So Nick Dennis has fallen on his sword by taking early retirement, after nine years as CEO of Tiger Brands and 24 on the board. He was admired by his peers, and Tiger under his leadership attracted investors - its market capitalisation nearly tripled to R31bn in the four years to September 2007. So it is an unhappy end to a distinguished business career.
Does he deserve it? Dennis decided, nearly a month after Tiger's announcement that it would pay a R98m fine for engaging in anti competitive activity, that his departure would be "appropriate". Chairman Lex van Vught, the former AECI boss who took over in March 2006 from Robbie Williams, acknowledged Dennis's "principled stance", and the decision to let him go after the AGM in February softens the blow. That suggests a compromise: Dennis is taking responsibility but is not regarded by the board as guilty.
Dennis has said all along that he and his top team did not know of the anti competitive activities - meetings between "certain Tiger employees and some competitors" - and there is no reason to disbelieve him. The issue is not whether he knew (bad incidents occur in the best-run companies) but whether anti competitive practices were actually endemic in the company's approach to business.
Recent coverage has overlooked the statement that Tiger issued in March this year, when the allegations first surfaced. It said then that the meeting between executives from Tiger and its competitors "was called to discuss the theft of bread crates that is a serious industry problem... and other matters not pertaining to prices". But it admitted that its bakery personnel did then share decisions taken to reduce discounts to distributors and to implement price increases.
Was the sharing of price information inadvertent or intentional? If this was an isolated incident, and not the tip of an iceberg, was it worth accepting a R98m fine? If there is an iceberg, what other kinds of anti competitive activity have been discovered? Did the guilty individuals gain financially? If not, what was the incentive for them to behave unethically?
A clue to answering some of these questions may lie in what has happened to the people whose actions led to what was in effect a huge admission-of-guilt fine. Only after being pressed did the company tell the FM that the employees received a final written warning and incurred "significant financial sanction". No jobs were lost - though apparently most of the individuals concerned had already left the organisation. It was seen as mitigation for those remaining that they co-operated fully with the investigations.
It seems a remarkably light punishment for employees who are required (says the latest Tiger annual report) "to ensure that business practices are carried out in a manner that is beyond reproach", but who were guilty of practices that were, in Dennis's own words, "entirely unacceptable". Can it be that what they were doing was in effect condoned, if only because the company had never bothered to prevent it?
If the fall of Nick Dennis has elements of tragedy about it, the corporate profile of Tiger has taken on elements of farce. Its vocal corporate affairs executive, Jimmy Manyi, spends much time in his capacity as president of the Black Management Forum (BMF) attacking other companies for lack of racial transformation. In quick succession, the BMF has praised Dennis for his record and called on Tiger to appoint a black CEO, while Manyi was reported as saying that the black CEO did not need to be him. When is Manyi wearing which hat? He seems to be battling with a conflict of interest that makes the company look undignified, at a time when it needs all the reputation enhancement it can get.
Van Vught acknowledges there is much work to be done on restoring Tiger's reputation. It needs to start with comprehensive transparency. Its public statements on the matter have raised far more questions than they have answered.
Ranking the Analysts 2009
