By Duncan McLeod
Jeffrey Hedberg’s short-lived tenure as chief operating officer of Altech and CEO Craig Venter’s very public reaction to his resignation appear to reflect deep underlying tensions in the Venter family empire. Can Altron founder Bill Venter, now 77, hold the family-run business together, or is it time for changes at the top?
Family businesses are tough things to manage at the best of times. There are often huge egos at play, sometimes the wrong people get appointed to run them, and family dynamics can make it difficult to make the right business decisions. Are Altron and subsidiary Altech, the JSE-listed companies run by the Venter brothers (and Bill’s sons), Robbie and Craig, falling into some of these traps?
Talk of strains at Altron and Altech has been there for some time. Robbie, the older son, has reportedly wanted to emigrate for several years. His wife and children live in the UK and he commutes regularly between Johannesburg and the UK to be with them. People close to the family say he’s resigned himself to running Altron for at least another few years, but the long periods of separation from his loved ones must be difficult.
Talk is Robbie is not going to stick it out in the long term. How can he? And who will take the reins when he goes? These are questions that shareholders will eventually need answered.
Craig, meanwhile, is said to be keen to take the reins at Altron from his brother, even if not immediately.
But talk among senior executives at the two companies — Altech is a subsidiary of Altron — is that Bill, the patriarch, doesn’t believe Craig is quite ready for the top job. The thinking, I’m told reliably, is that he needs another few years at Altech to prove himself.
Certainly, Craig has had a difficult time in recent years, in spite of the great job he’s done of building Altech’s fortunes in the 15 years he’s been at the helm. Altech’s foray into East Africa’s telecommunications market has been a bit of a disaster. And the pressures are growing at home. The share price has been moving sideways for five years and the group has become unwieldy and difficult to manage with more than 30 operating subsidiaries. Restructuring may be necessary.
Craig plays down the fact that he’s lost four of his top lieutenants in the past 18 months — some insiders say his “abrasive” management style led at least some of them to resign; others credit him for his “tough” approach and for not tolerating poor performance — but it has to be a blow, however he portrays it. Craig says his colleagues describe him as a “tough but fair” leader. At least one former executive I spoke to concurs with that assessment.
A recent report in the Sunday Times, which was highly critical of him and questioned whether he was the right man to lead Altech into the future in light of Hedberg’s short-lived tenure, prompted him to pen a long and defensive rebuttal.
I hear Hedberg had been promised the top job at Altech, with Craig to move on within a year, possibly to a top role at Altron. It quickly became clear, however, that Craig wasn’t going anywhere.
In light of all of this, the Venters clearly need to do some soul-searching as far as the questions about succession hanging over the group are concerned. In the interests of good corporate governance, they need to speak openly and honestly about how they plan to deal with succession and other challenges.
It’s a message they probably don’t want to hear, but it’s time the Venter clan started dealing forthrightly with issues that investors and analysts are talking about in private. And they need to do it while the advantage is in their court.
- Duncan McLeod is editor of TechCentral; this column is also published in Financial Mail
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