Investors fret over frequent leadership changes in Guinness

This is the third time in eight (8) months that the company is changing its Chief Executive Officer (CEO).

Analysts hinted that this could points to far deeper issues in the company and portends trouble for investors. It is believed that a major management dysfunction in any company is the frequency in leadership turnover and for a corporate icon such as Guinness to have three CEOs in eight months is ominous.

The uncertainty as expressed by investors and shareholders highlights fresh concerns over the company’s corporate governance and business strategies adopted. This may not be unconnected with the dreary performance in its audited 2014 result.

From Seni Adetu to John O’Keeffe to Soren Lauridsen and finally to Peter Ndegwa, long succession of CEO of the company in 8 months signifies some trouble in the company which may be a result of boardroom crisis or performance related issues as the company’s sales figures have continue to dwindle in audited report.

Guinness in an announcement to the Nigerian Stock Exchange (NSE) said Lauridsen decided to leave his position as MD of Guinness Nigeria due to personal, family related reasons, effective end June 2015.

The company disclosed that O’Keeffe will continue as a non-executive director of Guinness Nigeria and, as the Diageo executive responsible for Diageo Africa business, will continue to stay involved with the business.

Guinness revenue in 2014 slumped to N109 billion from N122 billion in the preceding year, translating to a decrease of -108 percent. Profit before tax also dipped significantly by -31 percent to N11.681 billion from N17 billion previously. Similarly its profit after tax also depreciated by -19 percent to N9.495 billion from N11.779 billion.

Olorogun Godwin Anono, chairman of standard Shareholders Association said ” the frequent changes may be as a result of boardroom squabbles which might affect the company negatively in both short term and long term and it is bad for investors”.

Mr. Peter Ndegwa was appointed the managing director of Guinness Ghana Breweries Limited in September 2011 when he joined the business from East Africa Breweries limited.

He was able to conduct a complete restructuring of GGB limited despite very challenging external operating conditions – substantial currency devaluation, slowing GDP growth and high cost of doing business.

He holds an MBA from the London Business School and a Bachelor’s degree from the University of Nairobi and is also a qualified accountant.

He has over 10years working experience in East Africa and the United Kingdom with the global accountancy and consulting firm, PricewaterhouseCoopers. Ndegwa joined Diageo in 2004 in East Africa as strategy director for East Africa Breweries Limited (EABL), a Diageo’s subsidiary.

His experience span sales, strategy, business advisory and finance in a variety of sectors including retail, manufacturing, banking, insurance and general services.

He is a highly effective and accomplished business leader with a proven track record in strategic and commercial leadership spanning over 20years.

He excels in orchestrating strategic change, driving organisational and team alignment and building momentum around business priorities and delivering superior business results.

He leverages both his natural authenticity and strong diverse experience across a set of functional areas (strategy, sales, finance, consulting) to create impetus in organisations and teams.

He has been particularly successful in creating highly engaged teams and organisations.

Guinness Nigeria Plc, a public limited liability company currently quoted on the Nigerian Stock Exchange, was incorporated on 29 April 1950 as a trading company importing Guinness Stout from Dublin.

The Company has a strong portfolio of alcoholic and non-alcoholic beverages such as Guinness Foreign Extra Stout, Guinness Extra Smooth, Malta Guinness, Malta Guinness Low Sugar, Harp Lager, Smirnoff Ice, Satzenbrau Pilsner Lager, Dubic Lager, Snapp,  and Orijin.

However, its products are struggling in the market because of stiff competition and health

 awareness on sugar intake.  Guinness Nigeria is a subsidiary of Diageo Plc and its total shareholding in Guinness Nigeria was 54.32% at year end.