Johannesburg - The decision by MTN to appoint Rob Shuter as the chief executive was “a serious blow to transformation” after the telecoms firm’s good history of black bosses, the Black Management Forum (BMF) said yesterday.
The appointment contributed to the steady decline in the number of black South Africans at the leadership helm in companies, BMF president Mncane Mthunzi said.
Unions and analysts this week welcomed the appointment of Shuter as the right man to lead the telecoms firm and restore investor credibility after MTN agreed to pay $1.67 billion (R24.64bn at yesterday’s rate) to Nigerian authorities for failing to disconnect more than 5 million unregistered SIM cards on its network.
“It is disheartening to note that these decisions are made by the board of directors with the majority of black people and under black chairmanship. The lack of thoughtfulness in dealing with matters of succession in these companies is appalling,” Mthunzi said.
Representation
Shuter will only join MTN next year. It has taken MTN seven months to appoint a new boss after Sifiso Dabengwa resigned in November. MTN’s former chief executive, Phuthuma Nhleko, is the acting executive chairman.
“The BMF’s position is informed by the clear reversal of black representation in top JSE-listed companies. There is a general unwillingness for transformation at top management level, which has resulted in the decline in the number of black South African chief executives,” Mthunzi said.
The BMF said MTN’s failure to appoint a black chief executive signalled that transformation was not a business imperative, which was disappointing.
Mthunzi said the BMF would engage with the Public Investment Corporation (PIC) and other shareholders on the role and moral obligation for the appointment of black chief executives and executives in general.
“These companies are owned by the public and yet they don’t reflect the demographics of our society,” Mthunzi said.
The PIC recently slammed the “excessive” payment made to Dabengwa on his departure.
MTN’S annual report showed Dabengwa was paid R23.66 million “compensation for loss of office”, after he stepped down, despite the Nigerian fine occurring under his leadership.
PIC’s chief executive Daniel Matjila said in December that the PIC continued to see telecoms “as one of the key drivers for both social and economic development”.
JSE debate
Last year a controversial debate arose around how much of the JSE was owned by black people.
The debate was sparked by President Jacob Zuma who said in his reply to the State of the Nation address that black ownership of the JSE stood at 3 percent. This prompted the JSE to fire off a response the following day and said, without naming Zuma, black ownership of the bourse was at least 23 percent of the Top 100 companies as at the end of 2013, with white foreign investors holding about 39 percent and a further 16 percent, which was still to be analysed, would probably include a mix of shareholder demographics, including black South Africans.
Duma Gqubule, a black economic empowerment expert, and the author of Making mistakes, righting wrongs: Insights into black economic empowerment, said yesterday: “MTN is far away from reaching critical black mass (transformation).”
He said Nedbank was an example of a company with a good transformation polity.
Even though it had a white chief executive, Gqubule said the policy was not to replace the job of a black person with a white person.
He said that in order to reach critical mass of enough transformation, companies should follow Nedbank’s transformation strategy.
Gqubule said he believed there were less black executives leading companies on the JSE now than the figures cited in the debate last year.
Nedbank’s 2015 Transformation report highlights how it aims to be a more inclusive workplace and the methods it has put in place.
In the report, Mike Brown, the chief executive of Nedbank, said: “Nedbank’s commitment to remaining relevant in a transforming society is a business imperative and goes beyond regulatory compliance.
“By focusing on the economic empowerment of our staff, clients, business partners and suppliers from designated groups, we have retained our level 2 broad-based black economic empowerment rating for the seventh consecutive year.”
MTN shares rose 0.1 percent yesterday to close at R148.03.
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