Recently at a conference in London a business responded to the question about the lack of engagement of mining businessmen in the discourse about the nationalisation of mines, saying: “There is no upside in engaging publicly with politicians. The only way to influence things is to do it on a one-to-one basis.”
So where is the upside of public engagement on all issues that affect the economy? This fear of publicly engaging with the issues took a more solid nature in former president Thabo Mbeki’s administration.
The first seemingly routine statement that required companies to state the risk factors facing the businesses listed in the New York Stock Exchange was made by Sasol around black economic empowerment (BEE). The statement was factually correct to say that BEE could bring variability to profitability if the regulations were uncertain or changed and, therefore, theoretically BEE is a risk factor.
The politicians viewed this statement from a political lens and started attacking Sasol, emphasising that Sasol did not focus on the positive side of risk in terms of the opportunities that could be created from complying with BEE. This led to the famous rantings between the Sasol chairman Paul Kruger and Mbeki around December 2003. This unwittingly accelerated the transformation drive within Sasol because of the public scrutiny the company received.
Then in 2004, Tony Trahar, who was the chief executive of Anglo American, commented in a Financial Times interview that despite all the changes over the years South Africa was still politically risky. Mbeki took issue with this assessment and asked what information was used as a basis of reaching the conclusion that South Africa was still risky. The debate reverberated for a while in the media and created a level of fear from other businessmen from pronouncing their views publicly.
The result of the debate is that there was more scrutiny on the transformation record of Anglo American. In September 2004, the company appointed its first black chief executive, Lazarus Zim, to overlook the South African operations and confirmed the commitment to the country, its political leadership and transformation. Furthermore the company confirmed its plans to invest some R26 billion in the economy.
In 2007 with the sensitivities of the ANC elective conference of Polokwane looming, FirstRand chief executive Paul Harris planned to launch a R20 million anti-crime campaign that required people to write letters to Mbeki about how crime had affected them. This time the first critics came from other business leaders who felt the campaign would damage the business community’s engagements with the government on crime. Also some government officials engaged with the lender in the background, and the campaign was pulled to further criticism from opposition political parties. This was one of the last visible public engagements of business with issues that affected the government and politicians.
Fast forward to 2012, when Reuel Khoza wrote in Nedbank’s annual report that South Africa’s democracy was under threat from a “strange breed” of political leader who appeared to be incapable of dealing with the demands of modern-day governance and leadership. He notes that: “Our political leadership’s moral quotient is degenerating and we are fast losing the checks and balances that are necessary to prevent a recurrence of the past.”
This drew a very biting response from ANC secretary-general Gwede Mantashe, who said that Khoza should mind his business. Mantashe also highlighted the failure of Khoza to find a buyer for Nedbank as mandated by Old Mutual.
Interestingly the outgoing chairman of Absa, Garth Griffin, commented that endless discussion was a luxury South Africa could no longer afford.
So we are slowly seeing the businessmen finding their voices and stating their views with confidence. That is the business leadership we need to see more of.
Politicians have a right to respond to the views expressed by businessmen, which makes for a robust debate. This analysis shows that while there is indeed a downside for the businessmen that speak up and they could be ridiculed, there is an upside for society in general.
In 2009 at the World Economic Forum Africa Meeting, Trevor Manuel slated business leaders as cowards for not standing up to labour. “If we’re going to have cowards in business, we’re not going to get very far either. You must have that counterweight if you want that progress.”
The same courage should be applied to stand up to politicians. We need all players in our economy to come to the game at their fittest, where they can play the ball and not the man.