Shobo is neither new to the bank nor the increasingly aggressive peer competition in the sector as stakeholders expect that he hits the ground running with hot rubber burning the tarmac.


With FBN's new board announcement investors are going to look closely at the bank's Q3 and Q4 performances in 2021 as they attempt to get a sense of the value the new board brings to the performance table (see illustration 3 below).


Illustration 3: FBN - Eyes on the Competition

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The sudden announcement of the bank's change of guards took the industry and the financial market by slight surprise as it differed from the previously measured and carefully orchestrated release of information on the bank's changing of its top officers. Our inquiry made to the Nigerian Exchange Group (NGX) at 03:30pm, after the close of trading for the 28 April 2021, no official communication had been made by FBNH, the parent holding company of the bank; to the management of the Exchange about the change in leadership of its banking subsidiary. However, the requirements of the Exchange's listing rules suggest that such information need only be conveyed to the Exchange within 48 hours of the decision being made. FBNH was, therefore, within a fair market practice, even though in the past such market-sensitive information was sent to the NGX for notification before being released to the press and the wider business community. Analysts have noted that this was a moot point.


Of greater importance is that over the next five years, banking across Africa will wear a different face and the battle for relevance and sustainability will be one of flexibility, institutional purpose, customer-centricity, and scale. Stakeholders have urged that Shobo's mandate is not to hold the short end of the stick by 2026 but to reassure customers, investors, and other parties that the bank's position as Nigeria's most prized financial franchise remains secure and set for superior returns.

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