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Many companies listed on the JSE were founded or are run by a charismatic leader. The problem with this is that when that leader leaves the company, the share price can drop significantly and a big challenge for companies with charismatic leaders is an effective succession plan that does not result in a loss of investor confidence. An obvious example of charismatic leadership is Neal Froneman of Sibanye. He is credited with gathering together a substantial group of precious metals businesses at a time when precious metals prices were low to create a highly profitable international business. To do this he had to face off with the most militant union in South Africa, AMCU and defeat it resoundingly. He also had to take significant risks on the strength of his belief in the future of precious metals. There can be little doubt that if he retires Sibanye will suffer from a loss of investor confidence. Another example, is the enormous support which Long 4 Life (L4L) obtained by having Biran Joffe as its leader. Joffe was well known for building the Bidvest group up from nothing into a massive international business. His leadership enabled him to raise R2,3bn at the listing of L4L without any clear plan for how that money was to be spent.

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