Black CEOs thin on ground

Johannesburg - Corporate SA dreads change. Only five of the JSE Top 40 companies listed on the JSE main board are led by black executives.

And three of those companies - MTN, Exxaro and Telkom - have significant black or government ownership.

ArcelorMittal SA, Tiger Brands and a few other small caps on the main board have black CEOs.

In the case of the small technology companies, the black CEOs are shareholders or run businesses that are heavily reliant on the state for business.

The longest-serving and perhaps the most distinguished of the black CEOs on the JSE is MTN chief executive Phuthuma Nhleko.

He has done wonders with the company - making MTN the country's most profitable mobile phone company, Africa's largest cellphone operator and by far the largest black-owned firm on the JSE.

It is a truly multinational business, with a footprint in more than 20 countries and a market capitalisation of more than R200bn.

His being at the helm has more to do with the company's empowerment origins than anything else.

Nhleko is an astute manager and a shrewd deal-maker, and this is borne out by the potential transaction with India's Bharti Airtel which will create a company with more than 200 million customers.

Reuben September, the Telkom chief executive, also finds himself at the top because the company reports to a government that has sought to affirm black talent. September's predecessors were Papie Molotsane and Sizwe Nxasana, who, having proved himself, was snapped up by the FirstRand Group.

Exxaro's Sipho Nkosi rose through the ranks after his Eyesizwe Holdings became a significant coal miner.

Nonkululeko Nyembezi-Heita and Peter Matlare, chief executives of ArcelorMittal SA and Tiger Brands respectively, were given their big breaks by public utilities and BEE companies.

They face the challenge of clearing up an anti-competitive behaviour mess created under the watch of their predecessors and of repairing fractured relations with the government.

Empowerment analyst Reg Rumney says there has clearly been a lack of commitment to transformation. "Business was slow off the mark with affirmative action and there was quite a bit of window dressing in the initial stages," he says.

"It is still an old boys' club out there, and breaking in will always be difficult. There has been this conservatism; the bottom line is, people don't give up power easily."

Rumney says he is, however, encouraged by what he is seeing at companies such as Standard Bank.

"Clearly Sim Tshabalala is being groomed for big things at the bank. It takes time for people to come through the system.

"As long as the numbers of black executives are this low, there will always be political pressure. It won't go away until we have black managers in significant numbers. Those not doing it cannot escape forever," Rumney says.

Having a black CEO is a potent symbol of change.

"It is slow, but it will happen. The path to the CEO chair is never easy. In our resources-laden economy only mining engineers and top-notch accountants get to be CEOs, and there aren't many around."

There are 339 companies on the JSE's main board, and fewer than 5% of them are led by blacks and/or women.

Several smaller businesses, especially technology firms, are headed by black people. Benjamin Mophatlane at Business Connexion, Sbu Shabalala of AdaptIT, GijimaAST's Jonas Bogoshi, Datacentrix's Ahmed Mahomed and Chris Jardine at Faritec all head up technology services firms.

Makalani has Keshan Pillay and Mohammed Kajee is at Sekunjalo.

Change advocates want the BEE Council to be given teeth to monitor the implementation of transformation and sanction non-compliance.

Businessman Sandile Zungu has suggested the BEE Council be given powers to operate in a manner similar to the Competition Commission.

Meanwhile, the era of self-assessment of companies on their BEE status ends next month. From August, verification agencies (VAs) will not be allowed to accept self assessments as evidence for BEE procurement spend.

Only VAs that are approved by the South African National Accreditation System will be allowed to issue verification certificates.

Empowerment verification involves a process whereby a company's BEE status is assessed, verified and validated for compliance with the BEE codes of good practice, and a score is duly awarded and presented in the form of a verification certificate. The process includes an analysis of the BEE procurement spend of a company.

Andile Tlhoaele, chairperson of the Association of BEE Verification Agencies, says the age of true empowerment measurement has finally arrived.

- City Press