Don't Gag Jimmy Manyi

This is Business in Africa! The raging debate about skills development in South African corporate sector is throwing BEE into more disarray than it already is. Those who understand the deeper meaning of the empowerment of black people should not be fazed. When commentators call you names for suggesting intensified efforts to improve the participation of those who make up over 90% of the population, you must be right on the money.

Jimmy Manyi, the fearless President of the Black Management Forum (BMF), has generated all kinds of headlines around employment equity and skills development over the past 12 months mainly because he is telling it like it is. Recently, he made waves with his remarks on behalf of the BMF about the appointment of former CEO of Mutual & Federal - Bruce Campbell – as executive chairman of Alexander Forbes. What is his objection?

Among other reasons advanced by Manyi are: that Alexander Forbes has a competent black CEO in Peter Moyo. Two, by appointing someone to the position of an executive chairman, the insurance group is creating an additional level of accountability on a day-to-day basis. He equates this to a lack of trust in the ability of Moyo. His interpretation is that the board of Alexander Forbes feels that Moyo needs someone to monitor him daily, rather than reporting to them on a quarterly basis or so.

Manyi also contends that the company has violated the King Code on Corporate Governance by appointing an executive (hands-on) chairman to the board, instead on a non-executive one.

BEE is about empowering black people. These are Indian, African and Coloured persons who were South African citizens on April 27th 1994 – when the new democratic constitution took effect. The empowerment can take the form of black share ownership, management control, which is where Moyo plays a role, employment equity, skills development, preferential procurement, enterprise development or socio-economic development.

What is the rationale of having black people managing companies as CEO, Finance Director, MD or Chief Operating Officer? The simple logic is that by having black representation on the most senior strategic level of decision making, the transformation of the company will be reflected in the decisions taken. These include where new branches of a company are to be opened, what capital expenditure will be necessary, how many people are to be employed, etc. Black directors, goes the thinking, will bring equity into the decisions made by the companies they head to help in fixing the legacy of apartheid in the economy.

In a large corporation such as Alexander Forbes, listed or unlisted, these decisions can involve massive amounts of money. They will often require the approval of the board of directors. The problem of seeking board approval for entrepreneurs and operationally active managers is that board members are not readily available. They tend to sit on many other boards, have full-time jobs elsewhere or run other businesses. This increases the time it takes to implement decisions taken, which could be costly to the bottomline. Conversely, it could save the shareholders from reckless decisions by executive management.

On the surface, therefore, an executive chairman should be helpful in protecting the interests of shareholders. But, from a distance, just about anything looks glossy.

The reality of the post-1994 South African business sector is that black people find themselves in (untenable) positions as CEO or Marketing Director or Human Resource Director without the requisite powers to decide or implement. This especially applies to the allocation of financial resources. As a result, black CEOs or MDs might be able to decide to make an appointment of a consultant or service provider, only to have to get another (white) colleague to sign the cheque or accept the quote.

This reality makes a lot of black directorships – executive and non-executive – meaningless in that they do not translate into better lives for more black people. For example, a black MD of a company born in an impoverished background might find it near impossible to allocate a corporate social responsibility budget to the building of a school in the township or village of their birth, while white colleagues continue to sponsor their already advantaged alma maters or soccer teams in wealthy suburbs. Just look at schools and varsities where white CEOs of South African companies studied, such as Wits – and compare them to the likes of Fort Hare – to validate this assertion. Of course, sometimes black people with the means to make a personal donation just get their priorities mixed up, but nonetheless the majority of them are unable to use their titles to make a difference because they simply do not have a ‘budget’ to implement their decisions.

So, whether or not Peter Moyo – a Chartered Accountant with above average intelligence and extensive industry experience – is capable of running Alexander Forbes without Bruce Campbell around is something we will not easily know. If the motive for appointing Campbell as executive chairman is to police Moyo remains to be seen. No board or CEO is going to admit to that, even if it were true.

However, the world of BEE and black executives is so predictable. If the reason for Campbell’s arrival at Alexander Forbes is a lack of confidence in Moyo, we will soon find out. If Moyo is made to feel like a ball boy, he will soon leave. He is not desperate, and he has his pride which will not allow him to stand the humiliation of being a token CEO.

In the meantime, be careful not to join the chorus against people like Jimmy Manyi. There are far too many examples of hollow black appointments to justify his skepticism.

Reactions such as this should be encouraging to the President of the