Enterprise development
Executive positions and board membership in large corporations
Black representation in executive positions and decision-making roles is a key objective of BEE. Employment equity also addresses racial representation in top management positions, but the sphere of large corporations warrants a specific analysis - especially considering the concentrated economic power at the twilight of apartheid and continuing into the democratic era. Transformation of the management and boards of JSE-listed companies reflect the balance of economic influence and power. Empowerdex (2012) tracked JSE-listed companies’ board composition, finding a continuous increase in black directors, from 15 in 1992 to 98 in 1997, 307 in 2003, and 1,046 in 2012.
One-off inquiries of publicly listed companies furnish more details, although different sampling limits the comparability of these snapshots. Wu, Khoza and Ngcobo (2002), investigating the top 115 JSE companies found that, out of 1,333 directorships, historically disadvantaged individuals hold 180 positions, or 13.5% of the total. This broad HDI category subsumes blacks, women and the disabled.21 In 2002, almost one decade after the democratic transition, just one CEO was an HDI, along with four executive chairmen, three COO/CFO, 22 executive directors, 15 non-executive chairmen, 135 non-executive directors. In sum, 83% of total directors occupied non-executive roles. One decade later, the predominance of non-executive black directors persisted. Empowerdex’s (2012) data compilations from all JSE companies found that, from 2006 to 2012, the number of black directorships increased from 485 to 1,046, and the share of nonexecutives among these directors stagnated, at 81% in 2006 and 83% in 2012.22 Head-hunting firm Jack Hammer’s data compilation of South Africa’s 40 largest companies found that blacks constituted 10-15% of CEO positions between 2012 to 2018, and about 21% of executive teams, mostly in corporate service
Affirmative action outcomes South Africa 207 roles such as human resources, marketing, legal and corporate affairs, with few still in strategic, operations or finance positions (Jack Hammer 2015; Jack Hammer 2018).
More recently, PwC (2019) reported on the racial composition within topmost and executive director positions of 365 JSE-listed companies, as of April 2019.23 Among CEOs, 10.2% are African, 1.7% Coloured, 2.2% Indian, 85.9% White, while the profile of CFOs is more disparate, with 4.6% African, 3.2% Coloured, 2.5% Indian, 89.7% White. Information on non-executive directorships were not disclosed in this report. However, blacks have considerably advanced into executive director positions, where 29.5% were African, 10.2% Coloured, 20.4% Indian, 40.0% White. High-profile cases of leadership change may be outlying cases, but nonetheless contribute to popular perceptions. In this context, the 2016 appointment of a white CEO at mobile telecommunications firm MTN, popularly upheld as an exemplar of BEE, induced polarizing reactions. Political and racialist rhetoric aside, constructive lessons can be derived from this outcome, which confirms the continual deep-seated challenge of BEE in the context of scarce talent and experience, but also the commendable willingness to be more pragmatic rather than take an intransigent stance on racial preference for the CEO position.
